Precious Metals -

[mikew148]

Ok speculators,

 

There are no shortages of opinions on the topic and the opinions are all over the place, so.....

 

Where do you think the prices go from here on precious metals and why?

[AHFreak]

I am no expert, and I haven't ever really followed gold the way I follow/followed silver. My opinions/thoughts pertain to silver really, and that is all.

 

I have been saying for 2-3 years now that silver is heading DOWN to the Pre-run averages.... It makes sense to me that it makes its way down to the range that it traded at for 25 years or so, after the hunt bros. silver run in the 80's, and the crazy bull run in the late 00's.... Meaning that I expect silver to continue to make its way down to that 5-7 bucks an ounce range, and suspect it to bounce around in that range for as long as it might take for us to have another run....

 

To me, If the reason for the "run" was economic and because PM's were used as a safe haven for storing wealth, than why wouldn't it continue to drop down to pre-run levels with there being so many other places to put wealth and get better/safer returns right now? I see no reason it will change directions and start another bullish run with the economy doing as well as it is... I think the question to really be asking is, "how to identify the next crazy bull run"? That is what I would like to try to gain some insight on, what might cause PM's to go crazy again, and how can we identify it when it starts happening, versus once it has realized significant gains or whatever...

 

 

Good question, I look forward to other users and their thoughts/insight.

[RWB]

Quoting from a Great Sage: "Over time prices will go up and prices will go down."

 

Quoting from another Great Sage: "Over time prices will go up when there are more buyers than sellers, and prices will go down where there are more sellers than buyers."

 

Quoting from yet a Greater Sage: "Prices will go down just after your buy and they will go up just after you sell."

 

Quoting from the Greatest Sage: "Impossible to answer."

[World Colonial]

There hasn't been much asked or written about in the last 2+ years and its predictable given its 64% decline since the May 2011 peak near $50.

 

I was bearish prior to the 2008 bear market (correctly), bearish after it bottomed in late 2008 (incorrectly) and have been bearish since the 2011 peak (correctly). I am still bearish now for the intermediate but not longer term and like it a lot more at just under $18 than I did near $50 when so many loved it.

 

Short term, I think it is "oversold" as it broke the $18.19 support recently. I believe there is a good chance of a "spike" lower and then a rebound before it falls to even lower levels. I'm not sure that it will break the $8.39 low of October 2008 though (as I did before) since it has more than retraced 100% of the lift off phase to $50.

 

As for the economic background, I don't see that its run up had much to do with the "economic fundamentals" and I don't see that its decline does either. I certainly don't believe in the price manipulation claims and it should be apparent in retrospect that QE was irrelevant to its price because it peaked right at or near when QE II (or was it QE III?) was announced.

 

I own a little bit of it as a "hedge" (I own more gold value wise) and will be looking to buy more on any additonal substantial weakness. I don't beleive I or hardly anyone else will ever get rich off of it or make a windfall but it was a mistake to not buy more of it in 2008 and 2009.

[mikew148]

Quoting from a Great Sage: "Over time prices will go up and prices will go down."

 

Quoting from another Great Sage: "Over time prices will go up when there are more buyers than sellers, and prices will go down where there are more sellers than buyers."

 

Quoting from yet a Greater Sage: "Prices will go down just after your buy and they will go up just after you sell."

 

Quoting from the Greatest Sage: "Impossible to answer."

 

Yes, of course but, I'm asking for speculation.

 

I'm interested in hearing "why", in the world we live in today, one would believe the price is going to move - one way or the other. Politics, economy, supply and demand or any other reason you believe will have an effect on the price.

 

 

[World Colonial]

Yes, of course but, I'm asking for speculation.

 

I'm interested in hearing "why", in the world we live in today, one would believe the price is going to move - one way or the other. Politics, economy, supply and demand or any other reason you believe will have an effect on the price.

 

 

Psychology.

[BillJones]

There are no precise answers to this question. If there were, we would all run to futures markets and make our fortunes.

 

Having said that I would say if America is allowed develop her energy resources, and we are all allowed to enjoy the fruits of an abundant supply, the economy will get better and metal prices, especially for gold will level off or fall. If the radical Islamic fascists are kept under control, that will send gold prices in the same direction.

