What are you holding out for with silver?

I have my own ideas where I believe the "floor" of silver to be at the moment and I want to see how in line it is with other people who watch the silver market.

1) At what price would you consider selling your silver if it were to jump again?

2) At what price would you start buying significant amounts of silver again?

3) Where do you think the "floor" of silver is at the moment? By "floor" I mean the price at which where when the price is dropping there will be a certain point where more people will buy once again than sell and rebound the price.

These are my thoughts on those questions

1) Personally I would consider selling if silver hit $35 to 40 again, but this would depend heavily on whether it was a spike like the Jan 2011 spike or a gradual increase. If silver were to find its true value in line with the gold ratio with a gradual increase I would hold on it it much longer.

2) As to what price I would buy significant amounts again... I'm buy a little bit right now when I see it really cheap here and there, but no really significant quantity. I think if it were to drop below $18-20 I would start buying again.

3) As to where I think the floor is in the market at this point I think if it does drop below $20 we'll see an uptick of about 12-15% in direct response to it hitting that number over the short term. I don't think we'll see cheap silver for a very long time again I think it's found a new level like the gas price since the last spike. I really personally don't see it dropping below $15 unless we see some drastic recovery in the US economy.

Those are my thoughts, how do you feel about silver right now?

 

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I think you pretty well nailed it . I'm syill buying small quantities at or near melt .

 

Lol yeah most of my purchases in silver lately are a result of my inability to pass up a good Franklin half or Morgan dollar at a good price . I wish we were still spending Morgans as currency =/.

 

1) I'm not selling anytime soon, unless I seriously need the cash. I might be enticed around $50/ounce otherwise to flip some and see if it goes back down the way it did the past couple years.
2) I'm buying a little here and there now as close to spot for bullion, and buying some graded ASE's just cause I want to. If it were to drop under $20, I'd buy a couple hundred more ounces, if it hit under $10 I'd probably buy at least 500 ounces to start, and keep adding as much as I could afford.

I'm looking at PMs as yet another investment to round out my holdings. If it meets inflation, I think I'm good with that as I trust it more than US bonds. Plus, it's shiny and cool looking, and I get to hold it physically. If it doesn't keep pace with inflation, well, at least it's still shiny and cool looking...

 

I'd say that floor concept is determined on so many other factors it's impossible to say. Why did it fall? What are the other major factors in the economy at that time? For me, I am always thinking about selling a little and buying a little, just because (a) I have limited cash to spend and (b) I keep learning and enjoying other things! So you can likely discern I play the semi-numi game :thumb:

 

At whatever price allows me to pay off my mortgage.

How do you know I'm not now?

10% below whatever the majority of people think.

It's pretty and shiny and I like it.

 

I don't know that you aren't buying large amounts now, but I'd have to say if people are it's a really bad idea as an investment in my opinion. The price is going down slowly at the moment and the media loves to crap on metals every chance they get unless they are skyrocketing. With the price on the decline it's a pretty safe bet to say that silver isn't going to make a jump like Jan 2011 until it at least shows signs of slightly rebounding, unless a vast quantity of silver were destroyed tomorrow which is also pretty unlikely. When its consistently going down with no jump immediately imminent why not wait and see how low its going to bottom out and then make your big purchase when it at least starts to rebound a little bit so you can be as sure as possible it won't drop another 20 or 30% 2 months later and you could have bought that much more? The only time I could think otherwise would be investing on the numismatic value of the coin alone regardless of the metal price at which point the metal price is sort of irrelevant. Of course and MS-65 1889CC Morgan really isn't going to be effected by the silver price that much. It's not as if silver is hard to find right now and its probably not going to disappear within the next few weeks. I am 100% positive I could get 1000oz inside of a day or two if I wanted at a good price within 100 miles of my house. Why not wait and see how low it goes and get as much as possible?

 

I buy what I buy for the reasons I buy it, and sell it when doing so meets my goals.

In the mean time, I'll keep snarking forum threads that propose to offer precious metal "wisdom".

 

A very small percent of my portfolio is in PM’s (5% to 10%) and I’m holding it in case of times much worse than these. It’s physical PM’s, as I wouldn’t trust those thieves on Wall Street to deliver anything other than what we got in 2008, especially in an all out worst case scenario. Remember, more people lose than gain trying to time the market.

 

if your only logic for it being a bad investment is that the price is going down is ridiculous.

Also how do you know it isn't already bottomed out at $26?

The reason to not wait is that you think its already bottomed. If you think silver is a good investment long term then it won't matter a huge amount down the line if you bought at $24,$26 $28. Obviously you will be better off if you bought on the low end, but if you end up not buying at all and it is at a $100 five years from now then you will regret it. Ofc that is all irrelevant if you think its a bad investment, you shouldn't be buying it at all then...

