Observations from an outsider...

Artist

As I shared in a recent post, I was recently tasked with moving some gold and silver my family had acquired over the years - it seems I picked a very interesting week to start paying attention to metals!

It has been fun getting a crash course (literally) on some of the basics of this market. With regard to the big losses that have been occurring relative to last weeks highs, it seems there are two schools of thought:

a.) That we just witnessed another Beanie Baby event, where are the Game Stoppers ran up the price on silver, and now the Bull has been replaced with a dead cat that will (to paraphrase other member's remarks) bounce all the way to gutter and stay there for the next 10-15 years.

-or-

b.) Unlike past booms where the market was run up artificially, this time it got crashed artificially, first by JP Morgan, and then again by (6) players in Shanghai. But beneath the leveraged paper traders being flushed out and the bandwagon riders at the very peak, the fundamentals that have led to the past year's substantial gains for metals remain, and that the wild fluctuations we are seeing are evidence of some tectonic reordering.

I am not versed enough to speculate all-in on either scenario. But as an outsider who just kinda stumbled across this week's crime scene, I do make one observation: when pundits talk about metal market fundamentals, they usually refer to industrial demand, physical shortages, and global uncertainty, but a new fundamental I am seeing appears to be market instability itself.

To explain, I have a 19yo daughter. She does not know what it means to by a vinyl album or CD and listen to it as a cohesive work; instead she downloads every latest single that was specifically engineered to garner as many social media likes as possible. Similarly, she has never had to wait a week to find out how an episodic TV cliffhanger is going to resolve, because she can stream the whole series at once. Her generation are less apt to sit through movies, and more likely to just watch the highlights and derivative memes on Tik Tok. As little as I know about metals, I know even less about crypto, but to a generation with extremely short attention spans, I understand the appeal.

Yesterday I read that Bitcoin can move in parallel with silver, possible as a temperature check on the over all market's appetite for risk? Yesterday silver dropped from a high of $90 to low of near $60, while Bitcoin dropped from around $68 to $59K. Today silver is hovering at about $75, and Bitcoin is back up to $71K. As I see it, these kinds of moves align with sensibilities of a generation whose parents got their babies to be quiet in restaurants by handing them screens.

I think instead of looking to see if metals return to being a sleeping a bear or continue being a raging bull, I am more inclined to think that going forward, price volatility itself will become an increasing part of their value.

softparade

Volatility looks a lot different with $120 silver than it does with $23 silver. But, to your point, many shops have stopped re-stocking all together through their normal sources. Buying only organically in their brick and mortar from their customer base and walk ins at their own dictated price off spot. Until their is some kind of a sense that stability is part of the equation again. Whenever that may be!

Wingsrule

Well written post.

jmlanzaf

Interesting post.

jmlanzaf

@softparade said:
Volatility looks a lot different with $120 silver than it does with $23 silver. But, to your point, many shops have stopped re-stocking all together through their normal sources. Buying only organically in their brick and mortar from their customer base and walk ins at their own dictated price off spot. Until their is some kind of a sense that stability is part of the equation again. Whenever that may be!

10% swings at any price would be considered volatile.

softparade

@jmlanzaf said:

@softparade said:
Volatility looks a lot different with $120 silver than it does with $23 silver. But, to your point, many shops have stopped re-stocking all together through their normal sources. Buying only organically in their brick and mortar from their customer base and walk ins at their own dictated price off spot. Until their is some kind of a sense that stability is part of the equation again. Whenever that may be!

10% swings at any price would be considered volatile.

of course ..... 10% is EXTREME volatility when talking Ag. We have seen much higher than that recently. That's some levels above EXTREME.

DisneyFan

Just focusing alone on silver price movements prevents one from being able to see the forest for the trees.

The stock market as a whole has also been volatile. The price of the SLV ETF is based on the spot price of silver, discounted for the years of its management fees. Today SLV was up 2.5% while
DOW :50,115.67 ▲ gain 1,206.95 2.47%
NASDAQ :23,031.21 ▲ gain 490.63 2.18%
S&P 500 :6,932.3 ▲ gain 133.9 1.97%

TwoSides2aCoin

I spent five figures worth of IOU’s (paper) for 3 figures worth of silver coinage, today. The lady said it was left to her by her dad. Since she saw the way silver has gone, she decided to sell some. I reminded her that if she would have sold last week it would have been 30% more.
Of course, when the pandemic hit, and the Govt. issued that much in stimulus, I pleaded with my daughters to get 70 oz of silver with their money. They didn’t hear me. Everyone heard about it when it was $100. Yet, it is still more than twice as much as it was a year ago, even after the recent “crash”.
My daughter is almost 41. She knows vinyl. I’m kind of embarrassed to say Pink Floyd’s Dark Side of the Moon is her all time favorite record. She needed to quit listening to “Money” and learned how to work it.

