Are Gold and Silver gonna keep going down?

[keenkeen]

Have Americans lost faith in the Almighty Greenback?

I think the case could be made that the majority have. 62% have less than $1,000 in savings and obviously don't have the money skills to be able to accumulate Fiat, let alone PM's.

Will this loss of confidence trigger a Gold backed currency?

This must be true...I mean Trump even went bankrupt four times because he lost so much faith in USA fiat funny money.

[BigBamBoo]

Well the two I know are kinda like six...they truely believe that "any day" the dollar is going to collapse and they are going to live on their horde of silver coins.
But the thing is, their pensions from their life of labor is what they live off...comfortably I might add.

4000 oz of gold, even when it was "cheaper" would have been quite an investment...30 years ago gold was $400 an oz would have been over $1.5 million dollars. So your working stiff must of had a better then average job or received a nice inheritance to amass that amount of gold.

So with his real estate holdings, gold, silver, and I am going to go out on a limb here...I would bet he probably has a pretty good stock portfolio to boot...I am sure he does live a comfortable life.
Does his gold make him sleep better? Who knows?

I am just guessing again...but if he is as forward thinking as you portray him...I would guess him home is paid for, has no dept, etc. To me, that would make me sleep easier then the gold I have...which is no where near 4000 oz.

I have zero dept, cars paid for, a little money in the bank, hope to have my home paid off in 5-7 years, etc.
If gold hits $1500 an oz again, I have plans to sell off most of what I am holding...sold most of what I had when it hit $1800 oz and paid off a few bills and bought a new car.

Everyone does what they feel is right...is stacking PM's is your thing...go for it. But chances are you will die with it never used for "the end of the world".
Your children will most likely have a great time spending it though.

.

[keenkeen]

Umm...stacking silver for 40 years?! Don't they understand that they can trade that silver for fiat at anytime (and probably realize substantial gains) and use that fiat for retirement expenses?

Or are they simply keeping the silver off-the-books so that the state doesn't lien it/sieze it for retirement home expenses because they'd rather bequeath that silver to their heirs or charity, rather than the state?

Okay... Gotta throw this out there. I, too, "knew a guy" (I wish it was me, but sadly it isn't). Back when PMs were much cheaper he bought 1,000 toz of gold and 4,000 toz. of silver and hid them. He isn't complaining but lives modestly; his businesses have done well, he bought a farm and other realty, and (as far as I know) is still sitting on a stash of PMs that he buried somewhere (I just wish he'd tell me where!). For a "working stiff", he's done very well. IF he were to sell, I'm guesstimating he'd be looking at somewhere around a 400 or 500 percent return. But... Unless something has changed that I'm not aware of, he "just sleeps better" knowing that stash exists "just in case".

Citizen_B - how would you characterize him?

Also, why wouldn't "the old guy" you know just liquidate his cheaply-purchased PMs today if he needs fiat?

So this "guy" bought 1000oz of gold and 4000oz silver 45+ years ago?

How old is he now?

And just think how much $ he would have if he invested that money in stock market index funds...

[glockman19]

Is this the Wall Street Journal thread?

In all seriousness, how about the "big traders" here offer some personal insight and prognostications to us "little people" regarding PMs. Make a guess: PMs - up or down, how much, what time frame(s)? .

Also, how exposed are you "big traders" to PMs? What percentage of your portfolio do PMs represent (that would seem to be a fair question considering the nature of this thread and subforum)?

Some of us simply aren't interested in the public equity and bond markets (maybe we're too broke to play, or maybe we're just too distrustful of the markets, or maybe we just can't swallow the craziness that the markets have demonstrated since the fundamentals were basically forgotten) but we are interested in PMs (maybe as a "prep", maybe as a portfolio hedge, maybe as "sound money" advocates, maybe simply as folks who esteem the wisdom behind Article 1 Section 10 of the U.S. Constitution).

Also, what would you guys do if you see a Deutsche Bank meltdown coming?

