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 Replies: 7 / Views: 1,718 |
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Pillar of the Community
United States
5848 Posts |
Poll Question
So, I happened to be looking at the 10-year charts for silver and gold this morning:   And I was looking at the charts, I realized that there were two ways of looking at the data. The most obvious way was to see a gradual uptrend followed by a gradual downtrend, perhaps indicating an eventual return to historic lows. A more subtle interpretation, however, shows a repeating pattern of bumps, each one larger than the previous one and each one ending up higher than before. If that pattern holds true, than the end of this latest (albeit long) bump would result in prices going higher than their 2011 high in a relatively short time. I used to be in the latter camp, furiously buying silver and gold on the way down so as to be well-positioned before prices started to soar back again. Now, I'm pretty much in the former camp. I have no plans to sell my PMs, but I've stopped buying in any significant quantities. Of course, a third possibility is simply that looking at charts is completely useless as a guide to what PMs will do in the future. I suspect this is probably the best way to analyze the data. So... what do the charts say to you?
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Pillar of the Community
United States
3789 Posts |
I voted for the "past option".
Charts only tell us the past, not the future, therefore we can only use them for reference. What is most important is price action and what direction it takes us in the present and that direction is down. No doubt about it, silver and gold are in very strong downtrends that will play out on their own.
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Bedrock of the Community
13014 Posts |
I'm torn between the past repeating itself and doesn't apply to the future.
The past doesn't tell us what's coming tomorrow, but without some massive paradigm shift a long history of a price ceiling cannot be brushed off as insignificant. Especially when that same recently caused the same fall it did the previous time it was approached.
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Bedrock of the Community
Australia
21786 Posts |
I didn't vote. The reason for this is:
It depends on your investment horizon.
The trends for the last two years is 'down'.
The trends for the last ten years is 'up', approximately triple the start values.
If you are not an investor, but just an accumulator, and I suspect that there are many in the CCF like this, then it follows that you are a long term investor.
I do the same by collecting numismatic coins; I am not a bullion investor, but it follows that I must be a long term numismatic investor. If that is the case, two year trends are not going to bother you very much. It gives you a warm fuzzy feeling however, when the two year trend is on the way 'up'.
I do habitually cherry pick on price when I buy a coin, and potentially, I may have very large unrealized value gain on my hands. Three decades ago, I was buying ancient gold coins that are now three to five times their original purchase value. Their value seems to be somewhat related to the 50 year gold chart.
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Moderator
 Australia
16810 Posts |
I voted for option 3.
If the human race were logical, then the "blip" theory of option 2 would be axiomatic, because of the simple fact of increasing supply not being able to keep up with increasing demand. The rate of production of precious metals is only growing linearly at best; the population is still growing exponentially.
But to quote Dr Gillian Taylor from Star Trek IV: "Whoever said the human race was logical?". If you look at the 50 year chart instead of the 20 year chart, you will see that both option 1 and option 2 have occurred in the past. It is impossible to predict what the illogical humans will choose to do this time.
Don't say "infinitely" when you mean "very"; otherwise, you'll have no word left when you want to talk about something really infinite. - C. S. Lewis
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Pillar of the Community
United States
2543 Posts |
It says, silver and gold go up, silver and gold go down, silver and gold go up, silver and gold go down .......... Now let's write a 200 page blog or infomercial and guess what happens next .........  |
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Valued Member
Australia
208 Posts |
I am no expert, but one thing to note is that although gold and silver tend to trend the same way, silver is more volatile (sharper gain and losses) Since the GSR is high now as well, I think silver has really exciting upside potential. Could take a few years. That's OK, I love coins :-)
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Valued Member
United States
493 Posts |
The chart says we are in a bear market.
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Replies: 7 / Views: 1,718 |
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Posted 12/08/2013 3:16 pm