 

If silver hits a new all time high, I will probably start selling. I will not buy bullion if it goes down ALMOST regardless of price because when this bull market ends, it may be a very long time before the next one. But I will console myself with the fact that if that happens, I'll be able to buy some numismatic coins at lower prices.

I consider the floor to be about $20 for silver since that is reasonably close to the average total cost of production. It may go lower, but longer term it can't stay below the cost of production.

 

^ Not to nitpick or anything but never heard $20 for cost to mine Silver, from what i have read silver costs around $6-17/oz to mine (depending on who you want to believe Silver institute vs bullish Silver sites like Silverseek).

 

I don't use the estimates I read because they usually refer to cash costs. I prefer to do my own calculations. If you take the financial statements of a few silver mining companies and divide the total costs and expenses on the income statement by the number of ounces produced, you will get a higher number. I realize that the management of most mining companies are either incompetent or deceptive, but economically a company has to recover its total cost to stay in business.

 

I'll betcha the swinging cost of oil has something to do with that.

 

I understand anyway the 17 dollar figure i got from the article was done by Silverseek was when Oil was near its highs. As for Silver IMO we will not see 30-35 in Short term due to the following:

1) Weak industrial demand for Silver due to potential global economic slow down.
2) Strong dollar.
3) Investors moving back to the equities due to strong rally in indices.

Couple months down road If mines' started cutting back their output there could be bump but so far i haven't heard anything (where as platinum output is being limited)

 

I'll be making a large purchase around 25 and would not sell off anymore than half of my bullion at 60.

 

Well I am kind of stuck. I use my PM as a contra asset, so it would have to be very strong for me to wish to do without this asset class. If it got above $50 for a while and I could get a decent price for my junk silver relative to the market price, I would have to consider it.

For buying, if it went below $20 I would have to consider buying a few more hundred in face value junk silver if I got a good multiple on it. Problem is, when it first drops down everyone wants a premium for PM believing it will go back up, so I am not sure even if it went below $20 I could buy at that level, unless it went below $20 for a protracted period.

As it is, sometimes I buy a junk lot of silver if I like the coins, but that is more a hobby expense anyway.

 

1) This is a difficult question, because the higher the price goes the more it will be in demand as people take notice. I do not plan on selling any of my silver for less than $70/oz since the next fibonacci level after breaking $50 is $75, and my first sizeable sell target is $110 (due to $114 projection below). Though I will only sell as much as I need to put money into other things. I don't plan on holding much funny money.

The central banks have no choice but to monetize the debt. We are on a slow motion hyperinflationary path. The only way to avoid that is to cut spending in half. Interest rates cannot be raised in an economy this weak where banks only survive by making loans at higher interest rates than they borrow from, and every now and then they require a bailout anyway. I'll be a buyer of silver at $500/oz as long as I have spare cash and nothing else I need to spend it on.

2) I never stopped buying, whether $10 or $50. It's all cheap if you ask me. There's less than half a year's worth of mining supply available as refined silver on the market today, and demand exceeds supply every single year. It is only met by 'scrap silver' as in people selling their coins and jewelry for smelting. You'd be hard pressed to find a commodity selling for 45% less than it did in 1980, but silver does even though it is projected to become the first metal to hit a shortage.

3) $26 was the floor IMO. We could break down below that if deflation takes hold, but I highly doubt there will be much available at lower prices. I would not be surprised to see a touch down to the 2008 high of $21 since that would be consistent with this bull market.

In 2004 the high was $9. In 2008 the high was $21, a 133% gain from $9, and then dropped down to $9 again. In 2011 the high was $49.85 which was a 133% gain from $21. For this trend to continue silver would drop back to $21 again before reaching $114, but any drop below $25 (paper price) will bring out (physical) buyers everywhere so good luck. If the paper price gets too low and nobody is selling then the physical market will separate and then spot price will become irrelevant anyway.

IMO a return to $21 will necessitate such a substantial rise by drying up the supply, so the bankers don't want that. They like $27 just fine. It's high enough to keep the supply in check but low enough to convince people it's not worth buying. The CME lowered margin requirements across the board this week after all. In the absence of QE3 or LTRO3 they are very concerned about deflation, but the central banks will eventually be forced to inflate because if they don't then the too big to fail banks balance sheets will deteriorate as asset prices plunge, and their insolvency will be their undoing without additional stimulus in that case. If that happens, the derivatives market implodes, and the entire global financial system goes under. They aren't going to let that happen.

 

Not arguing with you bug, but wouldn't the 1980 price be thrown out in most logical growth charts due to market manipulation?

 

I agree, I also believe the 1980 price is an outlier that needs to be ignored in any rational analysis.

I have said it before, graph silver per ounce next to oil per gallon and see the relationship. Its not perfect, but explains things better than anything else anyone has been able to show me.