 

If politicians engage in hoaxes, scare tactics, regulation and higher taxes, more people will become pessimistic about the future and gold prices will rise. If the politicians chose to put band aids over Islamic fascism and believe that words and speeches by themselves will solve the problem, the totalitarian forces will get stronger.

 

I have some optimism when it comes to energy policies. I have no optimism when it comes to the outcome of our political system because I think the system is rigged and rife with voter fraud.

 

[RWB]

Ambassador Spock: Speculation without information is not logical.

[physics-fan3.14]

Quoting from a Great Sage: "Over time prices will go up and prices will go down."

 

Quoting from another Great Sage: "Over time prices will go up when there are more buyers than sellers, and prices will go down where there are more sellers than buyers."

 

Quoting from yet a Greater Sage: "Prices will go down just after your buy and they will go up just after you sell."

 

Quoting from the Greatest Sage: "Impossible to answer."

 

Yes, of course but, I'm asking for speculation.

 

I'm interested in hearing "why", in the world we live in today, one would believe the price is going to move - one way or the other. Politics, economy, supply and demand or any other reason you believe will have an effect on the price.

 

 

Someone builds a castle in the sky and convinces someone to buy it. The second person builds a bigger castle, and convinces someone else to buy it. The cycle repeats until people can't build bigger castles in the sky, and then they loose money.

[ComicConnoisseur]

Ok speculators,

 

There are no shortages of opinions on the topic and the opinions are all over the place, so.....

 

Where do you think the prices go from here on precious metals and why?

Down, especially Silver.

I think buying stocks long-term might be a better bet.

[RWB]

There is gold/silver forum on PCGS that will give you all the opinions you could wish for. (It was separated from the regular US coin messages because the PM folks tended to be obnoxious and intrusive - almost "religious" in their comments.)

[AHFreak]

There is gold/silver forum on PCGS that will give you all the opinions you could wish for. (It was separated from the regular US coin messages because the PM folks tended to be obnoxious and intrusive - almost "religious" in their comments.)

 

More so than the coin guys really? That surprises me!

[Nutmeg Coin]

Everything runs in cycles especially precious metals. Just look at the Forex chart with the dollar on a bull run: http://www.kitco.com/news/2014-09-22/JW_forexcharts.html

 

The Asians and many others around the globe continue to buy. This is having a major damper on the market in collectible coins.

[PerryHall]

There is gold/silver forum on PCGS that will give you all the opinions you could wish for. (It was separated from the regular US coin messages because the PM folks tended to be obnoxious and intrusive - almost "religious" in their comments.)

 

Not true. PM's were separated from the coin forum because too many coin collectors were complaining that the silver and gold posts were "off topic" and should be deleted.

[RWB]

True. There were those complaints, also. (I thought that was included in "obnoxious and intrusive" ....?)

[Mr. Smith Guesser]

Investors often fail to recognize that the primary use of gold is for jewelry. According to the World Gold Council, jewelry accounted for 58% of the world's gold demand in 2013. source: http://www.gold.org/supply-and-demand/gold-demand-trends

 

Many investors simply link the value of gold to the health of the general economy. But at least half of gold's value is dependent on the jewelry market.

 

Similarly, silver is always called a "precious metal". But if you look at where the demand for silver comes from, it really seems to be more of an "industrial metal" like copper. According to The Silver Institute, industrial fabrication accounted for 54% of the world's silver demand in 2013. source: https://www.silverinstitute.org/site/supply-demand/

 

Again, considering where the physical demand for the metal is actually coming from, at least half of silver's value is dependent on industrial fabrication(mainly electronics).

 

My point is, investors often believe that the value of precious metals will intrinsically increase in value in the face of a slower economy. However, a slower economy would also mean a drop in the demand for jewelry and production from industrial fabrication, which is a huge chuck of precious metal demand.

 

I believe that a significant part of the spike in precious metal prices over the past several years can be chalked up this misunderstanding.

 

........

 

Last thing...Please also remember to consider that the value of anything is conditional. If you were lost in the desert, without food or water, which would have more value to you: a gold bar or a gallon of water?

[World Colonial]

Down, especially Silver.

I think buying stocks long-term might be a better bet.

