How low will silver and gold go?

Discussion in 'Bullion Investing' started by SCFY, Dec 3, 2013.

  1. mikem2000

    mikem2000 Lost Cause

    No, prices for PM are NOT low. I am not saying they are high, but certainly not low. What valuation method are you using to make that claim?
     
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  3. chicken_little

    chicken_little Active Member

    I've seen both the bulls and the bears try to throw out valuation methods, and both camps will only look at the data they want to look at.
    physical demand is what I mainly look at. China is buying up the metals like its going extinct, and no one is talking about it.

    In the end, you have to decide if your a bull or a bear on the metals. If your a bear, you are going to think prices are too expensive. If your a long term bull, like me, you will think prices are low here.
    I expect it to be 2-3 years before we get back to the old highs in the metals, but we will get there.
     
  4. mikem2000

    mikem2000 Lost Cause


    If demand is what you look at, I am not seeing you logic.

    Here is a link showing silver demand. It looks flat over 3 years and only up marginally over 10. Demand isn't even close to being high enough to justify upward pressure.

    https://www.silverinstitute.org/site/supply-demand/
     
  5. medoraman

    medoraman Supporter! Supporter

    Besides, what about supply? Demand is irrelevant without discussing supply. The Journal had a great article a couple of eeeks ago how all mining firms have, by technology, greatly expanded recoverable metals. Heck, there are mining firms now mining their old tailings because new technology now allows them to recover what was previously unrecoverable. Net silver industrial demand for silver has been much lower than new supply for quite a while now. Its basically been speculators and coin collectors increasing demand. What will happen if ASE and other speculative demand dries up? There are hundreds upon hundreds of millions of ounces of pure silver that can be dumped at any moment. Don't think it can happen? Then you weren't around the pm market in the early 80's...........
     
  6. chicken_little

    chicken_little Active Member

    Thank you, I'm enjoying this discussion.
    Your right according to that data, but it doesn't show the 2013 data, which is off the charts. China has purchased something like 600-700 more tons this year than they did last year (I'm pulling that # off the top of my head so I'm probly off some). And I can't even find the data for silver, but I know silver demand is through the roof right now. Entire vaults in London have been drained of metals, and its all going to China. I'm talking 1,000 tons of gold never to be seen again (China does not allow exportation of PM's)
    Here's a good interview about the current demand from China:
    http://www.bloomberg.com/video/what-s-happening-to-all-the-gold-d33u1c23SDqA0p0e~9_INw.html

    This type of raw demand is what pushes markets. The only factor keeping the lid on the metals right now is selling here in the US and Europe. People are selling the metals and buying stocks, as is the current trade. But what happens when the selling stops? I doubt the demand will suddenly stop at the same time.
     
  7. desertgem

    desertgem Senior Errer Collecktor

    Since PMs are a commodity, anyone ( me or you, if we had the money) can buy contracts on the open market. Since China would have to pay the going contract price like anyone else, and someone had to sell the PM to them at the going price. If there was any great demand of the PM at those prices, other countries ( maybe also the US for their bullion coin program) or monetary funds , would be buying also and the ask price would go up. This doesn't seem to be the case, so I wouldn't expect the buying or selling by any major company or country to change the financial path of PM. The question one needs to explore is why are some countries buying PM and others aren't. Its not because they don't trust paper, it is more to manipulate paper assets, both their own and other countries. If the stock market, the dollar and all other paper financials were so shakey, why doesn't other countries pull out? Mainly, IMO, our economy is better than theirs.
     
  8. Revi

    Revi Mildly numismatic

    The dollar may have gotten a little stronger on the news that they downgraded the Euro. I'm not sure why silver is stuck around $20, but it's okay with me, as I have found some to buy lately, and it doesn't seem as pricey as it did when it was 22 x face value. Now I can find some at around 15 x face and it seems like a bargain. We could drop a little lower, but it seems like almost everyone has decided that it's a bad time to buy, and that's when I think it's time to buy again.
     
  9. medoraman

    medoraman Supporter! Supporter

    The time to buy will be when everyone stops talking about it. In the eighties there were a few hardcore believers in pm for a while. Just like in other markets, only when the last weak hand sells can there be a permanent movement up. I believe a this point there are still too many people in pm only because of the last few years movement. When the last of these either sell or stop buying, then the market wilk be positioned for upward movement imho. I predict quite a few years of sideways movement, with some ups and down, before any serious rise again. I am all for it, at these levels I am ok buying my little pretties.
     
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