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 Replies: 5 / Views: 1,792 |
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Pillar of the Community
Canada
1700 Posts |
Hello all, I understand that this might not be the first thread. I just wanted to write a new one so that my list of questions can be responded to. I don't visit this part of the forum very often, but since silver has been falling hard, I feel like I really want to learn more about it. 1. I know that silver's trend follows gold very closely. When gold fell last year, I heard about various factors influencing its price, including some tax in India. I also read on a post in another thread here that silver fell down to $16 in the past week because of some US federal reserve issue. Could someone please elaborate on how those issues may affect the price of gold and silver, and add in a few other issues that may affect the prices of those metals? 2. Since I don't know much about the possible answers to the question above, I wouldn't know about the cycle of gold/silver prices. I've seen posts of people speculating on this forum, saying that gold might even go down to as far as $800. But isn't it also possible, looking at the general trend, that the price might also have a chance to rebound to $20 or more? Or is that not too likely given some of the current events? 3. This is more related to coin collecting of NCLT. US Mint adjusts the ATB 5 oz UNC coin according to silver spot. But RCM doesn't really. My question is, for a popular RCM coin that has already gone up in trend because of higher than normal demands (e.g. The 2013 spring canopy, a few of the superman, etc.), would their prices fall just because silver is not doing so well? Or would people continue to pay above the price of issue just because of the good designs? Please redirect me to existing posts and topics if necessary. I am really less than a beginner in examining silver and gold. Please help educate me! Any criticism would be appreciated. |
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Bedrock of the Community
Australia
21786 Posts |
As sugested, there are many factors that affect bullion prices.
The problem is not knowing when, and what extent, each of them will actually affect bullion prices.
It's a bit like predicting the weather in detail a month in advance. Most folks just take a long term view, and use bullion to store only a minor part of their wealth.
NCLT is perhaps is a good way to go, because it also includes some numismatic interest as well.
Nevertheless, you still have to buy well, and sell well. in this regard, some people are motivated to buy or sell when there is a significant variance to a price trend line that is in accordance with their investment horizon. That price trend line may be based on a monthy forward view, or a decade long forward view.
'Dyed in the wool' coin collectors have little regard for an investment driven forward view, but they do at least, try to buy well most of the time.
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Pillar of the Community
Canada
3049 Posts |
Quote:
1. I know that silver's trend follows gold very closely. It does and it doesn't... think of silver as the emotionally unstable, chemically altered, manic depressive little cousin.. While the two are PM's two years ago when silver took a huge dive.. gold didn't drop in % nearly 1/2 as much... Gold is definetly linked to many world economies... silver not so much. Quote:
Could someone please elaborate on how those issues may affect the price of gold and silver, and add in a few other issues that may affect the prices of those metals? PM's are basically a hedge against inflation.... what 1 oz of gold bought you 200 yrs ago is pretty close to what 1 oz of gold would buy today... Once the dollar went off the gold standard, governments take on debt knowing that as they print more money... their dollar depreciates but in turn that means their debt load is also less significant. PM's act almost in opposite of the stock market... if markets are doing well smart money will invest in the markets. If markets look like they're going to take a plunge then the smart money starts to go into PM's as they are a LOT more stable. Quote:
I wouldn't know about the cycle of gold/silver prices. I've seen posts of people speculating on this forum Take a look at some historical charts and you will see some some patterns... and while history does tend to repeat itself.. I NEVER will use a chart to determine price point.. charts merely show what has happened in the past. And while some people may speculate on what the price of silver/gold or pig knuckles may be in the future... I would only listen with a grain of enthusiasm and a pound of skeptisim... the best indicators of what the market will do.. is the market itself... you want to be in the silver/gold market.. know silver and gold... track it.. understand it's history... and figure out what could would or should have some influence in said commodity.. I would say that while I love buying gold and silver personally.. the "money" to be made over any long term is through the GSR swap... sure buy at high points sell at lower points that's a no brainer.. and with silver there will be a lot more up and down swings... but SWAPS are basically a way of getting free metal.... My best answer for #3 is as follows: When you're buying gold or silver you're buying a hunk of metal... don't get hung up on what picture or image they stamp onto it... as long as it's .9999 it's all the same... different governements will issue different bullion at different price point relative to spot price. The RCM has always stated that their coins will be above spot price as you are getting a recognized piece that has artwork and beauty etc. etc. etc... but 15 -20 years later... those coins will generally be considered bullion issues...I really believe the ONLY coins gold or silver that have numismatic values that will part themselves from spot prices over a long period of time is goverenment issued coins for currency... junk silver - soverigns.. The superman coin that you mentioned.. yes it has had a pretty good mark up in price in the short term... but I call this the beanie baby phenomenon... right now people will think it's cool.. 10 years from now.... it's just another gold coin... with a whole lot less history ... So you have to ask yourself... are you wanting to be into PM's and if so what are your reasons... if you're wanting to make some fast money... ride out the beanie baby waves as you see them.... buy the hot silver rounds at a discount like the pandas and the turtles and what ever else is out there... and flip it... If you're looking just to play things conservative... buy what you can... that is quality at the lowest price point or at certain time intervals... and in the long run you may end up happy with how your money is into something that has value and seen as a form of currency all over the world.... Cheers... good luck.. sorry I wrote a whole bunch.... hope you found some of it valuable. |
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Pillar of the Community
 Canada
1700 Posts |
AgCoinAu,
There's so much to learn, and I'm expecting a lot more from researching the history of gold and silver...