 

The sentiments you expressed I believe are typical of the opinions of most. Silver has lost about 64% of its value since the April, 2011 peak near $50 while stocks have risen some percentage which escapes my memory.

 

By my reckoning, there is a massive financial bubble in place right now, for the third time in just over 15 years. I don't believe any asset class is "cheap" though in equities there are some that are much cheaper than others. This bubble I consider the greatest ever in the history of civilization. It is global and its driven by the largest bubble of them all, in credit and debt.

 

In the stock market, metrics such as the P/E ratio can look "reasonable" because artificially cheap and easy money has reduced the cost of borrowing for all issuers, even "high yield" which in the recent past has been at record low interest rates. This has directly increased earnings. Corporations have also borrowed money (at a $600B annual run rate the last time I checked) which they have used to buy back shares to increase the EPS. For US corporations, the decline in the USD until recently has boosted reported earnings which is significant for the largest companies such as many or most in the S&P 500.

 

Another way artificially cheap money has inflated the stock market is by enabling scores of million to buy all kinds of gadgets and toys that they don't actually need and cannot afford.

 

The typical consumer in the US is actually flat broke and I don't see any reason to believe this isn't true at least in most developed economies. The recently issued 2013 Federal Reserve Survey of Consumer Finances reported a medium net worth of a paltry $54,000. Inflation adjusted median income is LOWER today than it was in both 2007 (prior to the Great Recession) and 2000. This not even considering that the CPI understates actual price increases which I know many here also believe. I will be the first to admit that I have underestimated how long this global financial ponzi scheme has been able to last, but it isn't going to change the ultimate outcome, regardless of how long it takes. As i have written here many times, I expect most Americans (and many from elsewhere) to become poorer or a lot poorer over the indefinite future.

[mikew148]

Thanks for the opinions.

 

Any thoughts on the possibility of China pursuing gold for these interests?

 

http://resourceinvestingnews.com/67406-us-dollar-gold-goodman-currency-russia.html

[19Lyds]

Anymore, precious metals are more of commodities than anything else with an abundance of that commodity being used as a cash cow by most major Industrialized Countries.

 

There was a time when silver, gold and platinum were widely used in electronics yet had limited supplies due to costs in extracting these metals.

 

Those days are long gone as millions of ounces are being extracted annually.

 

I expect that the supply vs demand ration's will kick in once it becomes less profitable to mine these products and then yet another artificial shortage will grow and prices will rise.

 

But what the hell do I know other than the current PM market is very reminiscent of the 2008 stocks collapse. Prices go up by a buck on Monday then drop down by 2 bucks on Tuesday. Go up a buck on Wednesday then drop by 3 bucks on Thursday.

 

The downturn has been painful to watch.

 

Pretty soon, the profiteers will move onto something else and some sense of stability will be achieved.

[World Colonial]

Thanks for the opinions.

 

Any thoughts on the possibility of China pursuing gold for these interests?

 

http://resourceinvestingnews.com/67406-us-dollar-gold-goodman-currency-russia.html

 

I was too lazy to read the article but know what its getting at. Its supposedly the Chinese plot to have the Yuan replace the USD as the reserve currency.

 

If this is your question to me, I consider it unsubstantiated nonsense. Before it becomes the reserve currency, it has to be freely convertible and traded which it isn't. To be the reserve currency, China will likely need to run persistent current account deficits so that there is enough Yuan available elsewhere to replace the USD in central bank FX reserves. I don't see that happening any time soon.

 

I also don't believe they want to issue a gold backed currency and I don't believe it would work anyway because the same (neo) Keynesian and Monetarist ideology exists there just as it does in the US. These policies would lead to the same problem the US ran into which resulted in President Nixon closing the "gold window" in 1971.

 

I don't believe most people know it, but China's economy isn't exactly in the great shape most believe it to be and it has many issues which are just as bad as those in the US. Reportedly, total debt has increased to 24T from 9T since 2008 or 2009. Their debt is still lower than the US in nominal terms but as a percentage of the economy, not really and the rate of increase has been much higher. Much of their "growth" is actually massive malinvestment which will ultimately make them far poorer in the future. The chances of their financial system imploding I see as equally likely as in the US, EU or Japan.