Discussion in 'Bullion Investing' started by myownprivy, Aug 14, 2019.
Do you honestly believe, though, that the magazines were not biased?
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Ok...I'll take a shot. The short answer is that these are two different commodities whose supply/demand dynamics are quite different. Silver is an industrial metal produced as a secondary metal in just about every type of mine. Gold has some industrial uses, but is mostly used for Jewelry and Coins as a liquid store of wealth.
Supply/Demand can fundamentally alter the relationship of the two commodities. During strong economic times, Silver may rise in value relative to Gold due to industrial demand while money flows out of Gold and into Equities. During weak economic times, Silver may drop (weak demand), while Gold may rise as a hedge against lower interest rates and a weaker Dollar.
In either case, the ratio between Gold and Silver changes from one extreme to the other...but (so far) in a range between 45 and 85 (a few spikes higher and lower).
Given that the value of the Dollar is a constant at any moment in time, the price relationship between Gold and Silver should accurately measure the relative supply/demand for the two commodities.
However, with that said, you also have speculators who drive prices based in irrational fear/greed. Although gold and silver are different, they both maintain their unique relationship to fiat currencies...in this case, the U.S. Dollar.
Speculation plays a much larger role in the price of PMs than industrial supply/demand. Generally, when one PM rises or falls an inordinate amount relative to the other, that is the result of speculation and an opportunity to make some money when the GSR reaches extremes.
I don't trade the GSR myself, but was reading where some folks in this situation are buying out-of-the-money Gold puts and Silver calls. This strategy makes money when the GSR drops...regardless of whether there is a rise in Silver or a drop in Gold.
I'm not endorsing any GSR strategy...just trying to answer the question.
As far as 2019 is concerned, Central Banks around the world are having a race to see who can devalue their currency the quickest...which puts upward pressure on PMs (relative to the denominated currency).
I believe that Silver speculators are still licking their wounds after President Obama raised margin requirements 11 times in three (3) weeks in 2011. That effectively popped the Silver bubble. I think memories of 2011, plus increasing supply/demand for Silver, has speculators putting their money into Gold instead of Silver.
What could change? ...an improving economy that pushes the demand for silver higher. It takes time to bring low margin mines back online, so silver prices (buoyed by speculation) could come back inline with Gold...or even exceed.
Is that likely? Probably not as long as a global recession persists. However, a significant resolution to the current trade wars will be very bullish for Silver. That's when I'll take a look at Silver. Currently, Silver is at (or near) production costs. It could drop lower than production, but that will just take mines out of production.
Long term, current prices for Silver are attractive (imo). I made many posts when Silver was $35/Oz to say that Silver shouldn't be accumulated again until it drops below 18/Oz. Well...here we are!
Ok...what's my grade?
Things were definitely different before the internet. We had some big shade oak trees a ways out of town where we would meet on Saturday mornings to work on our cars, listen to music, and drink beer. Good times!
Saturday mornings were for sleeping! (After I got old enough not to clamor for Saturday morning TV cartoons...)
Now, Saturday night? THAT was TELESCOPE time! No school the next day, so I could stay up as long as I needed to. I sure do miss dark skies.
What Yakpoo said and very well said, I might add.
and so it goes,
Only a complete fool would accept a challenge to disprove that the Numismatic publications don't try/hire the best knowledgeable individuals writing for their magazines, intending to provide an excellent resource for the subject indicated.
I believe you'll find that social media doesn't necessarily hire the same types, but maybe those capable of being able to redirecting individuals for corporate profit, misleading by presenting nebulous alternatives to that desired in stated subject request.
Canceling two of the three negatives, then paraphrasing, I get:
"You'd be a fool to accept a challenge to prove that numismatic publications hire the best and most knowledgeable individuals, so they can be a good resource."
Simplifying further, I get:
"Nobody can prove that coin magazines hire the most knowledgeable people."
I'm guessing that you meant the opposite...?
I would eat my PC (keyboard and all) for a chance to have World Coin News return to it's peak advertising period some 25 years ago. Just the $60 and under ads took up 7 or 8 pages of copy many months, and had some truly great deals to be had. Didn't take long to figure out which dealers knew how to grade back then and which ones didn't. Almost everything raw, sometimes Superb GEM coins sent out at UNC prices...,,.. awe geez don't get me started(!)
- Edited -
I wish silver would go back up to $25 or $30.....I sold some of mine when it was last $30 & $40, but should've sold a lot more.
@WoodyWW nice infusion of politics in CT.
Gold's low for the year was $1167. Today, August 28, it is $1540. It is up over 24%
Silver's low for the year was $13.86. Today, August 28, it is $18.38. It is up over 24%
The big news is that now gold and silver have performed equally well. Both are up slightly over 24%
Hadn't paid any attention to platinum this week. Yep, that was a quite a move today and has to make you wonder how much of it was speculative. Anyone who watched what platinum did in the summer/fall of 2008 has to know it doesn't behave much like a precious metal. The swan dive into oblivion in 2008 was unlike anything I've ever seen before. Was as if the 737-MAX stall control software had engaged plunging platinum prices into the ground at full throttle.
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