Would You Still Buy Silver As An Investment At This Price?

Never a problem with disagreements, especially when backed up with reasoning.

It would be interesting to look at the ten-year prices from 1975-1984, five years on either side of the big silver peak. Anyone got their old redbooks handy?

The au/ag ratio is mostly a myth, held over from the days when the gubmint controlled the prices of both. In the open market, the ratio has bounced all over the place (see historic charts at kitco). They certainly don't move in lockstep, in any event.

The only correlation I've ever seen is that pt is generally worth more than au, but that's hardly a 100% certainty.

An excellent reason why numismatic values don't shoot up in lockstep with bullion value. Skyrocketing bullion value raises the cost of acquiring common date silver coins for a collection, causes more collections to be sold and less new collections to be started.

Any sort of (traditional) numismatic premium for many common Walking Liberty halves has been surpassed by their bullion value.

If there's one "worry" I have, it's that if silver stayed over $100/oz, some of my rarer silver coins (such as my VF-20 1938-D Walker) might not regain any sort of numismatic premium and may get "stuck" being worth only bullion value. Which would at least be a high bullion value by today's standards.

I paid $40 for the '38-D. If silver hit $110.60/Oz., the coin would be worth $40 in bullion value. Would it have any numismatic premium at that point? That, my CCF friends, is the pertinent question.

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The 1980 silver spike to $50/oz. wasn't even close to obliterating the numismatic premium for a 1938-D Walker, but two more years of steady silver increases could bring us to that level.

I agree with DNA, that is the basis of the ratio, say 16 oz of silver mined for every oz of gold eh....

The only thing that establishes this ratio are the amounts of both available in the Earth's crust. Both are desirable items, so their prices tend to be determined by their scarcity. Since gold is more scarce than silver, it is more highly valued. In time, that will change because silver is MUCH more useful than gold. Gold may be pretty but silver is genuinely useful in the manufacture of expensive and useful things.

As to the "truly free trading system"... are we sure that we have this? Market manipulation is not an unheard of event. Although there are a lot of factors involved in the prices of silver and gold, the price of silver is moving higher at a considerably faster rate than is the price of gold. Something else seems to be at work here, whatever it may be.

Which might be a reason for a 16:1 price ratio, but only if the two metals were 100% interchangeable for all uses, which they're not.

All you need do to see why this won't work is to compare the prices of any two coins, one with 16 times the mintage of the other. For example, the svdb vs 22d, or 09s vs 27d cents.

OK, so would you guys tell a guy who is on the fence about getting some silver to buy now when the price isn't sky high? Or should he hold off? Also, what types of silver should one buy, rounds like ASE's and Maple Leaves, or bars, or bags of junk silver?

Dave, I think more about teh abiality to sell what you have WHEN you need the cash...so, here in Mexico, that means the 1 oz libertad. You can walk into just about any bank and they'll buy it back from you...INSTANTLY at a fixed price. Doesn't mean that's all I have....but it's QUICK!