The behavior of PM prices is confusing

Discussion in 'Bullion Investing' started by myownprivy, Sep 19, 2018.

  1. myownprivy

    myownprivy Active Member

    The market keeps climbing, in part, according to CNBC, because "Dow surges about 185 points as latest US-China trade barbs are not as bad as feared"

    And Reuters reports that yet another interest rate hike is likely before the end of the year "Traders take Fed's cues, pile on bets on U.S. rate hikes"

    The effect is the market keeps rising.

    Yet, today gold is up $6 and silver is up nearly 20 cents. If traditional investments in the market are doing so well and expected to do even better, why on earth are PM prices rising steadily all week?
     
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  3. tommyc03

    tommyc03 Senior Member

    The markets have been crazy lately. There's so much going on it's hard to keep up with. Brazil and Argentina are having a heck of a time financially. India has too much debt in dollars. Tons of money have been laid on the S&P. Trade imbalances. Sanctions. So much more, I can't figure it all out. Would go nuts trying to.
     
  4. longnine009

    longnine009 Most Exalted Excellency

    Who said markets are supposed to make sense? If markets made sense it would be easy. If it was easy everyone could do it. If everyone could do it there would be no need for geniuses telling everyone how to spend their money.
     
  5. longnine009

    longnine009 Most Exalted Excellency

    That is not a report, its conjecture; just as silver's going to the moon is conjecture. And we would never hear the end of it (conjecture) if the conjecture came from a silver seller or stacker.
     
    Last edited: Sep 19, 2018
  6. WLH22

    WLH22 Well-Known Member

    The value of the dollar also comes into play with gold (and oil). In the last few days the dollar has moved lower. Gold is priced in dollars. This causes the price to increase. It has moved from 95 to as low as 94.3 in the last few days. That is a move of almost .70%. If you round gold to $1200 that would mean a move of almost $8.50 just on the dollars fall.
     
  7. longnine009

    longnine009 Most Exalted Excellency

    Can CNBC site the American and Chinese officials who sat down shaking hands, nodding, smiling and declaring all is un-barbed? Or is someone at CNBC doing Vulcan mind melds?
     
  8. Clawcoins

    Clawcoins Well-Known Member

    What's confusing about it.
    Technically, it's just developing a base.

    At that point, then it can continue to trend down like it has been for 3 months,
    or, it could start trending up.

    of course, spot prices tend to jump around wildly from day to day so you have to look at the trending average over periods of time to speculate on movement.

    If you create algorythms based on specific economic impact items then it's just another day to see what happens based upon those input factors related to spot.
     
    Randy Abercrombie likes this.
  9. medoraman

    medoraman Supporter! Supporter

    Just the same as a bear predicting all pm will soon become valueless would probably be heckled. Reason is, 99.99 percent of time markets are rational to an extent, and pm investing is replete with hucksters promising huge returns to suckers. Every single year for the last 40 someone has predicted the market is going to the moon, (and buy from me to make me rich).

    I respect you Longnine. You are a bull still here when 90% plus of them are now gone from here. Your points are valid, and you may very well be right. I still consider myself in the middle, though at times you have considered me a bear. Just in the last month I have bought a couple of hundred ounces of silver and a few double eagles. Now is the time to accumulate when no one wants it, prices are down, and premiums reasonable.

    Btw OP, so many things going on it is confusing about daily movements. Major things to remember is price of USD versus other currencies, mines being opened or closed, and cost of production. Then layer millions of bits of information coming onto the market every day and you get a PM price.
     
  10. chucklenut

    chucklenut New Member

    traditionally commodities market will behave conversely compared to futures/securities market

    when stocks go up, silver/gold go down. and vice-versa. this isn't always true but is a decent trend

    also, bear in mind that more silver/gold is traded than physically exists (ETFs are scary because you are really trusting the seller has what he says he has; I mean, who audits these things anyway?)

    to make thins more confusing is the petrodollar. a report recently came out (I think) stating the deposit of recoverable oil in the US was much larger than anticipated. this drop the price of oil down (which should harm petrodollar) but USD strengthened. very interesting market forces

    as a rule I dont trust GDP and market swings to value the strength of an economy. you are better looking at the maritime traffic logs detailing real shipments entering and leaving countries
     
