What’s holding silver back?
Crusty
Posts: 1,107 ✭✭✭✭✭
I stopped stacking gold and silver about a 8 years ago. Got heavily into numismatics… So I have been out of the loop on PMs for quite some time. I’m wondering what you guys think is the reason silver has not taken off? With gold recently hitting 2k why didn’t silver go back to 50? Is it to many paper silver contracts, low industrial demand, to much supply, bank manipulation? If you believe it’s any of these things or something else I’d love to hear more…
On another note why the hell are premiums so high for silver eagles? How long has it been like this and do you guys expect this to last?
Thanks in advance for any comments…
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Wondered same on certain stuff. Did somebody hijack the pricing system? Just stick to your own gut feel and common sense. Research Kitco what do they say?
I do find stuff can get cheap these days. I recently picked up a PCGS 69 Mod Commem Silver dollar for around $30, slab cost. Probably not much more over melt than premium they asking on raw ASE. Have won graded low pop (single, dbl digit curr grade and higher) world material PCGS, NGC, PMG for what it would cost 2 people go out to dinner or less. Works for me and fun. We’re just a lean mean recruiting machine.
As far as getting in bid war for some US over promoted generic (pop in thousands) or better coin vs some rabid buyer not my cup of tea. Just executing my usual buy low sell high operation mode.
No idea but astounded. I would just google it on ASE Mkt / premiums. Until they come down not a buyer. Blew out a lot during pandemic nice profit - plus Reduced slab inventory 75 pct. Settled on 80 as a plan roster number. I could see it if silver going up in leaps and bounds.
bullion bank manipulation in the futures market continues to limit spot price. The Department of Justice has confirmed this numerous times over the years resulting in heavy fines. Guess the fines are not as much as the profits. LOL
Rising premiums for physical indicates increased demand and increased awareness of manipulation of the spot price. At a high enough premium futures contract holders will demand physical delivery and break the hold on spot price.
Anyone who pays more than spot for physical is agreeing, whether they admit it or not, that they know spot price is bogus.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I understand your sentiments. I think silver being range bound for 2 years is insane with all of this crazy inflation & war. Don't know what will ever light the spark to send it upward.
Speculators, along with supply & demand, drive all markets, including PM's. Even if only one of the three is not currently involved, prices will remain flat within a narrow up & down trading range. Learn to live with it and adjust accordingly, It's been like this since the "stone age" and not going to change.
Tons of paper options doing their thing, online supply pricing delivered doing their thing. Tether between the 2 was busted.
Thanks for the replies so far. Please keep them coming.
@derryb - I remember banker manipulation was a common theme years ago. And I don’t really know if there is any validity to that assertion. But I do remember hearing the buy silver and crash JP Morgan anthem. That obviously never happened. So logically it leads me to my next question. What makes anyone think that the manipulation will stop?
Another question for the forum. How much silver or gold does it take to be considered prepared for a currency crash. I remember hearing you should own your weight in silver and your birth weight in gold. Thoughts?
JPM is bigger than ever, silver is still the gutter. Some things never change, at least not in our lifetimes. RGDS!
That’s kinda what I’m getting at. What’s stopping them… I am not in the camp that thinks silver is going to the moon. But I’m really curious why it has not jumped back up to 50 like gold jumped back up to 2000. The manipulation if it exist was here in 2008 like it is now. The demand for physical is here now like it was in 2008. What gives…
Charges and fines against multiple bullion bank traders on multiple occasions by the Department of Justice validates the assertion of price manipulation. The crimes were committed while trading in the futures market.
Ironically, since the Reddit "Wall Street Silver" drive to increase physical demand, silver premiums have risen considerably more than those of gold and continue to rise. Maybe they did have an impact. Premiums are what tell us the supply/demand status of real silver. Unlike futures paper promises, there is a limit to the supply of real silver.
Price maniplation has apparently been blessed, if not encouraged, by regulatory agencies with simple fines that apparently do not put an end to it. I guess the message is "don't be so obvious." The only thing that will put an end to manipulation is massive demand and outrageous premiums that drives those buying futures to demand physical delivery to the point the COMEX does not have enough silver in its vaults and defaults. The physical market is what will break the paper market.
I keep at least 75% of my savings in PMs. PMs are dollar protection, not an investment. Dollars NEVER keep up with inflation, PMs mostly do. When I need more cash (at its previous higher value when I bought the metal) I sell some metal.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The speculators in silver left the boat more than 10 years ago, and have not returned. Bigger fish getting better returns.
It will certainly be interesting moving forward. If the war, inflation, banking fines for manipulation and gold moving back to its all time high couldn’t bring silver back up to its old high . Im not sure what can!?! The idea of silver contracts being turned in for physical and breaking the link between it and the physical just doesn’t seem like it’s in the stars. I guess we will wait and see….
