10 years ago, gold was $400...Where will silver be 10 years from now?

I looked at a history chart recently in reference to gold and silver, and the one thing I can say is I don't think anyone ever seeing gold going so far above $1000 dollars as it did. There was never a history of it being that high as far as I have seen. So what happened? How did gold become such a high valued commodity?

I saw silver reach almost all time highs in 2011, what kept silver from becoming gold, better yet Palladium? If I am wrong please someone correct me, but isn't Palladium considered a industrial metal just like silver? If so why is silver so cheap in comparison? I think all these questions are valid, and I would love to hear how people view this in the big picture of things. So is silver the next palladium some day?

 

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Let's see, maybe the fact that silver is 1000 times more common than palladium, and is mined commonly and in huge quantities as a byproduct of copper and tin mining?

Each metal has its own supply/demand curves. To intermix the two willy nilly is silly.

 

That made me giggly.

 

Gold and silver really have very little effect on each other's pricing - they each have their own production means as cited above, not to mention their own unique uses. Historically the factor of silver to gold was 16:1 but it has varied rather dramatically since the free market and the factor is much much greater now.

If one could predict the price in say 10 years, they would have to be a clairvoyant, a mystic, or a complete bumbling fool. There are just too many variables at play - politics, economic, demand, and let's face it - whether there will even be a world in 10 years.

 

Actually, predicting the price of silver within a small range in the US ten years from now is relatively easy:

1 ounce of silver in the US will sell for 250-350 Yuan.

 

may I amend the question?
Today, PMs are valued in fiat... the change in the US was '71 for Au and '65 for Ag.
So what will the 'dollar' be in 10 years?
PMs seem to follow the true inflation rate. With ongoing QE and the math used to calculate said inflation along with the USDX, my guess would be Ag will be in 10 years what the down side of fiat will be. If the dollar stills exist as it does today.

 

Well, if you feel PM's seem to follow true inflation, then you would have to assume that Gold would go down (inflation adjusted) since it definitely overshot inflation in the bull run.

 

It makes sense, but it's hard to dictate what other people should assume. Perhaps he subscribes to the theory that PM's have been artificially suppressed in the past and they're just now catching up to inflation.

Of course it's just not that simple as there are a great many number of factors involved and inflation is just one of them.

 

Seriously? You do know that for most of US history the gold and silver in coins was worth less, sometimes sizably less, than the stated value on the coin. To those people who make this argument, would they be happy if a $100 bill contained a tenth of an ounce of silver so they can walk around and proclaim our money is no longer "fiat money"?

Even when the stars aligned and a $5 gold piece contained $5 in gold, and a silver dollar contained $1 worth of silver, they REAL USD has always been US debt, (since it pays interest). Same as today.

 

to answer all...

actually no, I do not think PMs will go down. There is added cost in PMs (mining, purity, minting, etc) Inflation is calculated into fiat that is not tangible. Look at the price of PMs since '65 and '71. Slowly but surely they have risen vs. the dollar, not gone down.
Take paper PMs out of the equation and I believe we would see a greater increase.
Look at PMs as a quasi commodity and the value of the dollar since it being changed to a FRN in 1913.

Yes, I do know that. When silver became more than the fixed price of the coin, what happened? Clad coinage under LBJ. Look at the copper cent and todays nickel. When FDR confiscated Au, what happened? Gold went from $20 to $35 and with the Nixon Shock, the gold was worth more than the fiat and countries went on a shopping spree. Money could not be spent as freely, with the 'gold standard' there where limitations when PMs where money. Once removed govt's have spent/borrowed at will.

 

Actually, if you read the history, the US raised the value of gold to be able to put more money in circulation. We were handicapped by the gold standard, and had to change the official price to be able to try to get out of the depression. The gold market itself did not raise the price like that.

 

Someone needs to post a link with that history, it would be a cool way to learn a bit more about how gold got to become what it is today.

 

Being handicapped by the Au standard I believe can be debated. I believe the standard kept spending in check. I also believe that the plan was to remove a tangible asset from the currency (my very humble opinion). It took 20 years to do so, from 1913 to 1933.
The US as a country has only been free of debt once.

As to get out of the depression, the American citizen was 'robbed' of $15. As you said, this wasn't the gold market but the gov't and bankers.

http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_inflation.html

Again, with the devaluing of the FRN and PMs being priced in it, how could it not increase?

 

I think silver will burst past its high of $50 an ounce within the next 3-4 years and may even hit the triple digits, and once the precious metal bubble pops or the monetary system is reset silver may fall back down drastically, to about where it is today. Who knows, in 10 years I may find this post and see how accurate or inaccurate I was!

 

Im a huge history buff, here are some links.

First about how 80 years ago FDR confiscated gold from americans and made it illegal to own it privately.

http://lonelyconservative.com/2013/04/80-years-ago-fdr-ordered-the-confiscation-of-americans-gold/

Then after the govt. has the gold, they raise the prices, effectively robbing the american public of its precious metal wealth and paving the way for fiat (paper not backed by any asset or commodity) currency.

http://caps.fool.com/Blogs/the-great-depression-the-gold/49586

and

http://www.moonlightmint.com/bailout.htm


and the history of the federal reserve

 

http://www.harley.com/money/the-end-of-the-gold-standard.html

 

May I suggest we walk a narrow path staying on the original question in the first post. This post turned political as expected and to prevent problems for members who comment, lets stop. Thanks Jim

 

just pointing people to information, not being political sorry.

 

I think we are on the long down hill slide with gold settling to around $800.00 and silver around $14.00. PM responds to economic uncertainty as in the recent housing and banking crisis that preceded the spike in PM. If there is another crisis, then there will be another spike, but these things occur about every 3 to 4 decades.

 

Silver in 10 years? $26 in constant 2013 dollars.

Edit: I just noticed you had more questions in your post. Gold is much rarer than silver. Palladium is a platinum group metal, and is therefore rare, as well.