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 Replies: 19 / Views: 2,832 |
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Valued Member
Canada
103 Posts |
I noticed that gold is shooting through the roof, going as high as $1779 today. But I also noticed that silver is the only PM that dropped...down by $1.32 today. Thoughts as to why this is happening in opposite directions for the two?
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Pillar of the Community
Canada
1581 Posts |
Two thoughts:
(1) Silver is an industrial metal. Lots and lots of applications. So, physical demand is traditionally dependent on the industrial use. Fear that slowing economy -> less demand.
(2) Small relative market to gold. People see gold flying, and realizing it had been lagging silver, so people start shifting, but that will smack silver.
Past year:
Gold: +45.39%
Silver: +110.09%
Do you believe there is a permanent change in the gold/silver ratio (current 45.55:1), or will it return to the common post-gold standard levels of 50+:1?
The other amazing thing: gold > platinum.
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Pillar of the Community
Canada
1442 Posts |
Silver is viewed as, and grouped with other commodities, like oil.
Now that most asset classes move in tandem, when the markets fall, so do the commodities.
Gold is a flight to safety, especially in high inflation places like China, India...
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Valued Member
 Canada
103 Posts |
aren't platinum and palladium also primarily industrial metals?
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Pillar of the Community
United States
1150 Posts |
Platinum and palladium are industrail metals.
Gold AND silver have been monetary metals LOOOOOOONG before they were used in industry. Silver may be primarily an industrial metal currently, but that hasn't always been the case. And I don't have the figures on hand, but silver's price is manipulated downward by entities such as JP Morgan Chase.
If you do not think that right now is a good time to buy silver, than you should sell all of yours to me (not an offer, but a rhetorical statement).
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Valued Member
Canada
103 Posts |
and that's what I don't get. Silver has the benefit of being a metal associated with Gold in terms of historic monetary value. It is also a commodity used in industrial applications. Yet we see platinum, and palladium, both of which are primarily industrial commodities climbing. We have gold climbing based on it's safe haven status. Yet silver drops? Seems strange to me.
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Pillar of the Community
United States
5833 Posts |
Not just silver.
Gold was also manipulated by JP Morgan and Barrick Gold Corp. back as early as 1998.
I had a report that the numbers of gold was inflated by the 2 corporations, and Blanchard had lawsuits against Barrick Gold Corp., both settled out of court.
This was the start of my adventure getting into the bullion market as a youngster, later was fascinated with coins.
The money that I buy gold and silver even thought was a lot less, but looking how the economy grow in successions. IMO I would of been better of investing in high dividend stocks that pays every quarter.
I enjoy collecting coins and no regrets of not making money out of stocks, but now I enjoy both.
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Pillar of the Community
United States
1150 Posts |
Platinum and other PMs that are primarly used in industry are still more rare than silver and gold.
Silver and gold have the benefit of having been used as money for thousands of years. They used to have values established by true free markets. That ended with the paper manipulations that we still see today.
JP Morgan stands to lose their shirts if silver skyrockets. I'm certain that there are forces behind the low price that we just do not know about and there is too much money at stake by people who are too powerful.
With that being said, I am certain that the current dollar situation will eventually shake things out and silver will rise to a more appropriate value more in line with it's physical rarity, industrial usage, historical ratio to gold and status as a true monetary metal.
