| Author |
 Replies: 10 / Views: 1,472 |
|
|
Valued Member
United States
397 Posts |
Looking at the market & silver prices over the past 3 months, I've started to ask myself a few questions about the current pricing of silver.
Mainly what causes the prices to rise and fall. Looking at the charts, I only see one thing fueling the demand for silver - speculation. Sure, monetary needs are important, however based on historic data it's not that major, industrial demand drives it. And whenever bad economic news comes in, that may effect the output of the world economy, silver seems to tank while gold just climbs even further.
This year I decided early on that I would start buying silver on a regular basis. Thankfully I've been able to buy a decent bit well below spot (My median buy-in price is around $16 per ounce). So my thoughts are about the fact that maybe I should just start trading in some of my more common silver to people who are holding coins of numismatic value. If you look at the various indexes of rare coins, they've continued to increase since 1940 unlike precious metals. Compared to silver & gold, there have been several peaks, however it's not a very solid growth cycle, just volatile.
I'm curious if anyone else sees it like this , or if the majority feel that holding onto silver would be the best bet.
|
|
|
|
Pillar of the Community
United States
667 Posts |
There is no answer to your question. Investing in silver is speculation. Thus I hope it will go up.
Granted there is information sources out there to help you make a decision but in reality it is not the same information that you would use for a true investment like a stock for a company.
So what you get is a persons best guess or judgement of the market based on information they can put together. These indicators can range from industrial use, mining amounts, large movements of silver and a host of other things.
There is a large following that think the price of silver is being manipulated by banks, governments or other persons/investment companies.
Yes as speculators we dollar cost average.
At a $16 dollar cost average you have done well enough to make over a 50% return on your speculation. A lot of us who have been in the market are down in the single digits.
I am not a numismatic person so I can not offer any thing in that area.
I will say this if you feel you have made enough then sell the bullion. If you like to gamble hold and speculate that the price will go up.
At this time I don't see a problem that concerns me about a fall in the price of silver. I do see room for an increase maybe somewhere between $45 and $60 but I could be wrong.
I can't say if this would be fast or slow but if it drops it will be fast.
I am holding but I have time on my side. If I didn't have time I would consider a different plan of action.
Edited by mkfarm
08/10/2011 11:07 am
|
|
Pillar of the Community
United States
3670 Posts |
I figure industrial demand is gonna kick in eventually, and the day will come where one company does not get its order filled, while another does (both have no regards for the silver buying comp), and that is when it is gonna really start to climb....
That, and gold getting to high to even consider, and where is 90% of the Pm hoarders gonna turn to at that point if they have not already, silver I say....
Plus, we are a want it now society, and most of us had figured silver to have already breached 50 an oz. and left it behind. Bu tin the end, I say patience is key....
Edited by Silverhawk74
08/10/2011 12:29 pm
|
|
Pillar of the Community
United States
2335 Posts |
I know this will be heresy in this section but I'm going to say it anyway. Industrial demand for silver is easily covered by recycling & mining.
The main reason silver has increased over the last several years is that there is more demand for it as an investment/speculation. The primary driver behind that demand was the creation of ETF's backed by physical silver. As long as there is an interest in the silver ETF's the price of silver will be stable or will increase. If there is a sudden flight from silver ETF's into the next big thing the price of silver will fall.....possibly faster than it went up.
|
|
Pillar of the Community
United States
4008 Posts |
Quote:
As long as there is an interest in the silver ETF's the price of silver will be stable or will increase. If there is a sudden flight from silver ETF's into the next big thing the price of silver will fall.....possibly faster than it went up. All that may well be heresy but it is also quite sensible. Only fly in the ointment is that in order to sell, people MUST want fiat currency more than they want silver. This would be the case for an ETF if enough investors sold out and left them sitting with a few hundred tons of bullion and no cash. Most ETF investors cannot take physical delivery, so would be paid off for their shares in cash. The way that things are going these days, no one knows which way this pendulum will swing, how far, or when. |
|
Pillar of the Community
United States
2335 Posts |
People don't have to want fiat currency more than they want silver, they just need to want the currency as a medium of exchange in order to get what they truly want. I'm the first to admit I don't have any idea what is going to happen in any market......and a quick look at my net worth proves it.
|
|
Pillar of the Community
United States
4008 Posts |
Quote:
People don't have to want fiat currency more than they want silver... Of course they do. This is the definition of selling something. If I want X more than I want money, I keep it. If I want money more than X, I sell it. |
|
Pillar of the Community
United States
1285 Posts |
trdhrdr007, What you state is FACT..some more below. Here in the USA industrial demand is going side ways / slight decline due to silver which was being used for photography is NO longer needed. Photography used to be a BIG part of the industrial silver demand around the world...dyodd  |
|
Valued Member
United States
123 Posts |
I was always under the impression that a reason for higher volatility in silver (vs. gold or platinum) was that silver's lower price point simply makes it easier, more convenient, and more accessible to more people in speculation. The fact that it is easier to buy makes it easier to sell; therefore it has a higher swing than other PMs.
|
|
Pillar of the Community
United States
2335 Posts |
Quote:
Of course they do. This is the definition of selling something. If I want X more than I want money, I keep it. If I want money more than X, I sell it. I guess I took your original comment to mean that people would only sell silver if they wanted to KEEP cash instead of silver. My point is that they may exchange silver for cash as an intermediate step towards obtaining what they really want. I think we're both on the same page here just coming from different directions. |
|
Pillar of the Community
United States
2168 Posts |
I have seen some ads willing to take x amount of silver pre1965 coins or gold coins for legal tender to purchase an item for sale. A resent article stated 20cents for a gallon of gas! (in pre 1965 coins of course!) An easy way for a seller to obtain silver!
|
| |
Replies: 10 / Views: 1,472 |
|
Posted 08/10/2011 12:28 pm
