Silver v. Gold. A Tale of Two Markets

MsMorrisine

Obviously the pain from the collapse from $49 is still being felt.


When will silver's fortunes turn around for the higher??

BigE

I am sure the recent drop from the highs is part of it, but if you have ever had to move 20K in silver as opposed to gold, you know what is easier. Who knows, maybe running with a large stash of gold might be on the minds of a few---------BigE

MoneyLA

At some point someone is going to realize that the poor man's gold (silver) is awfully cheap.

But if the worries about a world wide economic slowdown continue and if the world economy continues to slow and industrial demand for silver drops then the poor man's gold could get even cheaper.

Frankly, I'm puzzled that silver is going down now.

DoubleEagle59

Wait for QE3.

Silver will surpass $50.

DNADave

I really thought it would go up...so much so I bought a little over 3K over past few weeks. Oh well, have to sit on it.

cohodk

The market is differentiating "precious" metals and "store of value".

Wolf359

<< <i>Wait for QE3.

Silver will surpass $50. >>



In my opinion, the shorts are terrified of QE3. Just look at what QE2 did. Silver went from 18 to 49+. Silver is being desperately manipulated as low as possible to 1) Survive QE3 and 2) Slow down Gold.

roadrunner

Hard to slow down gold from the USA alone when Asia, Europe, Africa, Australia, and South America are all buying it. The US isn't the only game in town anymore.

roadrunner

Bear

I bought 6 tons of silver, but I am having one heck of

a time, getting it all under my bed.

storm888

Folks seem to have decided that gold is money, and that silver is just, well, silver.

Silver in the high $20s and low $30s still interests me, but not at $40. Even $70
would prolly be safer than $40.

Folks with no silver should buy some; folks with plenty of silver should buy gold
and ride the rocket ship for awhile. If the ship backtracks for refueling in the <15C
range, bet the ranch.

vann

Being it's far easier to take a highly leveraged position in silver than gold, I would say it's deleveraging. The fall to $32 was caused by the CME margin requirement increase in two weeks, spread over four separate changes that caused the COMEX 5,000-ounce silver futures contract (worth $195,000 at $39/oz) margin requirements go from $11,745 to $21,600. When equities are falling sharply, traders will sell what they can to raise cash and avoid liquidating the position. Eventually the weak positions get flushed out and new money comes in. If silver goes below the $38 support level it could break down further though.

MoneyLA

The more I think about it, the more I'm convinced that there is something wrong here: silver should rise with gold.

Something has got to give. Either silver will shoot up, or gold will come down.

I've tried to justify silver and platinum going down because of weak industrial demand, but it just doesn't make sense.

Help me out here.

jmski52

I bought 6 tones of silver, but I am having one heck of

a time, getting it all under my bed.

Bear, I can understand your problem. What size is your bed? If it is 80" x 72" x 6", then you have about 426,000 cubic centimeters of crawl space, but your 6 tons of silver = 518,807 cubic centimeters, about 22% too small.

Can you get a king-sized, or a California king-sized bed?

cohodk

I've tried to justify silver and platinum going down because of weak industrial demand, but it just doesn't make sense


Why doesnt it make sense?



Platinum is WAY too small a market to garner serious investment demand.

Silver is WAY too bulky to generate serious investment demand.

Platinum is much more rare than gold, yet doesnt trade with a commensurate premium. Why, because it is a white metal. White is bland, boring, cold. Gold is yellow and warm, inviting. Gives one a feeling of happiness.

Has anyone ever wondered why gold gained acceptance as precious metal in the first place?

Coins101

<< <i>I bought 6 tones of silver, but I am having one heck of

a time, getting it all under my bed. >>



Sounds like an extra firm mattress to me!

fiveNdime

<< <i>Has anyone ever wondered why gold gained acceptance as precious metal in the first place? >>


yes.
my guess is somewhere in history, the ladies thought it was pretty. much like like diamonds.


ive never been bitten by the gold bug. however, the boring, cold white metals bit me hard.

Bear

If we backed our money with pickles and told the public that the bills could

be redeemed in pickles. Other then a few dozen pickles, how many pickles

would an average person need. A pickel is green like money, can be made

in huge quantities can be preserved and they taste good. Especially

with deli.

gecko109

<< <i>I bought 6 tons of silver, but I am having one heck of

a time, getting it all under my bed. >>





A mattress of dimensions 84" x 60" x 12" ......if made of solid silver.....would weigh just over 10 tons. So is it possible to get 6 tons of physical silver under your bed? No problem....so long as your floor holds up!

KUCH

All my life I've stressed fundamentals first.

Bear..... get a bigger bed.
Gold has always been the go to metal with regards to central banks. The East gets it, we need to follow suit at this time cause everything is going east.
Silver is there to make a profit, but does big money flow there?

fivecents

Silver will have it's day. Its just a matter of time now. jmho

vann

CPM group commodities market research latest May 2011 silver yearbook report certainly makes a bullish case for silver. A key factor is China, which is the 3rd largest producer of silver in the world and until 2006 a net exporter of silver, has seen it's silver supply, fabrication demand and investment demand triple since 2000. Despite record production, China is now a net importer of silver to keep up with an increasing fabrication and investment demand.

lightcycler

<< <i>Silver will have it's day. Its just a matter of time now. jmho >>



When silver was running to 50 and gold was lagging people were musing why? I agree silver will have its day to shine again. If your looking at holding PM's for anything less than years your in for an ulcer inducing ride

Konahead

<< <i>I bought 6 tons of silver, but I am having one heck of

a time, getting it all under my bed. >>



Time for a bigger cave

MoneyLA

On Tuesday I talked with a Chinese businessman in LA who buys stuff for export to China. Mostly commodities. So I asked him about demand for gold and silver in China.

He shook his head and said he's here to buy something that will rise in value faster with a bigger percentage gain... iron and scrap steel.

So what does that mean to the precious metals? It means to me that silver and platinum which today are undervalued because of a lack of industrial demand will have their day as the Chinese industries grow.

vann

Gold up 6.6% on the week, silver 9.5%. Considering all the focus on gold this week, silver has caught up nicely

cladking

<< <i>At some point someone is going to realize that the poor man's gold (silver) is awfully cheap.

But if the worries about a world wide economic slowdown continue and if the world economy continues to slow and industrial demand for silver drops then the poor man's gold could get even cheaper.

Frankly, I'm puzzled that silver is going down now. >>




I'm hardly surprised. It's something I always feared because I've avoided gold and concentrated on silver.

There is a finite chance that they'll allow the economy and dollar to crash which will be good only for gold.
I've always assumed that this would be devastating to the economy and politically unacceptable in which
case they'd be forced to inflate and this would cause all assets to increase with silver possibly leading the
way due to being both a monetary and industrial metal and because it is scarcer and less expensive than
gold.

Predicting the future is always easy. Being right is the part no one can do.

cladking

<< <i>CPM group commodities market research latest May 2011 silver yearbook report certainly makes a bullish case for silver. A key factor is China, which is the 3rd largest producer of silver in the world and until 2006 a net exporter of silver, has seen it's silver supply, fabrication demand and investment demand triple since 2000. Despite record production, China is now a net importer of silver to keep up with an increasing fabrication and investment demand.


>>




I like the way that demand is beginning to look like the bottom of a parabolic curve. I've always
assumed technology would require ever increasing amounts of silver.

This curve is in effect despite the fact that silver price has increased ten fold over the time period.

I still believe silver has to go to the moon and that the bankers caused it to be used up which will
be a huge burden to our grandchildren.