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Pillar of the Community
Canada
1442 Posts |
"JP Morgan stands to lose their shirts if silver skyrockets" Wait...you mean the same JP Morgan that has over $100 trillion in derivatives, is going to "lose their shirt" IF they lose a few billion in silver? They can probably eat the entire silver market as part of a balanced breakfast, and not even know it. Lets see...in the last 3 weeks, silver lost 10%, while ERY energy bears made 100% profit...in 3 weeks. So much for stockpiling the shiny stuff. But in all seriousness...in 2009-2011, Silver and gold, were in the same bucket as palladium, platinum, oil, domestic and international markets, canadian and aussie dollar, etc. On the other end of the see-saw, was the USD. All these assets rose due to the belief that QE1 and QE2 would jump start the economy, inflation...and that the Fed would support all markets no matter what, and bury the US dollar. It worked for a little while, but it was an illusion. The FED failed on all accounts - the effect was psychological and did not translate into the real world, and like all illusions, once you strip the facade, and you realize there is nothing there, panic ensues. The debt ceiling theatre and S&P downgrade were convenient scapegoats, planned well in advance to explain it all away. Certainly gold gets a bit of play from the perceived threat of inflation in North America, real default risk in Europe, and real inflation in emerging markets. But like in 2008, it will not escape the pull of gravity, once the big boys are playing at the other side of the table (i.e. short)... To buy into the Max Keiser silver and gold BS and hoopla..is really to short-change oneself. Its a poor strategy for both trading and investing. Heck, its even a poor survivalist strategy. Yes...it may preserve wealth if you're living in Argentina, Greece, or Zimbabwe...but unless you're moving there, its not a viable strategy here.  Edited by canadian-varieties
08/10/2011 01:29 am
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Pillar of the Community
Canada
1581 Posts |
Platinum is climbing because of a tradition of being worth more than gold. Note, it is NOT right now, so it could diverge if people give up on that assumption.
Palladium (currently $746) dropped $30 per oz. on Monday to ($710), and had come down from $830 on Aug 2.
Edited by dialog_gvf
08/10/2011 01:48 am
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Pillar of the Community
Canada
1581 Posts |
Silver is popping bigger than gold today. (Oh no, JP is gonna have my legs broke)
The lesson: Don't try to figure out a trend of all this from a few days.
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Valued Member
Canada
103 Posts |
@dialog_gvf...I agree that silver is higher today, however it's still within the same range where it's been for weeks or months. In contrast, gold is breaking new ground. Anyways, I don't claim to have any answers, I only asked the original question since it seems odd to me how divergent silver is at times. Having said that, I bought my hoard at under $5 an ounce a few years ago, so I guess I can't complain too much.
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Pillar of the Community
Canada
1581 Posts |
And, when silver was soaring and gold was trading in a range, people wondered about that too.
The claims are gold is only in 5% of portfolios, and silver is a very small market compared to gold. So, even tiny changes in sentiment can whip silver around like crazy.
Silver popped to $50 and then crashed to $35. You'd think people would be cautious after that.
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Pillar of the Community
Canada
1442 Posts |
Very true...
I find it useful to look at trends over at least 2-3 year periods. The smaller movements within that time range are often just noise.
Looking at it that way, it becomes clear that commodities followed the general markets over the 2009-2011 period, with likely little regard for real supply/demand.
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Pillar of the Community
Canada
1581 Posts |
A couple of numbers:
Spot: Hit $1813 around the time of this writing
CME: New record of 504,368 gold options contracts traded
Update:
CME fiddling again, and have raised their margin maintenance requirements 22% to $5500 per contract from $4500.
When they did that to silver, the collapse soon followed.
Edited by dialog_gvf
08/10/2011 10:08 pm
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New Member
Canada
24 Posts |
Regarding palladium: I have not told anyone (till now) of buying some palladium. I bought one oz of palladium, Canada Maple Leaf 2005 graded PCGS MS69 and paid including taxes appoximately $2300. There is quite a story of why and how I did this but that does not matter. I did it. I do not know what it is worth and have never tried to find out. I do know that I have a precious metal in a high coin grade that I think is absurd, absurd, absurd. I hid it away so no one would know how I spent my money. I could have a respectable grade 1926 Far6 nickel which I can not afford, BUT NO, I have some very high grade palladium. It feels so good to say all this.
Does anyone have any suggestions on what I should do?
Gerry.(Dukester)
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Replies: 19 / Views: 2,832 |
Posted 08/09/2011 9:40 pm
