Quote: People who run business would easily sell at a 5% markup knowing they can restock and sell again and again at a 5% markup. Who wants inventory risk or hedging expense. If you are in the business of selling you are concerned with volume and turnover not investing in the metals themselves.
Of course they would and they do. Companies the sell PM's make money on their markup and the spread between their buy and sell rates. That is normal business but not what I'm talking about. I'm talking about sites that post all the BS stories about $100 silver, $5000 gold and how the rich and powerful are secretly selling all their stocks and buying gold. If those places really believed their own line of BS they would be buying every ounce they could get their hands on. After all, they are selling PM's to the public as a sure bet so no need to worry about inventory costs or hedging.
Quote: . None of this analysis is actually describing the activity on the ground for buyers of physical or paper gold, silver.
I wish I would have seen this before my first reply but we posted at the same time.
How is the paper market price action not a reflection of what were "seeing on the ground"?
What is this supposed disconnect with physical metals as well? Gold and silver are everywhere. I can walk into any shop or go on any site and order as much as I possibly want. If it wasnt for the ETFs buying the stuff up as investments the price would likely be half of what it is now if not all the way back to its early 2000 levels.
Ok lets look at the price action today going to our proxies
GLD- lower high, higher low, still inside the gap
SLV- lower high, lower low, still inside the gap
Question is at this stage- do they both maintain their moves inside the gap? Are we going to see just a narrow range? Very early to tell. It is interesting to note tho, that they still are both above the gap from 6/26. filling this gap and staying above it would go towards some sort floor starting to appear, but keep in mind it still doesn't give an all clear.
Remember, its possible to fill some of these gaps and then just chop for a while with nothing else. This could go on for months. At this point its just too early to tell. Again, what we do know is that gold and silver are still stuck in a major downtrend. I have seen many assets where they first fill some small gaps, rise above them, chop around in a range for many many many months, only to later start a slow grind back down.
Therefore everyone should prepare that this could go on for a long time before we get a resolution. I know I sound like I repeat a lot, but really, patience and time are two very important elements. They will be needed and helpful in determining what happens in the short, medium and long term.
I want to add another note here briefly about the big impact thats being felt in commodities besides gold and silver. All the industrial metals are in bad shape price wise. The vast majority of global miners, besides the gold and silver miners, such as those engaged in other metals such as tin, nickel, copper, are all showing signs of a drop in use of these metals due to oversupply. So what is happening with gold and silver is not an isolated incident. Commodities over all, sans a few, are trapped in big downtrends and breaking down.
Not only that, but key commodity currencies are reflecting the problems with the commodity markets. The Canadian and Australian currencies have for months and weeks been exhibiting weakness.
All these things add up to the challenges that face gold and silver, even if not indirectly, by the fact that they are commodities in the end, will drag them down.
Yes the CAD and the AUD are really having trouble going forward, but again they are just getting repriced by the market going forward.
Granted these are side issues to gold and silver but you can see how gold and silver will have to work through all these issues because all commodities are weaved together at certain points and even the currencies affect them.
For these reasons, everyone going forward needs to be careful how much they buy, what they buy and perhaps not buying at all for now if one can resist the urge.
As I have repeated and others have stated, your best option now is to buy high quality coins with numismatic value
chris12018, I have no interest in talking about my opinions on precious metal. That is exactly the problem, this is all speculative, subjective, and overblown. Gold and silver are dipping for two distinct, but related reasons. None of this gap, GLD, SLV stuff is of any use to 99.99 of the people on this site, and almost that many of the forums readers. As I said, owning a hammer doesn't make you a carpenter.
Admittedly, my problem is less with Yup, and more with the way CC doesn't allow you to delete threads from your "recent topics" screen.
As for my opinion on PM, if you must know, I think the bottom is going to be deep for the next 10-15 years, but that the highs will be consistent with recent history, IE, that the investment will be fine for patient folks with money to sit on. I think Silver is to be avoided right now, as is platinum, but that gold and palladium are fine. Palladium, in particular, is a nice dark horse that seems to be ignoring the recent crashes. This indicates a more complicated market which is not as weak to speculation.