  11. pmbug

    pmbug Member

    "Markets can stay irrational longer than you can stay solvent." - Keynes
     
    longnine009, TheFinn, harrync and 2 others like this.
  12. harrync

    harrync Active Member

    Shorted silver at 15 during the Hunt brothers debacle of 1980. Took my losses at 25. Watched it go to 49, then drop to under five. To paraphrase an old ditty from driver's ed about the driver who was "right, dead right" as he refused to yield the right-of-way: "I was right, dead right, as I shorted the longs, but I am just as broke, as if I'd been wrong." [Well, actually I did make about five times as much selling my gold at the peak as I lost on the silver, so I did OK.]
     
  13. medoraman

    medoraman Supporter! Supporter

    Eh, I always found this quote to be a cheap out. Who is to say most of the time if the market is irrational or the economist. Many economists have massively missed major trends. Looking back, they would have claimed the markets were being irrational when in fact it was just their understanding that was "irrational".
     
  14. harrync

    harrync Active Member

    Keynes started his speculations in currencies. At first he was well ahead; then his investments went under water. That is when he made the "irrational" quote. He seemed to learn; eventually, he made quite a lot speculating in currencies and commodities. https://www.maynardkeynes.org/keynes-the-speculator.html And there is no way silver good delivery bars at $49 an oz was rational. [And note is was only good delivery bars that got that high; silver itself never got over about $35.] It was a long time ago, and my memory may be wrong, but I recall a Barron's article from the time that said in effect that the Hunt brothers kept buying at absurd prices because "God told them to." Now if that's not irrational, what is?
     
  15. CoinCorgi

    CoinCorgi Derp, derp, derp!

  16. chucklenut

    chucklenut New Member

    I read that the hunt brothers were just copying their fathers gambling styled investment tactics of going all in
     
    harrync likes this.
  17. harrync

    harrync Active Member

    Probably lots of reasons, conscious and sub-conscious, behind the Hunt's thinking, and the one you cite is probably one of the major ones. If I recall the Barron's article correctly, some clergyman had calculated the gold/silver ratio in the bible [something like "so many talents of gold for so many cattle, so many cattle for so many sheep, so many sheep for so many slaves, so many slaves for so many talents of silver." But a bit more complicated than my illustration. He got 5 to 1 - probably pretty accurate for 1000 BC. It was sort of like Bishop Ussher going through all the begets and coming up with 4004 BC as the date of creation.] They figured that as long as the ratio was above 5 to 1, they were safe.
    The Hunt's had bought a silver mine, which exempted them from the trading limits [why a producer gets to have unlimited longs doesn't make sense, but that was the rule.] As I noted before, the squeeze was in good delivery bars, not silver. One certified refiner was on strike, the others started refining only for themselves. [If you could buy silver coin at $30 an oz, refine it into a good delivery bar, and sell it for $40, why do it for other people?] The Hunt's plan was working until the exchange changed the rules on them; no new contracts, liquidate only. The Hunt's overlooked that one of the exchange rules was "We can change the rules."
     
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  18. chucklenut

    chucklenut New Member

    A salient observation

    I agree; mostly sec changing rules up followed by the silver dumping by us gov And others
     
  19. ToughCOINS

    ToughCOINS Dealer Member Moderator

    Got news for you. It's the dufuses who tell everyone how to spend their money. The geniuses who really have the answers tell precious few others how to spend it, and they get paid extremely well to do so.
     
  20. longnine009

    longnine009 Most Exalted Excellency

    Got news for you, all you did was paraphrase my post.
     
    Last edited: Oct 6, 2018
  21. ToughCOINS

    ToughCOINS Dealer Member Moderator

    No, it may seem that way to you, but I didn't.

    When we see "geniuses" telling us what to do with our money - be it in magazines, on radio or on TV - we're listening to self-interested promoters of one type or another. They have no real secrets to share. They buy media exposure because they anticipate back-end profits from all of the lemmings they manage to influence.

    The real geniuses are the guys who are under contract to organizations like Goldman-Sachs, JP Morgan-Chase and similar market-moving institutions - and from whom we never hear. That's because they get paid to be heard by as few as possible - or at least until after the market has been moved.
     
    Santinidollar likes this.
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