I have been out of PM's for 2-3 years now. I made great money with silver. I hold gold.

Today the Silver/Gold Ratio is 65.96:1 Historically it is 60:1 It was recently 80:1 meaning one should go up or down...well both went up silver more. It would have been a good trade over the last 8 months. Gold hit a low of $1049.40 in December Silver was 13.58 a 77.27:1 ratio.

An election year, Markets at multi year high's, interest rates that can only go up, earnings mixed...the only positive I see is our currency staying strong against others...Brexit helped move the pound to $.76 and the Euro to around $.89 to the dollar... is $1.31 Canadian.

The wild card...terrorists.

Either way I can see Gold going over $1,500 between November and January, PM's tend to peak at $1,650. along with VIX Options Gold could pop with a market contraction sometime between late August to mid September.

So I might be a buyer IF Gold dips under it's 14 day moving average.

[Citizen_B]

Umm...stacking silver for 40 years?! Don't they understand that they can trade that silver for fiat at anytime (and probably realize substantial gains) and use that fiat for retirement expenses?

Or are they simply keeping the silver off-the-books so that the state doesn't lien it/sieze it for retirement home expenses because they'd rather bequeath that silver to their heirs or charity, rather than the state?

Okay... Gotta throw this out there. I, too, "knew a guy" (I wish it was me, but sadly it isn't). Back when PMs were much cheaper he bought 1,000 toz of gold and 4,000 toz. of silver and hid them. He isn't complaining but lives modestly; his businesses have done well, he bought a farm and other realty, and (as far as I know) is still sitting on a stash of PMs that he buried somewhere (I just wish he'd tell me where!). For a "working stiff", he's done very well. IF he were to sell, I'm guesstimating he'd be looking at somewhere around a 400 or 500 percent return. But... Unless something has changed that I'm not aware of, he "just sleeps better" knowing that stash exists "just in case".

Citizen_B - how would you characterize him?

Also, why wouldn't "the old guy" you know just liquidate his cheaply-purchased PMs today if he needs fiat?

I would characterize your guy as an individual who's well off and has some PMs as a hedge. If his businesses have done well, he doesn't 'need' to do anything financially and he understands how to make a dollar work for him. Ask him why he doesn't sell all his businesses and other assets and purchase PMs...

My guy is in a very different circumstance. I don't know what his income has been, but from his chosen profession it can't be a lot. When I say 'horde gold' I don't mean he has a pallet of gold in his basement, I mean after he pays the bills, the only thing he'll 'invest' in is gold. No cash savings, no 401k. I don't know how much gold he has. He didn't just buy a boat load 30 years ago and now it's worth a fortune. Slow accumulation with left over income. If he had a boat load, believe me he'd be retired already. Gold's nominal price looks very cheap in the past, but the real inflation adjusted price is different.

[glockman19]

Well the two I know are kinda like six...they truely believe that "any day" the dollar is going to collapse and they are going to live on their horde of silver coins.
But the thing is, their pensions from their life of labor is what they live off...comfortably I might add.

4000 oz of gold, even when it was "cheaper" would have been quite an investment...30 years ago gold was $400 an oz would have been over $1.5 million dollars. So your working stiff must of had a better then average job or received a nice inheritance to amass that amount of gold.

So with his real estate holdings, gold, silver, and I am going to go out on a limb here...I would bet he probably has a pretty good stock portfolio to boot...I am sure he does live a comfortable life.
Does his gold make him sleep better? Who knows?

I am just guessing again...but if he is as forward thinking as you portray him...I would guess him home is paid for, has no dept, etc. To me, that would make me sleep easier then the gold I have...which is no where near 4000 oz.

I have zero dept, cars paid for, a little money in the bank, hope to have my home paid off in 5-7 years, etc.
If gold hits $1500 an oz again, I have plans to sell off most of what I am holding...sold most of what I had when it hit $1800 oz and paid off a few bills and bought a new car.

