Are Gold and Silver gonna keep going down?

[laurelpark]

I had an interesting meeting with someone in the gold industry last week, and we were discussing the various factors affecting gold. His thesis is that gold has maintained its real-world purchasing power throughout history, and even if we see prices go down today, that is mostly because we're seeing the price of core goods go down, too. Now, that doesn't mean that short term price swings are perfectly correlated to the cost of goods, but if you look at the long-term trends, they line up pretty well.

The biggest factor affecting gold price is the cost of energy to get it out of the ground and refined. As labor prices go up, the price of gold tends to go up. Conversely, as the cost of energy goes down, gold prices follow in lock step. He showed me a graph of energy cost and price of gold over the last hundred years or so, and it was uncanny. They follow each other almost perfectly.

So, the question we have to ask is this. Do we think energy prices will stay low forever? At some time or another, the price of energy is going to go up - unless of course someone makes cold fusion work, or we adopt alternative energy to the extent that the need for fossil fuels drops way below production.

Definitely was an interesting discussion from someone who has been in the industry for his entire career.

[smashycrashy]

I'll be talking to a CEO of a ~1/2 billion dollar gold mine company regarding selling him some stuff, I was going to ask him about the gold market but I really couldn't care less. If someone posts up an especially interesting question and I can fit in into the conversation I'll give an anonymous response.

[sixoclockhold]

I had an interesting meeting with someone in the gold industry last week, and we were discussing the various factors affecting gold. His thesis is that gold has maintained its real-world purchasing power throughout history, and even if we see prices go down today, that is mostly because we're seeing the price of core goods go down, too. Now, that doesn't mean that short term price swings are perfectly correlated to the cost of goods, but if you look at the long-term trends, they line up pretty well.

The biggest factor affecting gold price is the cost of energy to get it out of the ground and refined. As labor prices go up, the price of gold tends to go up. Conversely, as the cost of energy goes down, gold prices follow in lock step. He showed me a graph of energy cost and price of gold over the last hundred years or so, and it was uncanny. They follow each other almost perfectly.

So, the question we have to ask is this. Do we think energy prices will stay low forever? At some time or another, the price of energy is going to go up - unless of course someone makes cold fusion work, or we adopt alternative energy to the extent that the need for fossil fuels drops way below production.

Definitely was an interesting discussion from someone who has been in the industry for his entire career.

Not buying it. Paper moves the Gold market, we are most likely at a peak year for extraction with the last two years being very high in demand. This is the cabal lowering the boom on the juniors, putting them out of business. They can't raise capital in these markets, they are done. Guess who absorbs them?

Pretty nice to cover your short with Gold in the ground or prices very low, it's a win win for our masters. The Cabal has shorted the physical over 200 to 1. They are desperate for a plan, which is being implemented currently.

Keep buying, the physical market will unhook someday from the paper market as supply will be less in the future.

[sixoclockhold]

I'll be talking to a CEO of a ~1/2 billion dollar gold mine company regarding selling him some stuff, I was going to ask him about the gold market but I really couldn't care less. If someone posts up an especially interesting question and I can fit in into the conversation I'll give an anonymous response.

Better get a guaranteed letter of credit.

[smashycrashy]

Better get a guaranteed letter of credit.

I'd only worry if I was being paid in gold

[sixoclockhold]

I'd only worry if I was being paid in gold

US factory orders fell again in September

http://finance.yahoo.com/news/us-factory-orders-fell-again-150702709.html

If you don't see the writing on the wall, shame on you.

A stronger $ only makes it worse for us. There will be no rate increase, there will only be printing and Central Banks, Bankers, The Fed and Algo's pushing the stawk market higher to make everyone feel, it's ok.

It ain't OK, it's a rigged desperation move before the collapse.

Housing is slowing big time except the major cities where Hot Money is falling. Cash out and RUN.....

I'll take a stack of metals any day over digits and fiat.

[smashycrashy]

US factory orders fell again in September

http://finance.yahoo.com/news/us-factory-orders-fell-again-150702709.html

If you don't see the writing on the wall, shame on you.

A stronger $ only makes it worse for us. There will be no rate increase, there will only be printing and Central Banks, Bankers, The Fed and Algo's pushing the stawk market higher to make everyone feel, it's ok.

It ain't OK, it's a rigged desperation move before the collapse.

Housing is slowing big time except the major cities where Hot Money is falling. Cash out and RUN.....

I'll take a stack of metals any day over digits and fiat.

Service part of the economy makes up ~80% of GDP and you're worrying about the 20%... Manufacturing is slowing because of the commodity price drop and China devalued.. doesn't mean a crash.. meanwhile service sector is humming along.

[sixoclockhold]

Were humming along alright. That $20 trillion in debt ceiling shows that eh?

Burger flippers don't pay taxes. The good news is those flippers in Cali get $10 an hour in January, they will be able to afford a Happy Meal.

[sixoclockhold]

How well are we humming along?

When Obama took office 7 years ago our debt was $10 Trillion, when he leaves 8 years later it will be $20 Trillion.

Oh yes, we are humming, humin good.

If that doesn't spell Zimbabwe, you simply can't spell.

[navin r]

How about this theory: there will be no major economic crash prior to the Nov. 2016 elections, the libs in the W.H. will do whatever necessary to delay a potential crash, because a crash would make a republican president much more likely? Thoughts gentlemen?

[keenkeen]

The markets are up and PMs are down and the empty headed gold shills just keep shouting louder about how the "end of the world is coming".

The more things change the more they stay the same...even 3381 posts later.

[keenkeen]

How about this theory: there will be no major economic crash prior to the Nov. 2016 elections, the libs in the W.H. will do whatever necessary to delay a potential crash, because a crash would make a republican president much more likely? Thoughts gentlemen?

So you are saying the WH would try and avoid or delay a "pending economic crisis"?

No way...better alert the media about this "theory".

[sixoclockhold]

There is a pattern here and it's unstoppable. When I was young, you could double your savings with compounded interest every 8 years. Now we go backwards.

Bush Jr. the debt doubled over 8 yrs.

Obama the debt doubled over 8 yrs.

Hilary the debt will double over her 8 yrs. to $40 Trillion and I guess we will cease to be that great nation and lose our Reserve Currency status.

China is the game changer now. Even this year the numbers don't lie regardless of what we hear in the media. They are expanding like crazy at 6% increase in oil. Over 10 mm barrels a day now.

http://www.indexmundi.com/energy.aspx?country=cn&product=oil&graph=consumption

http://www.bloomberg.com/news/articles/2015-09-29/jefferies-china-s-demand-for-oil-is-totally-misunderstood-by-the-market

Ok, he is a Gold Bug but this is pretty much spot on imo, other than they can trigger our collapse anytime they want.

http://kingworldnews.com/dr-stephen-leeb-broadcast-interview-available-now-11-1-15/

Who's buying all the Gold? The next King !

[Ripon83]

Good theory BUT

Let us assume your theory is correct. I've actually stated this before and believe it quite possible. However look back to 08/09? How come the regime in place then, GW's, could hold off the economy trouble until after the election? As I recall it all started in the summer of the election - and was a catalyst in taking out McCain and electing obummer. Or was that orchestrated by the left?

How about this theory: there will be no major economic crash prior to the Nov. 2016 elections, the libs in the W.H. will do whatever necessary to delay a potential crash, because a crash would make a republican president much more likely? Thoughts gentlemen?

[navin r]