Pm Trends During Recessions And Recovery Years?

Yeah what I'm saying it seems to be repetitive. I'm not referring to if PM retains it's value comparing before and after rescission. But that it seems post World War 2 we generally have a recession every 5 years or so and that we are over due. It seems that during the middle of a recession silver is generally at a low point. Post recession and during the first few years of recovery years silver's value is greater than what it was during a recession. It seems the greater the recession the lower it goes during the recession and the greater the jump during recovery years. Supposedly 2008-2009 was one of the worst recessions we have seen in some time and it seems the value of silver dropped really low during it only to shoot up during recovery year periods.

When the next recession happens I think it may be worst than 2008-2009 and if it is we may see something similar happening again. But even if it's not so bad I think the trend will continue bottom out during middle of a recession. Increase during first few years of recovery, downwards trend until the next recession.

But why during a recession is PM at it's lowest value? I know some people like to hoard PM in advanced before recessions because they believe it will go up in value when to me it seems like people should hoard not before a recession but during it and wait for the recovery years to cash out.

I don't know it just seems like a rabbit market and just static noise at the moment with a general negative trend before the next recession were it may bottom out again only to jump yet again during recovery years. Now may not be the best time to buy a large amount with the next recession coming. I think it's not a matter of if the next recession will come but when. With all the debt we have occurred since 2008-2009 I fear the next recession will be worse.

I just don't understand why PM drops during the middle of a recession ?

It's a two way street. At good times when people have money to spend, prices go up as they have free cash. This in general lead to inflation. Also note that as precious metal prices are quoted in US dollars, this does not necessarily reflect the overall global trend. I am not an economist hence unable to make a definite correlation between low PM prices and recession.

When you look at the supply side, when times are good - mining operation costs go up. This is also one of the only few opportunities for mining operations to process lower grade ores which may have been uneconomical at one stage. When times get tough, they can continue to stockpile lower grade ores and process higher grade. Operation cost still remains the same but the volume differs. Because investors expect dividends even when times are tough, companies must perform at whatever it must take, whether it leads to fiercer competition or they might as well pack up and go (obviously not a desirable option). A good example is oil prices - a huge influx of oil is still continuing to flood the market and a few companies, if not countries are complaining that it's getting too low. But in order to service debts or obligations, one cannot just shut down production. A huge influx of supply, stagnant demand all lead to lower prices.

Also think about this - when times are really tough, can you eat a gold bar or drink a barrel of oil and survive?