Posted on 08/15/2018 8:04:39 AM PDT by NRx
Gold and silver have been getting the snot beaten out of them lately as people respond to a fiat currency crisis in Turkey by flocking to another fiat currency. But even if I were a Keynesian and believed in paper money, I'd have to say that precious metals are looking attractive. I'm generally a gold guy, but silver is crazy cheap right now. As of right now it's trading at around $14.50 oz. But the real story that conventional analysts are missing is the silver to gold price ratio. Since gold was demonetized in the early 1970's the average price ratio has typically been in the range of 40-50 oz of silver to 1 oz of gold. Right now it's at 82:1! At that ratio silver is clearly undervalued relative to gold. Time to back up the truck. (Ok, in my case it's probably going to be the Prius.)
I buy 1921 uncirculated silver dollars, because they’re fungible.
Silver 52 week spread 14.345 - 18.260
Gold 52 week spread 1183.80 - 1392.30
Silver has been falling for the last few days
Storing those green monster boxes of silver eagles is a problem for me. 1oz gold eagles, much easier. Not a good way to buy, but it’s realistic.
Purposely being pushed down ahead of the coming engineered crash.
When trying to trade on the historical ratio between two asset classes the only way to do it with good chances of success is arbitrage. Arbitrage requires taking simultaneously long positions in the apparent cheap asset (silver) and short positions in the strong asset (gold). As the ratio returns to historical norms the profits on one side of the arbitrage exceed the losses on the other. The overall profit may not be as great as a naked one sided transaction but the probability of success of the two sided trade far exceeds that of the single trade.
At the beginning of this year, Gold on the futures market traded at $1,390 / troy ounce (01/28/18) and this morning it is down to near $1,186. When trading opened on the US COMEX for GCZ8 in 2012, that trade was at $1,813.10 (10/01/12) and dropping steeply. The lowest trade showing for GCZ8 was on the same date 3 years later at $1,088.60 and since then it appears to have traded between the high 1300s and the low 1200s. The recent history since April of this year has been a near continuous and steady drop from $1,366.90.
I agree with a lot of the other posters here, keep watching but don’t buy big when everybody else is selling. I’m nibbling in *very* small doses as I buy single troy ounce and fraction ounce coins in silver, gold & platinum. (FYI: Platinum is at a 15 year low.)
[They will TELL you they are selling it to you at $15 an oz, but unless you have a calculator on you and to do the math, you might not notice that the final bill is closer to $18 an oz]
https://www.gainesvillecoins.com/
I’ve always like dealing with these people if anyone is looking for someone.
How do you buy a contract of gold or silver? Just call up a broker with a Series 3 Commodities license and say “buy me a contract” and let it be delivered?
Also, what is a contract of Silver? 1000 oz bar? what about gold? 100 oz bar?
On a side note, had a friend learn the hard way that buying an ounce of silver at spot value is only a deal if you read the fine print and realize they are selling you and oz. of silver, not a Troy oz.
Good points and I wasn’t trying to confuse. My info is/was current to the WSJ.com website because that is the most current market watching easily accessible. The prices quoted on that posting were for December contracts of Gold at 100 tr/oz deliverable [CME] (I assume a bar of gold but I never actually did a contract.) Thing about this kind of trading is that there is a time premium built in so you may do better on the spot market BUT at 100 tr/oz size, this is where the big boy commodity traders play. Silver is 5,000 tr/oz deliverable size, also CME.
The key word being *ad*. (grin)
Still, long term, I can't help thinking gold & silver are a good disaster hedge. Note I said disaster hedge, not "investment".
Gold is out of my range, but I've been stacking silver for years. I figure if it doesn't all come crashing down while I am alive, my daughter will get it. Fine by me. She is a serious and smart tightwad so any money she gets is never wasted.
Those were example numbers, but they still suck.
Thank goodness precious metals hold their values so well.. one can never have enough gold and silver around for a rainy day.
Fortunately, Wifey has never parted with any of hers .. only adds more and more to the hoard. dang those shopping channels.
Cheap is a relative term. I bought several thousand ounces when it was $4 an ounce. Still have it in case of an emergency. Bought some gold too when it was $400/ounce. Fortunately, have not had to use either.
My first thought is are they really wanting me to do better or is there something in it for them? If they kept a good thing to themselves, would they not have more of it for themselves? They don't even know me, so why are they so eager to make me secure and well off? Why do they care?
If I had knew of a sure fire way to financial security and a way make easy investment dollars, would I tell others all about it?
That may be the craziest thing I ever heard. Oh yeah..... I love to buy an investment that I immediately lose money on.
[Those were example numbers, but they still suck.]
SLV $13.59 52wk Low was 14.08 yesterday. 52wk hi 17.41
GLD $111.29 52wk low was 112.83 yesterday. 52 wk hi 129.52
PPLT $73.45 52 wk low was 75.65 yesterday. 52 wk hi 97.94
PALL $81.00 52 wk low was 81.93 yesterday. 52 week high was 107.47.
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