Everyone does what they feel is right...is stacking PM's is your thing...go for it. But chances are you will die with it never used for "the end of the world".
Your children will most likely have a great time spending it though.

.

20 years ago 1996 you could have bought gold for $380 oz. and Silver $5.20 oz
30 years ago 1986 you could have bought gold for $340 oz. and Silver $5 oz
40 years ago 1976 you could have bought gold for $120 oz. and Silver $4 oz

[Bill Steele]

Is this the Wall Street Journal thread?

Guilty, sorry, I promise I will quit. This thread was about precious metal and I hijacked it, my bad.

In all seriousness, how about the "big traders" here offer some personal insight and prognostications to us "little people" regarding PMs. Make a guess: PMs - up or down, how much, what time frame(s)? .

Like currency, the term big trader is relative, I certainly don't think of myself as a big trader. My guess right now is gold is going to weaken going into September. I believe there is growing concern at the Fed, that they may need some altitude if they end up facing another credit dislocation dogfight. If they even touch the Fed funds rate, the dollar is going to get stronger very quickly and that will hurt gold. I also suspect they deep down fear Jeremy Stein will start writing very in depth about Fed induced asset bubbles, papers they (all together) don't have the horsepower to refute.

Also, how exposed are you "big traders" to PMs? What percentage of your portfolio do PMs represent (that would seem to be a fair question considering the nature of this thread and subforum)?

I have a grand total of roughly 10% of my liquid net worth in precious metal related investments (also other materials, that also have a gold component), that includes gold miners and gold securities GLD. These are always trades. When gold got down below $1100 I started buying GLD and the miners I liked, I am out of half my miners position and have yet to sell my GLD. I personally cannot conjure a scenario where the dollar collapses, so buy and hold gold makes no sense to me.

Some of us simply aren't interested in the public equity and bond markets (maybe we're too broke to play, or maybe we're just too distrustful of the markets, or maybe we just can't swallow the craziness that the markets have demonstrated since the fundamentals were basically forgotten) but we are interested in PMs (maybe as a "prep", maybe as a portfolio hedge, maybe as "sound money" advocates, maybe simply as folks who esteem the wisdom behind Article 1 Section 10 of the U.S. Constitution).

I can respect that.

Also, what would you guys do if you see a Deutsche Bank meltdown coming?

I suspect the common equity of DB is already dead man walking. Although it is hard to get my head around, also thinking Angela Merkel wouldn't survive it (although she may not survive the immigration issue anyway), the EU is really enamored with the new shiny object of bank bail-in's, so I can envision that happening to recapitalize the bank. In the end, if the Euro zone is going to survive, massive wealth transfers (beyond those already in place) are going to have to happen, this might just be one of the vehicles. For those that believe in the final analysis Germany will not be willing to pay the price, consider what they were willing to pay, just to get the two halves back together. Germany has accomplished through the EU, what it couldn't through 2 World Wars. They will likely want to hold onto that, even at massive future expense.

Just my $.02

[Bill Steele]

I have been out of PM's for 2-3 years now. I made great money with silver. I hold gold.

Today the Silver/Gold Ratio is 65.96:1 Historically it is 60:1 It was recently 80:1 meaning one should go up or down...well both went up silver more. It would have been a good trade over the last 8 months. Gold hit a low of $1049.40 in December Silver was 13.58 a 77.27:1 ratio.

An election year, Markets at multi year high's, interest rates that can only go up, earnings mixed...the only positive I see is our currency staying strong against others...Brexit helped move the pound to $.76 and the Euro to around $.89 to the dollar... is $1.31 Canadian.

The wild card...terrorists.

Either way I can see Gold going over $1,500 between November and January, PM's tend to peak at $1,650. along with VIX Options Gold could pop with a market contraction sometime between late August to mid September.

I actually think gold and equities may stay correlated in this period. I am thinking, maybe just hoping, the miners at least will follow the broader indexes. I think it could be a mini asset off period. When everybody gets back to work after Labor Day, all bets are off. I would probably have my VIX options trade already rolled out (calendar) by then, if I ended up right.