Thank you for writing so many details! I can certainly grasp your point about the mint products. I would certainly agree, because the Montreal Olympic Coins go up in price for a while and stay stable for another long period of time, unless silver goes above $100/oz, which I wouldn't expect soon.
It's interesting how you call silver the emotionally stable. I guess that's kind of a similar but yet very different saying to the statement "silver is a poor man's gold"?
Edited by Petersun
11/01/2014 10:50 am
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Pillar of the Community
United States
3789 Posts |
The only thing I will add here is-
keep it simple. Dont over think things. The best thing to follow is the price action. What is it doing now? thats the key to knowing whats happening.
Other factors really mean NOTHING. As an example, everyone was saying "oh the Ukraine situation will drive up prices". Well clearly it didnt.
as we say, price never lies.
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Pillar of the Community
Canada
3692 Posts |
Spot price has less to do with NCLT and finished products than bullion itself. You have to factor in the time and energy the mints invest into refining their stock, rolling their gold flat, punching the blanks, de-rimming the rounds, designing the dies then having them made and replaced, marketing, shipping and handling, customer service, accounting, and security, just to name a few things... All of this takes energy and manpower to produce. The market or collectors decide if a particular piece sells out or not. The ones that don't sell have to be refined back into stock and they try again, taking up energy and manpower once again. All of these factors are considered in the markup and then in the profits they need to acquire to make a design viable in the marketplace.
People argue about high mintages, but pieces are cheaper to produce if you make more than "one" at a time. A piece has to be thought out way in advance and the mints would be gambling hard if they think one piece will sell better than another, especially if the piece has unique features like holograms, bimetallic features and the list goes on. Basically businesses have to create a product and use marketing to upsell it, unless the piece is made to order (custom work/one of a kind). So you get cheaper coins if the mintage is high, and mints take a huge risk in believing that a low mintage product "has to" sell, so they base those on past experience and what customers ask for. The quality also must be high or you're paying the mint a good "tip" for no reason at all.
The long-term price of NCLT has to be lasting. The design has to appeal to collectors 20, 50+ down the road because you need that next collector to repay the cost it took to make the coin, otherwise it's reduced to the sum of its parts, i.e. melt value minus the refiner's fee and dealer's fee.
The whole 5-ounce collectors coins, to me, and this is my opinion only, a backwards investment, but a brilliant marketing scheme for world mints. You could achieve the same exact diameter of the coin (canvas) and retain the artistry if the mints would only shorten the thickness of the coin. Basically I'm saying that you don't need exactly 5 ounces of silver to display the grandeur of the portrayed vista (excluding coins that have an ultra-high relief). They have the perceived value of being 5 ounce investments with pretty scenarios, but they are selling you a high priced metal to play with your perceptions.
All said and done, the reason circulation coins (also includes test tokens, "proof" samples) do so well in the long-term is that they are a part of history. NCLT seem to depict history, not embody it. It's like a rap song that references another rap song or samples a loop from another. Circulation coins would say 1912, but modern coins will say 1912-2012. NCLT are not real coins that circulate in the same way, hence why banks don't accept them.
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Posted 11/01/2014 02:19 am
