Why is Silver Dropping, and Gold Skyrocketing?

[Esoteric]

Gold is at an all-time high, and Silver is down over the past week?

 

[PredatorOC]

The silver market is smaller than the gold market and thus easier to manipulate. I seem to recall there being yet another margin hike, which always brings down the price of silver and since silver is tied in with gold, it has a carryover effect on gold as well. But I personally wouldn't worry too much about even if you own silver; it's all a paper contract market, the price is fiction and the real price of silver will be revealed eventually.

 

[yintercept]

In addition to the changed margin requirements, no-one knows how much silver is out there. During the rise to $50 earlier this year a lot of silver started flying out of cupboards, which seemed to spook silver investors. Most of the people who had gold trinkets to melt sold them already; so there is less uncertainty.

 

[Arklatex]

Much easier for the alchemist to create silver than gold! Duh!

 

[One Last Battle!]

A lot of silver's value comes from industrial applications, factories, etc which are falling, whereas gold is pretty much entirely a hedge against inflation.

Silver's value will probably rise anyway in the long run, it is just that DOW crashes hurt its value too.

 

[devil21]

I think you're seeing a lot of investors liquidating their silver positions just to buy up into gold positions.

 

[WilliamC]

We're at a 46:1 ratio right now silver/gold.

Eventually (I hope) a major player like China or India or a hedge fund will just cough up a few billion and take out all of the COMEX future deliverys, causing the paper markets to collapse and the price of physical will start to rise, and silver will again shine.

But right now I agree, it's a dog. I've got $20 face value of 90% junk I'm just waiting to sell as soon as I can get over 50/oz for it.

I'd actually be buying silver right now if the wife would let me use some of our emergency cash.

Oh well, cash isn't quite useless yet, maybe by the end of the week though..........................

 

[Jandrsn21]

Was doing some shopping the other day. Got home put my change down and saw a very odd looking dime. Picked it up and read 1964, cha ching!!! 2.80$ richer!

 

[yintercept]

Eventually (I hope) a major player like China or India or a hedge fund will just cough up a few billion and take out all of the COMEX future deliverys, causing the paper markets to collapse and the price of physical will start to rise, and silver will again shine.

I sold gold and bought silver .... but, I do not "hope" a currency devaluation happens. The last thing I want to happen is for our currency to devalue and people to riot in the street in response.

I simply think that, if governments started allowing people to trade in precious metals, people would find silver more useful than gold & the ratio between the metals would improve.

I hope the American currency stays strong, and that we avoid hyper-inflation.

 

[sirgonzo420]

Was doing some shopping the other day. Got home put my change down and saw a very odd looking dime. Picked it up and read 1964, cha ching!!! 2.80$ richer!

It's kinda funny when it's the dime that ISN'T counterfeit that looks odd.

 

[oyarde]

It's kinda funny when it's the dime that ISN'T counterfeit that looks odd.

You can even tell , just by how they feel.

 

[Agorism]

BC silver is partially a function of industrial demand and it was lardy overpriced.

 

[Travlyr]

BC silver is partially a function of industrial demand and it was lardy overpriced.

It seems like paper silver establishes the price for physical silver. It seems kind of weird that it would work that way because it is my understanding that paper silver is not redeemable.

 

[Agorism]

Why? Apple stock bombs out when aggregate demand gets shocked. So does oil. Oil is a a commodity that has industrial use.

When aggregate demand gets smashed (partially based on future expectations of course), oil can go from 140 in a week despite it being a commodity.

Silver is not something that is just hoarded like gold. People use it in industry just like oil.

It's still a "real" asset worth owning, but it's a different animal than gold.

Plus it's been outperforming gold over the past two years (as in I have felt it was overpriced.) Can't stay high forever without correction.

Conversely if the economy gets back on track silver may have a great rebound.

 

[Razmear]

I think the bigger question is why isn't platinum spiking alongside gold? They are about equal now, but there is far less platinum available.

eb

 

[Dr.3D]

BC silver is partially a function of industrial demand and it was lardy overpriced.

Over priced? LOL, there is less silver above ground than there is gold. It's gold that is over priced compared to silver.

 

[WilliamC]

I sold gold and bought silver .... but, I do not "hope" a currency devaluation happens. The last thing I want to happen is for our currency to devalue and people to riot in the street in response.

I simply think that, if governments started allowing people to trade in precious metals, people would find silver more useful than gold & the ratio between the metals would improve.

I hope the American currency stays strong, and that we avoid hyper-inflation.

I mean the paper silver market, not fiat in general.

That's the good thing about investing in PM's, I can actually be happy when the value of them goes down.

In my pre-64 two-bit opinion, silver could easily be trading at ~100/oz now and it would have little if any impact on the global financial markets simply because it (silver) is such a small part of it.