Why has silver separated from gold?

[DFF]

Historically gold and silver move pretty much in sync with one another, but as can be seen in the chart below, since September, the gap between the two as grown uncharacteristically large.

So what's up with this? Is it because silver is more heavily used in industry than gold? Or is silver just really underpriced right now for some inexplicable reason?

 

[LibertyEagle]

Is it because gold is seen as money, much more than silver is and thus gold is what people are buying to store their wealth?

 

[DFF]

If that's the case then why did silver go ballistic and reach $20 an ounce back in March when gold simultaneously cracked $1000?

 

[LibertyEagle]

I don't really know, DFF. I'm just guessing here, but could it be due to the types of people who are buying now, versus then? Now, it's becoming clear to more everyday people around the world that their respective currency isn't a good store of value. It's all over the news these days. Versus the speculators that were driving the price up, back then.

I'm probably all wrong. But, that's my guess. Now maybe someone who actually knows something about this will come in here and tell us. lol.

 

[Gideon]

Gold Is Money

There may be other sites to talk about PMs, but GIM tends to have the most libertarian thinking folks, so I lurk there often in order to learn more about gold and silver.

They like Ron Paul too.

 

[Truth Warrior]

I believe the long term historic ratio of silver to gold is around 16 to 1. At times it fluctuates due to temporary supply/demand imbalances, forces, confidence and speculation.

 

[Dr.3D]

Why do people look at the price of paper gold and silver and then wonder why there are unexpected changes between the two?

Paper silver is easier to manipulate! It takes less money to manipulate the price of paper silver than it does to manipulate the price of paper gold. Both are manipulated on the COMEX and what you see for prices there has little to do with the actual value of either one of the physical metals.

Edit: Here are the actual prices of physical silver and gold.
http://silverbids.com/
$22.47 Average price of an ounce of silver.
$950.00 Average price of an ounce of gold.

 

[lodge939]

The demand for small quantities of physical seems to be almost as high as it is for gold. I guess a lot of big players aren't buying it because they think industry is going to slow down worldwide.

 

[Truth Warrior]

Why do people look at the price of paper gold and silver and then wonder why there are unexpected changes between the two?

Paper silver is easier to manipulate! It takes less money to manipulate the price of paper silver than it does to manipulate the price of paper gold. Both are manipulated on the COMEX and what you see for prices there has little to do with the actual value of either one of the physical metals.

Edit: Here are the actual prices of physical silver and gold.
http://silverbids.com/
$22.47 Average price of an ounce of silver.
$950.00 Average price of an ounce of gold.

Paper silver and gold are more PAPER than silver and gold.<IMHO>

 

[Dr.3D]

Paper silver and gold are more PAPER than silver and gold.<IMHO>

Nods in agreement.

 

[Dr.3D]

The real question one might ask about paper silver and gold is this.

If the gold inventory at COMEX has been depleted by 47.5% and the silver inventory at COMEX has been depleted by 45.7%, then why hasn't the price of paper gold and silver gone up?
http://meltdown2011.wordpress.com/2008/12/24/vaporize-comex-2008-12-24/

 

[Aratus]

bi-metalism, yes! good question! the depression we are on the lip and edge if not rim of...

 

[tremendoustie]

I think some view silver as partially industrial, so it's been damaged by the crash, wheras gold is viewed as almost entirely monetary, so it's been less damaged.

 

[DFF]

This is what I think as well, and the all-mighty Wikipedia backs up this assertion with it's breakdown for silvers usages.

Photography used 24% of the silver consumed in 2001 in the form of silver nitrate and silver halides, while 33% was used in jewelry, 40% for industrial uses, and only 3% for coins and medals. However its use in photography is dramatically declining because of the switch to digital technology

78% of gold meanwhile is used exclusively for jewelry.

Today, most of the gold that is newly mined or recycled is used in the manufacture of jewelry. About 78% of the gold consumed each year is used in the manufacture of jewelry.

 

[DFF]

Why do people look at the price of paper gold and silver and then wonder why there are unexpected changes between the two?

Paper silver is easier to manipulate! It takes less money to manipulate the price of paper silver than it does to manipulate the price of paper gold. Both are manipulated on the COMEX and what you see for prices there has little to do with the actual value of either one of the physical metals.

Edit: Here are the actual prices of physical silver and gold.
http://silverbids.com/
$22.47 Average price of an ounce of silver.
$950.00 Average price of an ounce of gold.

I agree COMEX is off and the central banks actively collude to suppress both gold and silver but these are E-Bay prices man...stuffs always overpriced there.

 

[MrNick]

Is silver still worth buying then?

 

[DFF]

Of course! It's a precious metal, and no printing press in the world can change that. The printing of dollars does have an effect on the price though. If another dollar rally occurs, which I anticipate, it will push the price of gold and silver back down. Then you can buy cheap and once the rally ends, sell for a nice profit. Keep a close eye on the dollar index. You'll observe the higher it goes, the lower the price of gold/silver. The lower it goes, the higher the price of gold/silver. It can't be emphasized enough how important the dollar index is in terms of knowing when to buy and when to sell.

http://www.fxstreet.com/rates-charts/usdollar-index/

 

[The Grinning Maniac]

Does that price for silver on ebay take the fees from eBay and Paypal into account? The auction may close for $22.00, but you don't see all of that in profit.

 

[DFF]

If I'm purchasing silver in high volume I'm using GoldMoney. No one can beat their rates, ease of purchase, selling, and customer service. All this "The world's about to come an end" rhetoric is horseshit. Sure, it's prudent to have "some" gold and silver on hand. But the notion that "If you don't hold it, you don't own it!" is a bunch of paranoid, tin-foil hat nonsense (at least when it comes to GoldMoney and the Perth Mint).

 

[Josh_LA]

Is it because gold is seen as money, much more than silver is and thus gold is what people are buying to store their wealth?

Also, supply and demand.

Silver is cheaper, so today it's easier to buy
Gold is usually jewelry vs. silver is industrially consumed.

Separation and imbalance is always a good thing for some people and bad thing for others, so bet on one side, and you'll take turns