Has anyone looked at silver in Asia tonight ?

[thebeav]

WOW.......down 5% in NY today....Now another 7% in Asia.....

13.00 spot.......

Great timing actually, tonights my garbage night.....

 

Paul

[gmarguli]

Down 1/3 the past 30 days. The other precious metals are dropping also. It's about time. People figured out the world isn't ending and you car won't run on silver and gold and you can't serve it for dinner.

[physics-fan3.14]

All the commodities are down. I couldn't believe it when I checked silver today and saw it at 12.92. And gold is below $800 as well. And lo and behold, oil is at $115 and didn't shoot straight up on news of a significant war in a major oil producing region. Did the bubble pop, just like I said it would?

[cpm9ball]

Maybe I should return my Buffalo fractionals to the Mint and renegotiate the price.

 

Chris

[World Colonial]

This appears to be the beginning of the decline I was looking for, though if it is it has been much later than I thought.

[coinman1794]

I'm not ready to give up on gold yet. There is plenty of instability in the world. I will be buying.

[zrlevin]

I'm not ready to give up on gold yet. There is plenty of instability in the world. I will be buying.

 

Me too. I bought some silver yesterday.

[gmarguli]

Platinum is really getting crushed today.

[ant]

if gold keeps falling i will be able to finaly re-up on my jewelry stuff. im hoping for a lil bit more of a drop.

[gmarguli]

Not that they make many coins out of it, but Rhodium is down almost 20% today - that's down $1,240 today - not down to $1,240, but rather down $1,240 today!

[jtryka]

You know, I saw this today, and then went to the mint website to see if they'd priced the upcoming Jackson Liberty spouse coins and was actually surprised to find they are sold out of proof silver eagles. I called and the woman said they were out and didn't know if they would make more. So I think I found one online and bought it, but you can never be sure if it isn't sold out and you just get an e-mail a week later with no coin. Then I thought, with prices down, I should buy a few bars since I have some extra cash, and guess what? None of the places online I looked at had any bars available in quantity!

 

So yes, silver (and gold) sold off today, but I doubt anyone was selling any real silver, just paper contracts on the comex since I couldn't find any physical silver available. Maybe in the headlines or at the hedge funds paying a lot for a piece of paper that promises silver is a good investment, but if I'm gonna shell out $10,000 for silver, I want it in 100-ounce bars, no paper required. And today, that just wasn't happening. The lesson here is that there is starting to be a significant disconnect between the paper market and the physical market, and even though the specs sold "silver" down to under $13 today, there doesn't seem to be much actual metal being sold at that price.

[nwcs]

I'm glad to see gold go down. Just bought an 1853 gold $1.

[physics-fan3.14]

Interesting observations Jeff. What are the implications for the future of the commodities market?

[jackson64]

as a long-range collector who doesn't plan on selling for another 15-20 years, I am glad for a drop so I can accumulate....

 

and there IS plenty of silver to be had--not just a paper drop...a $1000 bag of Peace and Morgan dollars is a little over $14,000...and that hasn't been adjusted for todays .80c drop

[jtryka]

as a long-range collector who doesn't plan on selling for another 15-20 years, I am glad for a drop so I can accumulate....

 

and there IS plenty of silver to be had--not just a paper drop...a $1000 bag of Peace and Morgan dollars is a little over $14,000...and that hasn't been adjusted for todays .80c drop

Ok, mint condition silver dollars each have 0.77344 ounces of silver, so a $1,000 bag would have 773.44 ounce of silver, which at $14,000 is $18.10 per ounce, or about $5.35 over "spot." To get even at $1 over spot, that bag should be selling for about $10,700! So yes, silver is available, just not at the prices the futures market is dictating, and that's my point! I just looked on eBay, and the cheapest 100 ounce bar I could find that was listed TODAY, after the big drop was $1,600, still more than $3 premium, when normally 100 ounce bars sell for between 30c and 70c over spot. Something is not right, whether you believe it or not.To me, this is a case like in economics, where you set an arbitrary ceiling price limit which is below where the supply and demand curves intersect, and all you get is a lot of ready buyers and no sellers. The futures market is becoming an ineffective price discovery mechanism for the physical in this particular market. And to test my theory, I've even put an offer to buy in the marketplace forum, let's see if there are any takers.