Overdate

@TwoSides2aCoin said:
My daughter is almost 41. She knows vinyl. I’m kind of embarrassed to say Pink Floyd’s Dark Side of the Moon is her all time favorite record. She needed to quit listening to “Money” and learned how to work it.

A rare pressing of Pink Floyd’s Dark Side of the Moon recently sold on eBay for over $4,000, with five other recent sales over $2,000. Quite the investment!

Goldminers

@Overdate said:

@TwoSides2aCoin said:
My daughter is almost 41. She knows vinyl. I’m kind of embarrassed to say Pink Floyd’s Dark Side of the Moon is her all time favorite record. She needed to quit listening to “Money” and learned how to work it.

A rare pressing of Pink Floyd’s Dark Side of the Moon recently sold on eBay for over $4,000, with five other recent sales over $2,000. Quite the investment!

Happened to have pulled this Mobile Fidelity Original Master Recording album off the shelf just yesterday after buying some new silver-plated copper stereo cables with gold plated bananas. Plenty of good uses for precious metals.

JBK

@Artist said:

To explain, I have a 19yo daughter. She does not know what it means to by a vinyl album or CD and listen to it as a cohesive work; instead she downloads every latest single that was specifically engineered to garner as many social media likes as possible.

Not to hijack your thread with your own words 😆 , but I've lamented this development for some time. Sometimes the best tracks on an album are not the ones that are released and hyped as singles. What a huge loss to not know what it's like to play an album through from start to finish. Sure, after listening to it many times there might be a song or two that you skip over but at least you are familiar with them.

Similarly, she has never had to wait a week to find out how an episodic TV cliffhanger is going to resolve, because she can stream the whole series at once.

I'm in one of the last households to actually watch weekly episodes. Even when we record new shows we watch them as standalone episodes rather than save them up and binge watch them. Although these days even TV seasons are messed up, with many shows having a fall season and an early spring season.

Think of all the season cliffhangers that don't have the same impact in today's world.

Maywood

Not sure about music that’s released in the present day, but when I came of age in the late 1960’s and on up an artist/band went to great pains to compile an album. The song order wasn’t willy nilly, it had thought behind it.

Using Dark Side as an example, a lot of listeners probably download “Time” because it’s a really great song and skip right past what comes before and after. I find it nearly impossible to separate it from “The Great Gig in the Sky” but down loaders do it all the time.

taxmad

@Maywood said:
Not sure about music that’s released in the present day, but when I came of age in the late 1960’s and on up an artist/band went to great pains to compile an album. The song order wasn’t willy nilly, it had thought behind it.

Track listing was such an art form back then. You dropped the needle and listened to the side. In a perfect world, you had a player that could drop multiple albums - or at least turn off when the album was over. College roommate played Dark Side of The Moon every night - took me years before I could listen to any of those songs while driving.

pmh1nic

Bitcoin rose 1200% from 2019 to 2024 (~$3,400 to $44,000) while silver rose 80% (~$15 to $29) over the same time period.

Artist

@pmh1nic said:
Bitcoin rose 1200% from 2019 to 2024 (~$3,400 to $44,000) while silver rose 80% (~$15 to $29) over the same time period.

Exactly. The new "fundamental" I feel like I may be observing, is how wild fluctuations may indicate that silver is becoming something akin to crypto by a new generation of traders, wherein volatility itself a form of value.

pmh1nic

@Artist said:

@pmh1nic said:
Bitcoin rose 1200% from 2019 to 2024 (~$3,400 to $44,000) while silver rose 80% (~$15 to $29) over the same time period.

Exactly. The new "fundamental" I feel like I may be observing, is how wild fluctuations may indicate that silver is becoming something akin to crypto by a new generation of traders, wherein volatility itself a form of value.

For the last few years there has been an industrial deficit for silver which is predicted to continue. That along with some speculation drives the cost of silver. Bitcoin is driven by speculation. It's not a currency, so far has no real industrial value and the price is totally driven by speculation. Totally different asset classes.

derryb

I'll take your door number (b)

Also cash and not PMs to heirs if they don't know the PM market. They will get hosed at a shop.

derryb

Track listing was such an art form back then. You dropped the needle and listened to the side. In a perfect world, you had a player that could drop multiple albums - or at least turn off when the album was over. College roommate played Dark Side of The Moon every night - took me years before I could listen to any of those songs while driving.
plays in my head every night, puts me to sleep

derryb

wrong thread