I used metals as a savings account as well. I may end up dipping my feet back in but these premiums are hard to stomach.
I see that ASE are about $32 wholesale and around $38-40 ask.
So by the way I figure if real first quality ASE are $40 then the GSR is $2000/40 or 50 to 1. Time for me to start leaving silver behind in favor of gold.
I just bought 25lbs of 90%. What a nightmare to go through it. I only bought it for (paper) spot. Otherwise, gold for me at this point.
I keep thinking the 'little guy' drives the silver market speculation. The little guy might be flat broke
People buying physical metal are driving the price of physical metal. That's how all markets are supposed to function.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"I keep thinking the 'little guy' drives the silver market speculation. "
FYI. "The little guy " has never driven anything. Except maybe a Mule or Oxon buggy.
If anyone here still thinks silver and gold is a good hedge against Inflation I’d like to know why.
@streeter - I had the same thought about the "real" gold to silver ratio… but the problem I see with buying gold right now is we are buying around the all time high. Doesn’t feel right doing so. I’m thinking silver has a much easier and justifiable way back up which has the potential to realize bigger gains. While gold may struggle just to get back to 2000 or 2200…. I think silver may have a better chance to realize some gains?
I have two friends who just bought buckets of gold both pre 33 and AGE and buffalos. One bought $170,000 from proceeds of a rental sale and I helped another guy and his wife buy about 100DE this last year. I go to Long Beach and I buy one or two DE, he buys 20. We had dinner together and he showed me the 'other' hundred he bought without my knowledge. He was so proud of himself but I didn't have the heart to tell him he messed up on half or more that he bought.
These guys are not coin collectors. They just want double eagles. They don't mind buying what I would call a 'mistake'.
I try to buy maybe one piece of gold a month. A piece that gets my blood pressure going. These other people just don't care. Back up the wagon.
The only reason that I bought the silver is because I've known about it since the 60's. There was also a lot of WW2 items in the lot. I'm a hard core collector. One picture of a fairly nice SA dagger. I don't want to derail the thread.
History.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Db
One person collects coins and another tries to get a grasp of a bigger picture.
A coin collector has a hard time looking at gold how we would look at it. I collect coins, for 60 yrs, but I also realize I need gold 'just in case'.
Coin collectors rarely see the need to have generic gold laying around. You can't predict the future. Be safe.
What advice would you give people who are interested in buying precious metals…When they ask how much should my family own? Is it related to one’s net worth? Is it a certain amount of ounces per person? Or is the answer as much as you can afford?
How much can you afford to lose? Metals are unpredictable; I recommend not using borrowed funds or money needed for necessities...
The correct answer is different for each individual and each family. And certainly stay away from television shopping channels and telemarketing firms... Only use trusted firms such as those frequently mentioned in this forum...
Can you please explain this chart? The gold plot appears to be cumulative while the inflation figures are changes in the rate of inflation and not cumulative.
Is it purposely deceptive or just poor chart building?
Knowledge is the enemy of fear
Absolutely terrible. I'm sorry.
What's holding silver back? The gutter. RGDS!
@tincup - Thanks for the advice. I plan to slowly but surely add to the stack as opportunities come up. I held my silver and watched it hit the high and was waiting for it to hit the moon. Then it tanked. Sold almost all of it around 35 bucks. I was a damn fool not to sell at the 49 mark. This time around I’m not in it for investing purposes. It’s strictly in case the currency collapses or some other shit hits the fan. It’s just hard to swallow the premiums not. Like I said slow and steady will win the race.
@blitzdude - DBs savings strategy works well for me too. I guess I’m not disciplined enough to leave a large pile of cash in the banks. I hate banks they have been robbing the people for far to long!
you need to learn to read charts. The inflation rate (values on the left) is shown over time and the price of gold (price on the right) over the same period of time is overlayed on the chart to show that gold price rises and falls in tandem with the inflation rate. Nothing in the chart is cumulative, they are values at a particular point in time.
The only thing deceptive is your typical attempt to complicate/confuse something simple.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@derby was buying gutter at $50 over a decade ago. It's now $23 so 50%+ lossright there. Now factor in inflation compared to a decade ago and he/she/ her/it is down 75%+. Can't think of a worse investment? Enron maybe?
I'm a self employed geezer. I just take ten percent of my profit and buy what I like. Could be 19th century type or bulk silver or mostly pre 33 gold. I buy PM's that are coins as close to basal value as I can. I always figure in the cost to get it out of the ground. With gold at about $1,100-1,300 mining cost and silver below $15, I'm cautious at these price levels.
Very cautious.
Pretty tough to buy marketable physical silver at $23. There's a lot of interest at that level.
I only know one company that bought at the peak. I went into the shop and customers were 4 deep at the counter. The shop bought it $200,000 that day and sold $100,000 retail and wholesaled out the rest at 4pm. They made money all day. Probably 10% or $20k. Smart buyers don't buy at $50 and fall asleep.