[thebeav]

There just seems to be a squeeze on physical. I don't necessaraily think that dealers are unwilling to sell. I'm certainly not. It's just that there are more buyers, with this quick drop, then there are sellers.

Kitco has posted a disclaimer saying that they are backordered on everything physical. They say that orders are still being taken, prices guaranteed, but a back date on shipping.

 

Paul

[jtryka]

I would agree with your assessment Paul, the scary thing is that if the paper market were serving as an effective price discovery mechanism as it has in the past, then there should be no "squeeze on physical" and buyers and sellers should be in equilibrium. Clearly if there are more buyers than sellers and places like Kitco are having major delivery delays on physical, there is no equilibrium.

[hoard]

I am with you on this. I find it impossible that the price of gold is going down. Inflation is up, up, up. M3 money is growing as the government continues its path of issuing dollars to pay debt, making a national debt grow even more. The dollar has lost half its value since the early 2000s, did I say inflation is up, and economy is not producing jobs that are creating value. The biggest problem is we have let our financial institutions fail by creating a system that allows excessive speculation which then skews the value of some assets. Personally, I am not selling my gold or silver at these levels.

[thehumantorch]

I am with you on this. I find it impossible that the price of gold is going down. Inflation is up, up, up. M3 money is growing as the government continues its path of issuing dollars to pay debt, making a national debt grow even more. The dollar has lost half its value since the early 2000s, did I say inflation is up, and economy is not producing jobs that are creating value. The biggest problem is we have let our financial institutions fail by creating a system that allows excessive speculation which then skews the value of some assets. Personally, I am not selling my gold or silver at these levels.

 

Absolutely agree, the U.S. is printing money as fast as it can.

[World Colonial]

You are ignoring the deflationary aspects of the current contraction. Most of the purchasing power in the world economy today is credit which is what the supposed "money supply" is also. The only part of the money supply that is not credit is physical currency, the rest is DEBT. The total amount of outstanding USD credit and debt is what? $50 trillion? And currency in circulation is what? About $1 trillion?

 

And today, the nominal debt is either close to a zero growth rate or rising slightly while many of its components such as mortgages and commercial paper are collapsing even if others such as government debt are still rising. But on a market value basis, there is clearly monetary deflation and no one can deny it because the open market price of most debt instruments has decreased as credit worthiness has deteriorated and credit spreads have widened to multi-year if not record highs. And the decrease in the market price of debt is what matters because that is what determines the cost of borrowing.

 

Now I happen to use a monetary definition of inflation and deflation while possibly everyone else on this board thinks in terms or price changes like the CPI. But the CPI and other price indices are the RESULT of the monetary aggregates and changes in collective psychology,

 

Now that psychology has turned bearish in the credit markets, credit availability is contracting and unless this changes in the near future, and though most consider it impossible, I believe there is a greater risk now of declines in the prices of goods than there was in 2002 when many were worried about "defaltion"..

 

In terms of gold and other metal prices, we do not know what is going to happen. I have been bearish on a shorter term basis the metals (and wrong) though I am bullish longer term. It is entirely possible that even if we experience the worst economic contraction in our lifetimes as I expect and it is deflationary, gold could still rally. But I consider it at least equally likely that gold and metal prices will fall if credit conditions continue to worsen as I still expect. The reason for this is that the capacity to buy everything, including metals, will decrease if this happens.

 

As far as the relationship of metal prices to the CPI, gold as of today is selling for less than it was in 1980 even though prices in terms of the CPI are much higher. So this is unlikely to be a useful basis on which to base any metals price expectation.

