manipulating precious metals without owning actual precious metals

That's true enough. Silver is priced too high because it was once used as money.

That is for the market to decide.

At its simplest, the market is driven by supply and demand. But supply is not just the cost to produce and the amount produced, and demand is not only determined by what industry will pay and how much it consumes. Risk is also baked in to the price. Market participants are trading risk.

As far as I know there hasn't been a silver shortage in at least 20 years and miners are still mining. I don't think the price alone points to manipulation.

 

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^So if Market participants are trading risk, but there are no shortages of silver and haven't been for 20+ years, then what exactly is the risk they are trading?

 

AN UPDATE FROM A WALL STREET PERSPECTIVE..........BY QSILVER

Some of my statement may repeat each wekk, but i am simply passing on a view point from the tradig perspective to my fellow coin collectors.

Last week, Gold glosed 1567, this week 1604, so a decent 3 percent rally
Last week, Silver closed 26.67 this week 27.58 so about 4 percent there
Platinum tacked on 20 bucks...................still a mind boggling 152 discount to Gold
Copper went from 3.30 a pound to 3.50, 7.5 % up
SP 500 up 3 percent
Crude oil WTI up 4.65 aroundd 4 percent as well.....................still trading 15% discount to Brent and most other grades all over the world
The EURO which is the "fear" trade, was up less than 1 cent .........

The Futeres and ETF markets especially for the metals, and generally speaking for most other commodities, do rule the price as they are the fastest moving, and the algo trading machines can get in anout quick. Thye do not look at fundametals or manipulation.

On the subject of manipulation, I am of the school that the metals do have higher powere selling them in our markets (COMEX). July Silver which was lead went into delivery Thursday night, so for those of you who want it, put 137,500 in a futures account and you can take 5000 oz off the market.

The reality in trading, is most traders do not want the physical metlas, as the front future almost always trades discount to tht next month......Currently Gold is about 1.20 per month and Silver .03 per month.............So last dayy all the funds sell out there July, then re enter into this case sep as the margin is back down to 15,000, which for the same 137,000 it would cost to buy the 5000 oz, you can now control 45,000 oz. It the same in Corn, Crude, Bonds, EURO, etc, etc..................

Options put volatility surged on Thursday as many short term traders tried to bet silver was going to break the 26 handle and Gold the 1550 handle, onece again they were wrong.

I stated last week that my belief was the lows for the year were in.

Gold held its low and closed up on the week,

Silver made a low for the year, broke last weeks lows by about 4o cents then closed up on the week major bull reversal

What came out of the 2 day EURO SUMMITT???
NO CONCRETE NUMBERS, but all the algos were way too long the dollar and bond, and short everything else so most funds compounded there horrible returns for Q2 2012, on the last day of the quarter.

WHAT DID COME OUT OF THE EURO SUMMITT???????
they are instating a PERMANENT BAILOUT FUND..................REPEAT..................PERMANENT BAILOUT FUND................

the markets are far from being free and clear and Europe will remain a problem for at least 2 more years to come

The ways out for Europe................Multiple defaults, disorderly dissolving of the EURO, will basically make 2008 look like a joke........
option 2 which is my belief.............The IMF and ECB are going to have to put a backstop number behind there words.................Street whisper numbers are beteen 2.5 Trillion and 11 Trillion EUROS..........

These are unfathomable numbers..........it seems rediculous, but thats how much toxic debt is out there

Conclusion: I am sticking with the theory that all futures markets have been and will be dominated by machines who are purely out for money, they do not want physical metal
The Low for Gold is definetely behind us............Silver's reversal combined with the huge panic put buys late Thursday sets up for a nice trend reversal pattern, major near by resistance areas are 28ish and 29.75..........if Silver can, and I believe it can, clear these numbers, being back above thirty will attract more buyers and short covering funds who sold in the 26 dollar handle.

As steted earlier I am a Wall Streeter by day, but also collect coins and believe Silver and Gold are the only true currencies, so the timing was pretty good in Gold, slightyly off in Silver, but really whats 1% in Silver now adays...........I hope this info is useful and helpful to some of you.............I have received some nice messages, so I will continue to put out an update when I can......

Everyone have a Great 4th of July..............COMEX GLOBEX is open July 3rd nite normal time early close rought 1:00 pm eastern on 4th of July..............PM's are still being traded on every other exchange, normal hours.......

