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 Replies: 48 / Views: 5,535 |
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Bedrock of the Community
13014 Posts |
Quote:
Is it not inevitable that prices will rise? Not necessarily. We have 2000 plus years of it being mined available and a significant amount gets melted and recycled into other things. Weve even started recovering the old industrial metal when electronics are recycled. Industrial use would have to pick up very significantly to even approach a problem. Plus industrial metals arent for ever. Eventually they get replaced by something new and better. It wouldnt be the first metal to be replaced as technology changes Quote:
Considering there is less than 1 ounce of gold per person on the planet perhaps the question would be how could it function as money. The truth is PMs couldnt function as money anymore. Theres to much money in the world to convert it all and too many people. The amount you would be putting into money would be insignificant enough that it wouldnt matter. Edited by basebal21
06/27/2013 12:58 am
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Pillar of the Community
United States
5862 Posts |
Just saw gold briefly dip below $1200...
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Valued Member
United Kingdom
90 Posts |
It can go as low as It likes, what will increase for physical gold of course would be the premium on top, at multiple levels. Not just the end store adding a premium, but the mining companies putting their own premiums if it got soo low that even the most efficient mines couldn't deliver to spot. Then in a sense.,the actual spot price would lose its meaning, it would only mean a price for paper, creating a total disconnect,
..but lets see what happens, if it'll really go THAT low.
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Pillar of the Community
United States
1454 Posts |
It seems that mines were running efficiently enough to be profitable when silver was $5. Granted, gasoline prices are much higher now. Does anyone really know how little spot value a PM like silver would have to have before it became unproductive to extract it?
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Pillar of the Community
Canada
3692 Posts |
@ travein: The price doesn't always reflect what the miners have to say. If you have a product, great, but you still have to move it - distribute it. And refiners always get some say in the matter. If we stopped mining metals tomorrow, I think IMO that the prices would not be affected. I think it lies in distribution and refining.
I think that the physical market prices are still high because vendors don't want to lose money from the higher price they bought it at before. There might be panic selling of the physical nearby because they don't want to lose their shirts in the process.
^^^Opinion only from what I have observed.
It's kind of inhuman to put a value of gold based on how many people there are in the world. If you start pricing gold in units of persons instead of dollars, I think that's just immoral. What do you think if there's a population boom? Or a genocide that would affect the price of gold? This kind of thinking is extremely dangerous and should not be toyed with.
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Bedrock of the Community
13014 Posts |
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Does anyone really know how little spot value a PM like silver would have to have before it became unproductive to extract it? Theres no single answer to that question. Some of its easy to get some of its harder and each mine will have its own bottom line for how much effort needs to be put into to get the silver out. Some companies are more efficient than others as well and will have different costs. Of course that part doesn't really matter because if one company cant figure it out another will. Small companies may not be able to figure it out but the larger ones did fine with 4-5 dollar silver for many years so it has to be below that. |
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Pillar of the Community
United States
808 Posts |
Is it possible that the silver spot is simply falling in response to gold's precipitous price decline? I get the whole China bank liquidity crisis driving the gold price down. However, what has changed so dramatically about silver? Meaning that if we're seeing primarily a sympathetic response in silver's price fall, it stands to reason that silver could recover VERY quickly once the drama has subsided. Thoughts?
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Bedrock of the Community
13014 Posts |
Coin your assuming though thats its true value is in the 30s and its somehow down from where it should be. If we look at the historical charts we see those prices are the exception to the rule and the true value lies below 10 dollars. Its more like a pump and dump stock that sits at 5 dollars then shoots up and falls then it is a solid company sitting in the 30s that hit a rough patch and lost half its value.
For a recovery well need economic uncertainty to return that pours money into safe havens
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Pillar of the Community
United Kingdom
548 Posts |
Gold and Silver only did well because of fears over high inflation. However, high inflation never quite materialised and now the Federal Reserve is easing back on money printing I can see further falls in the price.
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Pillar of the Community
United States
5862 Posts |
Keep in mind also that PMs are not a commodity like oil that disappears forever once it is used. Regardless of how much it costs to mine, there is a huge existing supply of gold and silver that can continue to be traded back and forth ad infinitem.
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Valued Member
United States
75 Posts |
If you look at historical data, silver should come down to around $6 an ounce as the economy recovers. A dollar isn't worth what it was 20, 30, or 40 years ago, which is something people forget when they do these analogies. However, I suspect it will not go quite that low, because this crash was so dramatic I believe a certain percentage of people are going to be paranoid for the rest of their years.
Following previous crashes of greater and lesser severity, people have become paranoid and taken to hoarding cash in their homes, buying PMs, etc.
Another thing to consider is that there is at least one company out there that is planning to mine asteroids as we speak. And I don't mean 50 years from now. They have the plans and the funding to do it. Why does this matter? Well, because even one tiny asteroid can be packed with trillions of dollars worth of PMs. If they succeed, expect PM prices to absolutely plummet on increased supply.
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Pillar of the Community
United States
1454 Posts |
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Well, because even one tiny asteroid can be packed with trillions of dollars worth of PMs. If they succeed, expect PM prices to absolutely plummet on increased supply. Wouldn't it make more sense for them to take a page from the diamond cartels and parse out this new wealth of minerals slowly and methodically over time, as to not crash the PM price and diminish the value of their product? |
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Pillar of the Community
Japan
666 Posts |
If you look at historical data, silver should come down to around $6 an ounce as the economy recovers. >>>
do you count historical data on wages, energy, debt, etc like with silver?
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Valued Member
United States
75 Posts |
I am not saying they would dump all of their product onto the market at once. I am saying that the demand will be stunted a bit as a viable new way of obtaining precious metals is proven.
As far as the historical data comment, I am just making an observation... people keep saying that the price of silver was $4 an ounce for a long time, but if you look at the charts it was more in the $5 range before the whole crash occurred and most economic indicators (minimum wage, energy costs, etc) have come up a bit since then. I think $6 an ounce is a realistic price for silver if the economy fully recovered and people stopped being paranoid.
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Pillar of the Community
United States
808 Posts |
Seems like the economic viability of asteroid mining may have been predicated on an ever rising precious metals price. Given PM's recent brutal correction, I suspect the accountants and bean counters are not nearly as enthusiastic to back this particular space venture.
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Replies: 48 / Views: 5,535 |
First Page
Posted 06/27/2013 4:38 pm