[World Colonial]

 Originally Posted By: hoard

I am with you on this. I find it impossible that the price of gold is going down. Inflation is up, up, up. M3 money is growing as the government continues its path of issuing dollars to pay debt, making a national debt grow even more. The dollar has lost half its value since the early 2000s, did I say inflation is up, and economy is not producing jobs that are creating value. The biggest problem is we have let our financial institutions fail by creating a system that allows excessive speculation which then skews the value of some assets. Personally, I am not selling my gold or silver at these levels.

 

Absolutely agree, the U.S. is printing money as fast as it can.

And where is the evidence of that? What I see is the Fed exchanging their holdings of Treasury Securities for the toxic waste held by the financial system under their alphabet soup of lending facilities. That certainly is not inflationary. M3 has also increased recently but that is at partially (if not entirely) due to companies rushing to borrow against bank credit lines before they are eliminated since the commercial paper market has collapsed.

[jtryka]

While you raise interesting points on the deflationary prospect of a real credit contraction, you don't address two points, the huge increase in governement spending (i.e. the half trillion fiscal deficit monetized by the Fed as the Treasury issues additional bonds/notes/bills) and the enormous current account deficit as the only thing we really export anymore is dollars. There may be some deflationary pressures domestically, but globally the dollar is inflating as much as ever if not more.

[physics-fan3.14]

World colonial, I agree with you 100% :thumbsup: A deflationary correction due to decreasing credit is definitely what we are seeing right now.

 

Now I happen to use a monetary definition of inflation and deflation while possibly everyone else on this board thinks in terms or price changes like the CPI. But the CPI and other price indices are the RESULT of the monetary aggregates and changes in collective psychology,

 

I couldn't agree more. I've been trying to spread the word about what inflation really is (increase in money supply), rather than what everyone thinks it is (the effects of inflation).

 

I think what we are seeing in the commodities - like silver and gold - was sparked by what we saw in oil: decreasing demand popped the speculators' bubble. They realized they couldn't sell it for more than they bought it for too much longer, just like any bubble. The selloff in oil has sparked a selloff in the wider commodities market, and has also led to a rally in the dollar.

[jtryka]

We can argue about deflation, (and I wholeheartedly agree with your definition of inflation by the way) but what we have here is not normal. If this was a popping of the bubble there should be sellers out the wazoo, but there are buyers lined up at $13, but where are the sellers? Are you selling? That is my whole point, there is a divergence between the physical market and the comex/paper market where everyone is quoting the dramatic fall in price. If you or anyone wants to sell for $12.70, bring it on, but it's just not happening. Kitco is out of phyisical, they're still taking orders with the caveat that delivery will be weeks out! And do you really think that the miners are gonna ramp up production at $12.70? I think this disconnect could end up creating a noticable shortage, one that the users of silver might actually notice, unlike the "collector" shortage that the masters of the universe on the comex have been able to hide fairly well.

 

Did you know that the mint has stopped selling gold eagles? Did you know they are OUT of proof silver eagles? And remember, even with silver at $18, proof silver eagles had a nice 90% premium built in, but there are NONE to be had, I tried to buy one today, and "Product is not available" and no, it's not the normal, product will ship on such and such date, it's just not available!

 

Deflation is legitimate, but I think you won't see it in broad prices like we had in the 1930s, it will be very focused, just like the rampant inflation we've had for the last 25 years. That inflation (in the money supply by your definition) had little impact on CPI, but flowed into asset bubbles, first in bonds in the early 90s, then stocks, then real estate. No one notices inflation in assets they own, only the ones they have to buy every week. The deflation may come to pass, but it will be in primarily assets like housing, and maybe certain sectors of the stock market, and certainly asset backed securities, commercial paper and the like. I think the developing world will have a far bigger long-term impact on the prices of metals, oil and other basic commodities. God help us if they stop recycling their surplus dollars into treasuries and start buying even more commodities to build their own infrastructure and consumer spending...

 

Ok, rant over.

[jackson64]

jeff...what I failed to mention also in my reference to the cost of a $1000 bag of Morgan/Peace dollars was that 6 months ago they were selling quite well at over $20,000...so a 30% drop and the fact that they are available at 30% less than they were 6 months ago is significant and not just paper (it could simply be their numismatic value that has kept them from dropping the 40% that silver bullion has)...your reference to the actual silver content was a good point--I only used them as reference because circulated silver dollars run pretty parallel to the silver ounce market..