............One last note.............Last July 3rd Gold was nudgin lower at around 1485.............it rallied 13 dollars on 4th of July and broke thru 1500 on European fears.................. Traders continued to get Burned in the Dollar, Bonds, the yen, Swissie, all the so called SAFE HAVENS..............its been a nasty few months fro precious metals longs, with open interest in Silver futures on COMEX at the lowest since 2004.............that was a major low remember........................Gold and Silver will have ups and downs, but when its all said and done they were money before all of us were here and will be long after................

Closing stetement.............In honor of the fourth of July, look back at the Constitution and Declaration of Independence.............."ALL MONEY SHALL BE BACKED BY GRAINS OF GOLD AND SILVER..............."

SINCERELY,
QSILVER007

 

I enjoy this discussion even though I find it somewhat hard to follow so I don't have much to add. It seems to me that with gold prices it's interesting to pay attention to opinions, but I believe the fix is in and have accepted that long ago. When I read the articles on Coininfo and kitco, I pity the writers that have to come up with new stories and explanations daily and I pretty much don't believe any of it.

Instead I get up early on my day off and head out to the most serene place I can imagine and dig up a little more. When Gold drops a few bucks I hit it again and cover my loses that way I guess. If it goes up, then great! I have the ability to do that and I think myself pretty lucky I live in a place where I have that option. Just keeping it simple and staying "metal minded".


This pan represents about 7 hours of sleucing and melted into 10 grams net. Almost a 1/3 oz! It's a forgotten art of sorts and most won't go out and get all dirty and sweaty. But it is out there and I enjoy the productive exercise.

Matt

 

duplicate

 

Very impressive, and best of luck. On a related vein, here's an excerpt from the Internet: "...In the early portion of the 20th century, chemists hoped they could develop a process to recover pure gold from large quantities of seawater, making themselves and their countries rich. German chemist Fritz Haber, famous co-inventor of the Haber-Bosch process, spent a portion of his career attempting to extract gold from the sea to pay for Germany’s post-WWI debt.

Seawater contains, on average, 0.1 to 2 mg/ton, of gold, depending on location." A ton represents about 225 to 250 gallons, depending on salinity.

I wonder if it exists as tiny micron-sized grains of gold, or auric chloride, or what. (I am not a chemist LOL).

 

Markets are emotional creatures; always have been and perhaps always will be. If prices were based on cold calculation, they probably wouldn't vary as much. But this is not the case, so they will probably continue to fluctuate unless prevented by regulation. I know some people read manipulation into fluctuations. I don't.

 

I agree. If demand goes up, then higher cost mines and recovery operations will go into production to meet the demand, but only at higher prices.

 

Yes, they say the oceans have enough gold to give everyone on earth I believe 8 ounces of gold. However, they have not yet devised a cost effective way to extract it. I do believe, though, that in the vertical wind power plants in Australia and Israel, which are fed with ocean water that evaoporates, there is enough concentration in the remaining salt that they recover some gold from there when they clean the solids out.

That really would be a major breakthrough, if someone designed a system to only extract gold from open ocean water.

 

Hogwash. This is what people say who don't understand markets. People who trade on emotions get burnt. Successful investors use those who use facts, knowledge of rules and regulations, and actually know what exchange something is traded on to reach their goals. This is why there are markets.

Not saying emotional trading doesn't occur, but the markets will quickly end the investing career of those trade on emotions and look at chicken entrails for guidance.

Good business does not depend on emotional states.

 

I simply would strongly disagree. Anyone who ignores human emotions and believes markets always react only to data I believe is setting themselves up for failure. There is a reason there is an old saying in the market, "markets can be wrong longer than you can remain liquid". This is touching on the extremely common phenomenon of emotions tainting pricing assumptions.

If you truly believe this Fatima, do you believe $300 was the CORRECT price for gold back in 2000? To me, I simply believe the market was bearish on any non-yielding assets, and were pricing them low due to this emotional outlook.

 

You are a quite a bit off on this.

Using the conversion given there is enough gold in ocean water to give every person on the earth 3149 pounds or 1.58 US tons of gold. I double checked this at Wolfram|Alpha which gave 3180 pound of gold for everyone on the earth. As an engineer, I knew that 8 ounces would be way way off. It should also be noted, that most of the water on the earth is not in the ocean. It's in the mantle.

This is an example of where checking facts rather than going on rumors and assumptions could lead to the wrong conclusions or actions. Maybe it's not really that important for a web forum, but it's certainly relevant when one is investing one's money in a market.

