When will the market stabilize? What I am trying to say is that, if you look at the current bullion market, gold is worth more than platinum. This seems like the market is kind of upside down. For example, if you have a gold Visa vs. a platinum Visa, which card has more value? The platinum Visa card is usually worth more. However in the current market, that is not the case. Gold is worth more. This seems like an upside down market to me. Am I the only one that sees that? In the actual trade, gold has more usefulness, it is used in jewelry and to plate the memory chips we all use. Platinum has very small usefulness in the trade. Other than used in catalytic converters, what use does platinum have? Granted, platinum is much much more rare of a metal. It is said that if you took all of the platinum in the world, it would make a cube about 25 ft. square. With gold, you could probably fill an olympic pool. In the past that rarity equaled value, however that is not the current case. So I go back to my original question which is will the market stabilize?
What would people do with stable markets-sit around all day nodding to each other? All is well; all is perfect harmony, and equalibrium in the universe; our keynesian wet dream has come true at last? People affect markets. And people are not rational, logical or control of their emotions as the efficient market farce would have us believe. I think that's why so many people love Mr. Spock-they wish they were him.
I have very little knowledge of markets. But this response brought it down to a level that I can understand -- and I agree with. Thanks.
Investors tend to drive the demand for commodities even more than consumers, but artificially so. This is because that demand is speculative, and not consumption-based. Further, it is because speculation is more often leveraged by investors than by consumers (think commodities contracts). Market swings generally are started by changes or forecast changes in consumer demand for the commodity, while those swings are accentuated or amplified by investor speculation, whether stepping into, or out of the market, creating excess volatility. Since you appear to be trying to make money in metals without actually consuming them in a productive effort, your prospects for profit are ultimately dependent upon changes in fundamental demand, although upon investor sentiment as well. Unfortunately, rather than researching the historical supplies and rates of consumption in the marketplace, you appear content to try and base your investments upon rather broad assumptions. If you want to get really good at this, you need very good data. That is a very specialized area, I do not claim to know any more than you about that specialty, and I do not have the energy or inclination to get that deep into it, however I do know that it is necessary to reliably achieve the level of success you seem to desire. The reason the levels in the bullion market often contradict the fundamentals is because there are so many players who speculate, placing artificial demand on the supply without actually affecting the fundamentals. What did Dirty Harry say? . . . "A man's got to know his limitations." If you don't have the ability, energy and inclination to achieve the necessary level of certainty through good research, you should not expect the results such research would deliver. That is the very reason so many are losers in the precious metals markets. In fact, that is the very same reason so many are losers in the real estate, equities and other investment markets. I'm not trying to discourage you from making money in this market, but to let you know that, if you want to be sure you'll be making money, you need a deeper level of knowledge of the market than you appear to have.
What drives any market ? People. So if you want to predict market trends predict people, not the product.
Predict people !!!!!!!!! let me know how that works out for you........better chance of winning Power Ball
It is the power of marketing, when is the last time you heard a buy gold commercial on the radio?In my experience they are on almost every station, now when is the last time you heard a buy platinum commercial on the radio or television? Plus auto sales have dipped a bit and as you say one of platinums heaviest uses comes from the manufacture of catalytic converters. A few years ago Mercedes developed a radiator with a platinum component that actually removes more pollution than the car itself creates, if that goes into heavy production or becomes mandated by regulators, platinum will take off. The worlds major source of platinum is Russia, and until relations improve with Russia there is a vested interest in powerful forces keeping the price of Platinum low.
People are fickle, fundamental demand is not. I'll sooner rely on market factors that are more reliable.
When prices return to pre 2008 levels reflective of true demand, not demand fueled by fear. Of course that would require a federal government that works together to improve the economy for all of us, so who knows when that will happen.
Predicting market movements is difficult for even specialists. They often get it wrong. It's like trying to time the stock market. You may get lucky once or twice, but you won't make a successful living at it. BTW, @merrill01 , the analogy to gold and platinum credit cards was very loose. Should Platinum as a metal be more valuable than gold? Well only the markets can decide. Supply vs. Demand. Maybe it is upside down at the moment. I don't really follow PM's closely, so I don't know, but you can't compare PM's to Credit Cards.
I don't think you're getting the point - what creates that demand ? People do. And yeah you're right, they are fickle, which is exactly why markets fluctuate as radically as they do - because markets mirror the behavior of the people. So by taking a look at what's going on in the world, and what is likely to happen in the near future as a result of that, it is possible to predict with some accuracy how people are going to react to those events. And once you know that then you know which direction a given market will move. It's basic psychology, nothing more really, and it works quite well. So well in fact that it is even taught in advanced classes on the subject.
Oh, I'm getting you're point just fine Doug. The difference between how I anticipate market direction and what you seem to advocate is that I would base my determination on the more reliable and unleveraged need or desire for a product which consumes the resource - real, fundamental demand - much less volatile than investor demand for resources not to be consumed, but to be divested as soon as an acceptable level of profit is realized. Those are two very different methodologies. I don't dispute that one can make huge money anticipating investor moves, however, absent an understanding of fundamental demand, that is the province of those with a great tolerance for risk, and for those with the ability to actually move markets on their own . . . neither of which are likely CT members. Hopefully I have not wrongly mischaracterized any CT members as being risk intolerant or unable to sway markets, but I prefer to discuss that which better suits the intended audience.