 

with food prices rising, credit dropping, unemployment rising and many middle class Americans living paycheck to paycheck--I don't believe we've seen the bottom yet for gold and silver during this cyclic downturn...( just my opinion though--like 6 months ago a thread asked how high metals would go and I got blasted for predicting a large downturn)

 

PS: on the bright side--I paid $3.51 a gallon to fill my gas tank today .........

[jtryka]

Well, there is no bright side here since in the last week, gas has gone from $3.779 to $3.959, though I guess that's a little better than $4.199. Here is an excerpt from a commentary I received in an e-mail a couple hours ago, and I think it sums my point up:

 

"Twenty-eight years of brokering silver and gold have not prepared me for what I met this morning.

 

One of my wholesalers said he was not selling anything, only buying, until further notice.

 

Another refused to give any prices until he adjusted his spreads.

 

Another was spreading one-ounce gold coins, normally at $7-$8, at $25.

 

Another said he was making no sales for immediate delivery or deferred payment, only sales for 30 days' delivery paid at once.

 

Premiums were high: Austrian 100 Coronas, 4.7 percent; Sovereigns, 5.2 percent; Krugerrands, 6.8 percent; American Eagles, 8.2 percent (but none for immediate delivery); and Mexican 50 pesos, 4.5 percent.

 

Ninety-percent silver was at $9,783 a bag, a whopping 6.7 percent premium.

 

Silver American Eagles for 6-8 week delivery, a 23.7 percent premium.

 

But "premium" is only one way of looking at things, dividing the item's price by the spot silver price. Another way to view it is that physical prices have de-coupled from paper prices. The paper prices -- futures, ETFs, etc. -- no longer rule the market.

 

Physical prices are declaring their independence from paper pricing as those holding physical gold and silver refuse to sell it at prevailing paper prices. I have been expecting this to happen toward the top of the bull market, catalyzed by some paper purveyor's failure, but now? What can it mean?

 

At the very least, the public is nourishing a gigantic hunger for silver and gold in their hands, and no place else.

 

By now all the leveraged silver and gold longs have been forced out, just as all the dollar shorts have been chastened, bruised, and beaten away. Either this is the greatest silver and gold buying opportunity of all time, or the end of a bull market."

[Oldtrader3]

I see it as a buying opportunity. Weakening dollars and printing more money says silver and gold long for the present. The credit crunch and personal debt factor have taken a temporary toll on the precious metals but there still is a strong demand for industrial silver which can not be met by current inventory and mining of new supplies. This all makes me bullish, but then I am usually a contrarian in markets such as this one.

[gmarguli]

Then I thought, with prices down, I should buy a few bars since I have some extra cash, and guess what? None of the places online I looked at had any bars available in quantity!

 

So yes, silver (and gold) sold off today, but I doubt anyone was selling any real silver, just paper contracts on the comex since I couldn't find any physical silver available. Maybe in the headlines or at the hedge funds paying a lot for a piece of paper that promises silver is a good investment, but if I'm gonna shell out $10,000 for silver, I want it in 100-ounce bars, no paper required. And today, that just wasn't happening. The lesson here is that there is starting to be a significant disconnect between the paper market and the physical market, and even though the specs sold "silver" down to under $13 today, there doesn't seem to be much actual metal being sold at that price.

Kitco & Apmex have bars available. While I am sure a lot of dealers refused to sell at these lower prices, they will be forced to if these prices stick.Apmex also had quite a few SAE boxes available when I placed an order on Thursday evening and then they were sold later during the night. Then a couple more appeared the next day and later were gone. I don't believe they took them off the market, but rather these were actual sales.

[jtryka]

Apmex hedges all their inventory, so they almost never pull inventory due to price fluctuations.

[astrostu]

I'm hoping that the Mint will lower the prices for the two upcoming first spouse coins for later this year.