 

Folks like Ben Graham and Warren Buffett have written extensively on the emotional nature of the markets. If you understood markets as well as you think you do, you would be aware of this. I know there are some others, usually with an academic background, who have postulated that markets are rational and efficient at all times, and you can choose to believe them over the folks who actually make money in the markets. Everyone can pick their own poison. I agree that those who use facts and knowledge do better in the markets, but that is only because there are huge numbers of investors who don't. And now the majority of trading is done by black box programs that operate on technical analysis and relationships to derivatives where no human intervention or attempt to value companies occurs at all. These programs at times move the markets in irrational ways that a value investor can take advantage of. There is a lot going on in the markets today and you should refresh your knowledge before criticizing.

 

http://oceanservice.noaa.gov/facts/gold.html

"almost 20 million tons of gold in the ocean". Gee Fatima, 20 million tons divided by, what? 5 billion people? Sure doesn't sound like there is enough for 1.58 tons per person on earth.

I was going by memory from a recent article, I was wrong it is 9 pounds per person. Maybe you should make sure your owns facts are in order, or at least not off by a factor off 100, before making fun of others posts. Calling me out that I was wrong and its 9 pounds and not 8 ounces is fine, I have no problem being corrected and will admit when I am wrong, (unlike some others here).

Btw Fatima, when are you ever going to admit the lunacy and fallacy of your post #13 here? Are you EVER going to admit you were obviously wrong?

P.S. Btw, "as an engineer", is that a personal anecdote???

 

Of course you would and that is because you completely got wrong what I said. Not once did I say to ignore the emotions of people. They are often the best sign of investments to stay away from. The recent exuberance leading up to the IPO of FaceBook is a very stunning example. I said that smart investors don't use these emotions themselves.

Any investment, where the only argument for that investment is an emotional one, is a very dangerous one. Emotional arguments for investing are almost always for investments that fail. Quite the contrary to what you believe I said, emotions are very important to consider in investing just as long as you don't get caught up in it. There is absolutely no substitute for knowledge, understanding of rules and regulations, and fundamentals. As I said above in the long run, the markets, when left to themselves, will flush out the ones who don't trade with this understanding.

Since you mentioned old sayings then this one comes to mind.

"Fools rush in where wise men hesitate to go."

It's even more important in these days where people "react" rather than critically think. Not reading my post and understanding it, and instead assuming and reacting with the wrong conclusion is an example of this.

 

Umm, earth's current population is estimated at 7.024 billion, not 5 billion.

 

Now you are giving an argument on what you believe other's have said. Either you understand it well enough yourself and can speak about it here or your don't. We are here in a topic discussing the manipulating PMs prices. Answers such as "markets just work that way" or Warrren Buffet says whatever, doesn't even come close to addressing the real points that have been made in this topic. It's what is done when there isn't an argument to the contrary but the party won't admit it.

If you want to look to these people for guidance for whatever it is you do, I have no issue with this. I hope it works out for you. But it really has no bearing on what I've said.

 

Well Cloud asserted markets are emotional creatures, and you replied "Hogwash. This is what people say who don't understand markets."

Read more: http://www.cointalk.com/t208467-10/#ixzz1zTs35zcq

If you meant something else, like this latest post, then I agree with you. Markets are extremely emotional, which explains large ups and down, and a smart investor will use this knowledge to take advantage of that fact.

Having said this, why are you now arguing with Cloud about his position on markets? You just admit markets are emotional, and that was his explanation of the ups and down, so what exactly are you arguing again? I cannot keep up.

 

You haven't provided evidence to back up your statement that it is hogwash to believe markets are emotional. So we have a choice here -- to believe Warren Buffett and Benjamin Graham, or fatima's claim that their theories are hogwash.

Regarding the manipulation of PM prices, I'm still waiting for evidence to back up your claim. I know you have assertions by goldbugs and newsletter writers, but none of those assertions are supported by the action of the markets. Gold went up 11 years in a row. Is that reasonable for a market where powerful forces behind the scenes are working to keep prices low? I think not. I trust the action of the market and the fundamentals more than the claims of a few writers with different opinions.

 

First, I didn't respond by saying I'm an engineer so "trust me" as you did when you stated that you have had experience with futures the rest of us haven't. Maybe you still don't understand what this means.

Second, I checked your webpage and I believe they are simply wrong. Even the data they give doesn't match the results they give when calculated. This is why I said above I checked my calculations, based on the information given against another site and they matched up. I'm not going to argue the data on web links as it isn't relevant to the point made. That point being that you said 8 ounces/person which is a figure that is absolutely wrong and even the link you gave proves that by a wide margin.

If this were really important to investing (and I also said in my post that it wasn't that important for a web forum)the facts should certainly be checked against several sources.