Bottom line, Yup's recommendation to stick with numismatic PM for now is sound. I came to the exact same conclusion myself, and sold off everything I had that wasn't a J&M vintage bar, Krugerrand, or Maple. I was lucky enough to get $30/oz for my silver. For those that cannot afford to wait until the fall to see if prices rebound significantly, I recommend selling off all generic rounds and un-serialized bars asap, even if at a loss. The traditional price increase from the Christmas season will provide a nice opportunity to sell, particularly for bone-picking flippers not afraid to buy a potentially dissolving asset.
I would say Anj is wrong in regards to his first paragraph. This thread and the manner I am presenting silver and gold as they progress is NOT based on mere speculation nor is this subjective.
Why can I say that with all certainty? Because I am not putting my opinion on gold and silver, I am listening to the price action, to the volume. Price and volume are not open to speculation nor subjective, they are the truth.
If there is to be serious buying and change in trend, it will be validated by volume which represents serious strong buyers who in turn by their purchases makes the price increase, we will see accumulation.
I am sorry but NO ONE is secretly accumulated gold and silver on the sly right now and the price is not going to all of a sudden burst into the stratosphere WITHOUT traders knowing about it.
Finally, as I have said it before, I don't think its fair nor kind to discount the capabilities of the many folks who belong to this community and have a yearning to learn more how markets work beyond gold and silver coin buying. I really think that, as this site very well promotes, the more you know, the more you share, the more you will advance in coin collecting, this also applies to gold and silver prices. While perhaps some folks may get lost, there will be others where something may click and they will understand the key metrics to commodities, 2 of which are price action and volume.
I like your name there, wish I could change mine to like SomaliaElephantFAN now or something like that lol
In any case, no one really knows EXACTLY who's doing what, when and how much of. Sure there's the COT but that info is delayed when its released and doesn't necessarily mean that the positioning reported there determines all the outcomes.
Therefore, as I always say, price action tells us what we really need to know. What price is saying now is that silver and gold are in a very strong downtrend, there are no buyers at this time that can change the trend from its current direction and being that gold and silver are in downtrends, the correct positioning until the facts change is that silver and gold should be sold, IE, sold short.
Notice yesterday that the ECB stood pat with their interest rates. They even communicated that rates would stay the same or lower for extended period of time.
The reaction from the gold and silver markets? Muted with selling in overnight futures.
Takeaway- anyone who continues to say that QE,lower interests or devalued world currencies will bring about higher gold prices or higher silver prices is dead wrong and the market is saying so. Clearly, the markets don't see much lower interest rates or money printing doing much to help the prices of gold and silver to increase at this point. BTW, look at the aussie dollar, japanese yen and canadian dollar to back this point up. These are facts.
Keep ECB's action from this morning on your calender.
At the risk of getting some flack from fellow members for posting this, some of the info in the clip talks directly to allot of comments posted here in yup's thread. The first 8 min talks about the Japanese banking system and derivatives but then dives in to gold and after with J.Rogers who volunteers that gold might go lower before going back up.
Quote: In response to silverwolf's question, "is it true that the Big 3, have closed out their short positions in Silver?" yup7676 wrote in part:
"Therefore, as I always say, price action tells us what we really need to know. What price is saying now is that silver and gold are in a very strong downtrend, there are no buyers at this time that can change the trend from its current direction and being that gold and silver are in downtrends, the correct positioning until the facts change is that silver and gold should be sold, IE, sold short."
I don't want to labor the point, but I suspect that at least a few long time PM buyers here on CCF were indeed curious as to what the major shorts were doing in this price decline given their vastly precarious exposure during silver's most recent run up. So, yes, while the current price action may indeed support short positions taken recently in response to PM's precipitous price decline, some here (I suspect) are curious to see if some well known banks are taking advantage of this same price decline to close out large short positions that were seemingly untenable just a few months ago. Any thoughts on the subject?
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Posted 07/02/2013 2:08 pm