BTW,
That chart is about as straight forward as it gets. I backed off gold at about $600/oz in around 2007. Boy was my timing poor. I suppose I saw us heading into TGR and I was nervous about the run from $275-600 and couldn't imagine it still had a 3 bagger left.
Too bad your speculation on my trades is no better than that with your own trades. Maybe this is why you are in the gutter. Since you are so worried about my trades, I was selling at $50, probably to you on ebay. LOL
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Actually there is a lot wrong with that chart. Perhaps what is simple is not the chart
but its your narrative so ill use it.
A comment was posed as to gold not being an inflation hedge. Clearly the chart shows gold going lower for at least a 15 year period while the red shadowstats inflation line (the real inflation rate, right?) moves higher. So you just proved @crazyhounddog correct.
Why does the chart end in 2011? Hmmmm....whats being hidden?
Knowledge is the enemy of fear
The manipulated spot price shown follows the manipulated (reported, green line) inflation. Red line show unmanipulated inflation rate compared to the manipulated spot price. We do not have an unmanipulated (higher) spot price for apple to apple comparison to the red line.
The chart clearly answers his question with the two apples it provides.
It's a historical 38 year chart being used to appropriately answer a question. Please, feel free to find a more current one and you are likely to find one that expands on the dramatic proof of inflation protection shown in the last four years of this chart.
Your attempts to distract continue to be on full display. The only thing being hidden is your agenda, but it makes for good speculation.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The table does not show how gold has performed vs. general price increases over time. This one does:
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Over the entire period, gold performed somewhat better than the CPI. The data starts 3+ years after US dropped gold settlements in 1971 so it doesn't include some of the biggest gains in gold vs CPI during gold's adjustment coming off the standard. But the moral of the story is that gold has done a reasonably good job at preserving wealth OVER EXTENDED PERIODS. However, over shorter timeframes (look at 1981 to 2000) it is not always the case. A comparable chart for silver would look much worse, but only if you bought during the 1979-1980 cornering of the market. Otherwise, long time silver investors are beating CPI too.
Google says average American Man is 195 pounds and average birth weight of a male is 7lb 6oz
So according to that the average person should have about 3000oz of silver and 110oz of gold...
Theres a guy I work with whos easily 330, and i've heard of 13 pound babies before, someone like that would need 5000oz+ of Silver and about two hundred ounces of Gold!!
It's all about what the people want...
LOL. Looks like Google is a little 'off'.
What I've found is that people who value the virtues of gold and silver are the ones who've had success and a plan that works.
People who bash it have gotten killed in it and/or it didn't work out well for them. I only pay attention to those people to learn from their mistakes or misunderstanding.
bullshit is what is holding it back. down almost $4/oz in under 2 weeks lol
spot price or physical price?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I understand the sentiment. But premiums are the same they were 2 weeks ago at Upstate and spot is down $4/oz, so it would be both.
my point is physical buyers value silver more than bullion bank paper traders who create the volatility in spot price to profit from it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Does anyone here short the paper and buy the physical? What are your thoughts on this?
I short and long the paper (metal ETFs that offer volatility) for quick, easy, no hassle profit turnarounds. Doubt if you're gonna find any futures exchange paper traders here. There are metal short ETFs available. as well as leveraged (2X and 3X) short (inverse) and long ETFs.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The price of gold is a snapshot, the rate of inflation is a mathematical function. They are apples and oranges, not remotely in the same category. Maybe there's a relationship, but the graph doesn't represent it adequately.
A valid comparison might be the rate of inflation vs. the rate of change in the price of gold over time, but I've never seen such a chart, and it would take some work to develop it. A statistical correlation study would also be informative, but I suspect that other outside variables besides the rate of inflation might be significant factors in the price of gold as well.
I knew it would happen.
I think the chart has the legend backwards. The blue line is the cumulative CPI and the red line is the gold price.
Much better chart. Thanks RobM.
If one were to start the chart at 1980 gold would not have held up, if started in 2000 then it did better.
My point is people really need to know what is being presented in these charts and how they can be manipulated (derryb) to promote a narrative. Everything needs to be put in context, otherwise one will be easily manipulated (derryb).
Knowledge is the enemy of fear
You can trade options on futures.
Knowledge is the enemy of fear
And bullion dealers do not manipulate the premiums?
Knowledge is the enemy of fear
@dcarr said:
@dcarr, good catch.... The labels are indeed reveresed on that chart.
the buyers agreeing to the bullion dealer price manipulate the premiums. Either they pay them and premium inches upward as it has been, or they don't pay them and price inches downward.
Unlike futures contracts, sellers of physical metal cannot conjure supply out of thin air. You seem to forget that supply is a major component of price discovery.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey