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 Replies: 24 / Views: 4,117 |
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Rest in Peace
United States
9104 Posts |
An old wives tale says that au should be worth 16 times as much as ag, because ag is 16 times as plentiful. If you believe such nonsense, you better be dumping both ag and au. Consider this: Quote: If you think gold is rare, think about platinum for a minute. You could fit all the platinum ever mined into a racquetball court. The stuff is 30 times rarer than gold in nature. And it's a real headache to mine. It takes 12 million tons of raw ore to produce a single ounce of this metal. Using natural rarity, pt should be about $45,000 an ounce, instead of $1800. Not only is pt far rarer than au, it is primarily an industrial metal, and can do things that are impossible to do with gold. For example, it barely turns color at temperatures that make gold a puddle. |
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Pillar of the Community
United States
648 Posts |
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Pillar of the Community
United States
3540 Posts |
It is called supply and demand.
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Pillar of the Community
United States
3592 Posts |
The price of gold vs silver isn't 1:16 anyway,why debunk something that doesn't matter ?
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Bedrock of the Community
United States
10038 Posts |
I am Just asking for opinions sake...
I can see the obvious logic in what you present here about platinum. But I have to wonder if the 16:1 ratio might actually have more relevance due to the overall perception of what a "precious metal" is.
I think there are a lot of people out there whose only exposure to platinum was on a high school quiz over the symbols for elements. I am not sure there a majority of people out there associate platinum with a precious metal. After all, Burl Ives used to sing, "Silver and Gold... ," not, "Silver, Gold, and Platinum." Hence mass ignorance might not produce as much interest in the metal as its inherent value would dictate. So the true ratios go out the window and are hard to relate to the more common PM s.
Again, this is not a post opposing what you are saying, just wondering if there might be any merit in this proposed line of thought? I admit I am a newb when it comes to PM investment.
I admit that until just this last year, I did not realize that palladium was also part of the precious metals market enough to be used for coinage. I will have to google around awhile to see what its true rarity is. I think the Canadian mint, now making palladium coins, will raise awareness of this metal to more people. I also saw PM sites saying it would not be best to get into this metal though b/c palladium is still harder to cash in for its value b/c not a lot of people recognize it for what it is.
How much squash could a Sasquatch squash if a Sasquatch would squash squash? Download and read: Grading the graders Costly TPG ineptitude and No FG Kennedy halveshttps://ln5.sync.com/dl/7ca91bdd0/w...i3b-rbj9fir2 |
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Pillar of the Community
United States
2734 Posts |
The "old wives tale" is the approximate ratio of silver to gold that comes out of the ground, and "16 to 1" was used as a value standard for centuries. That said, supply and demand is the true arbiter of value. Platinum's industrial uses alone (ie: catalytic converters) would argue for a higher true value. (unless silver catalytic converters ever catch on...  ) |
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Valued Member
United States
384 Posts |
If you want to know the ratios that should be, based purely on the amount of total metal present on earth check out the wikipedia page on PMs. The table of world prices, as the numbers in the first column: http://en.wikipedia.org/wiki/Precious_metalNow other factors like mining difficulty, or public perception, and how they should affect the prices are for you all to debate.  |
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Bedrock of the Community
Australia
21788 Posts |
Gold is the 19th most abundant element in the Earth's crust.
About 22,000 tonnes if new silver is mined annually, and about 2,500 tonnes of new gold is mined annually.
Neither of these facts have any relationship to the current prices of those metals.
The typical historic gold to silver price ratio also has nothing to do with current prices. Recent price histories of these metals prove that.
Like everything else, the market prices are a reflection of current supply and demand, and even then do not reflect the 'true' prices of those metals, whatever those may be. Even the experts cannot tell you that, nor I suspect, are they particularly bothered.
It is up to every investor to make his own call, based on whatever information he thinks is most valid to him. That is why there are so many different opinions expressed on this subject.
Edited by sel_69l
05/14/2011 9:54 pm
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New Member
United States
8 Posts |
sel_69l said Quote:
Like everything else, the market prices are a reflection of current supply and demand, and even then do not reflect the 'true' prices of those metals The price gets no more true, than the market prices. Like you said the market represents supply and demand. The demand part of "supply and demand" is the true price of anything. Without a demand there is no value, and if you dont go by the market prices you would be merely guessing at a price. Therefore the Market price is the TRUE price. Or am I totally missing something? |
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Rest in Peace
 United States
9104 Posts |
Quote:
After all, Burl Ives used to sing, "Silver and Gold... ," not, "Silver, Gold, and Platinum." Curiously, when that song came out, platinum was a very popular metal for jewelry. And speaking of Christmas lyrics, how about "I need...a deed...to a platinum mine" from "Santa Baby", circa 1953? |
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Pillar of the Community
United States
3670 Posts |
I think the important thing is silver is gonna continue to rise in value over time regardless of the ratio....
The racquetball court makes me think owning some is not a bad idea....
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Bedrock of the Community
Australia
21788 Posts |
Silvrcrazy: In the most obvious sense, you are quite correct.
You have to buy or sell at the price of the market, no matter what.
I believe there is a thing called 'mob mentality' which financial advisors and market commentators call "market sentiment". This psychological factor has the ability to distort supply and demand. I believe you see some of this here in the CCF, as you should do, in the newspapers and in the electronic media. Human nature, I guess!
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Bedrock of the Community
United States
10982 Posts |
Quote:
An old wives tale says that au should be worth 16 times as much as ag, because ag is 16 times as plentiful. I agree it's an old wives tale. The 16:1 ratio was established for monetary purposes long before the true rarity of either metal was known. Here's an interesting link on the subject: http://www.silverinscripture.com/mo...hanGold.html |
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Moderator
 Australia
16829 Posts |
Quote:
I think there are a lot of people out there whose only exposure to platinum was on a high school quiz over the symbols for elements. I am not sure there a majority of people out there associate platinum with a precious metal. After all, Burl Ives used to sing, "Silver and Gold... ," not, "Silver, Gold, and Platinum." Then again, most music fans would know that "going platinum" with a musical hit or album is even better than "going gold". And your platinum credit card gives you even more benefits than your gold one does. So I think there is this vague consciousness out there that "platinum", whatever it is, is even better than gold. 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
1285 Posts |
A couple years back (2007 to 2009 time frame) Pd (palladium) was given / categorized as a precious metal by some group in London. They are the keepers of what is considered a PM.
Most governments including the US DoD consider Pt and somewhat to a lesser extent Pd as strategic metal's holding small stock piles / inventory for an emergency (national security).
Pt and Pd have a delicate supply demand equilibrium at any given time and is worthy of doing ones own research.
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Pillar of the Community
Australia
2830 Posts |
quote: "About 22,000 tonnes if new silver is mined annually, and about 2,500 tonnes of new gold is mined annually.
Neither of these facts have any relationship to the current prices of those metals."
about 1,000 km south of where I live is a town called Tennant Creek. It is devoid of redeeming features, save and except for two -
fuel is available 24 hours/day, so when you get there, you can leave pretty soon afterward; and
the area around it has a lot of gold.
When gold prices are down, the mines become dormant, and people move away.
When gold prices rise, the mines re-open, and people return.
It's a small town at the best of times, but the population when the mines are operating is double what it is when they are closed.
Drawing a wider inference from this, I would say that the price of gold, or anything else which is mined, would be a major factor in determining how much is produced in a year. Of course, rising prices tend to dampen demand ...
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Replies: 24 / Views: 4,117 |
Posted 05/14/2011 7:23 pm