So I might be a buyer IF Gold dips under it's 14 day moving average.

Promise all done now.

[Not a Cook]

4000 oz of gold, even when it was "cheaper" would have been quite an investment...30 years ago gold was $400 an oz would have been over $1.5 million dollars. So your working stiff must of had a better then average job or received a nice inheritance to amass that amount of gold.

So with his real estate holdings, gold, silver, and I am going to go out on a limb here...I would bet he probably has a pretty good stock portfolio to boot...I am sure he does live a comfortable life.
Does his gold make him sleep better? Who knows?

I am just guessing again...but if he is as forward thinking as you portray him...I would guess him home is paid for, has no dept, etc. To me, that would make me sleep easier then the gold I have...which is no where near 4000 oz.

No... he didn't have "a better than average job" nor did he receive "a nice inheritance." No stocks. Doesn't trust banks, and for the most part doesn't deal with them (except when he borrows money from them ). He just worked hard, and smart. Physical labor - literally. I have no idea what his net worth is, but I'm pretty sure it's fairly positive.

So this "guy" bought 1000oz of gold and 4000oz silver 45+ years ago?

Umm... no where near that long ago. I'm thinking it was more like '99 if memory serves correctly. Unless I'm mistaken, weren't a lot of folks picking up physical gold at well under $300/toz and physical silver at a little over $5/toz?

And just think how much $ he would have if he invested that money in stock market index funds...

Let's see... without knowing the specific dates of purchase and exact dollar amounts, returns are difficult to calculate and compare. But, for discussion's sake, let's ballpark it, shall we?

Purchasing physical gold and silver in '99 at the ratios mentioned would've returned somewhere around maybe 250% to 400% (depending on exact date, type of physical product(s), premiums, etc.) and assuming it was liquidated today. That'd be a WAY higher return than stock market index funds purchased about the same time, no? Wouldn't it be fair to ballpark the return from a stock market index fund purchased about the same time and held over the same period to be +/-67%?

So... in this case, holding physical gold was the clear winner. That's obviously not always the case, but I shared this because I grew tired of one-sided anecdotal evidence.

All that said... there are a lot of folks in this thread who've indicated they purchased physical PMs at the "recent low" price levels that've hit since this thread was begun. That said, they may or may not one day enjoy returns that rival (or perhaps even surpass) that from investing in stock market index funds.

Here are a couple videos I shared before that I'm guessing you may find interesting:

[Citizen_B]

So in 1999 he bought 1,000 oz. of gold at ~$400/oz. and 4,000 oz. of silver at ~$7.50/oz., inflation adjusted, coincidentally at the lowest prices since the 70's. That's $400,000 worth of gold and $30,000 of silver. Sounds like a great example of a PM rags to riches story... He must have made that $430,000 buying/selling PMs before 1999 as well...

[keenkeen]

Wait I thought his returns where 400 or 500 percent?

I'm starting to think this may not be a "true" story...

Btw please explain how someone would make a 400% return buying Silver and Gold in 1999 and selling today...I'm not seeing it.

[sixoclockhold]

Hand over Fist !

We're heading back to new highs above $1,900.

Buy Buy Buy......

[Blade Gunner]

These "astounding" returns where achieved over very long holding periods. What if you made the same investment in Apple stock, you'd be way ahead of gold. Gold is not an "investment" it is an arbitrator of relative value of fiat money and government bonds. It generates no income. Gold mining stocks would be an investment. They are a business that creates a product and sells it for more than it cost to produce.

[sixoclockhold]

These "astounding" returns where achieved over very long holding periods. What if you made the same investment in Apple stock, you'd be way ahead of gold. Gold is not an "investment" it is an arbitrator of relative value of fiat money and government bonds. It generates no income. Gold mining stocks would be an investment. They are a business that creates a product and sells it for more than it cost to produce.

Why APPLE?

What if you diversified in say, World Com, World Savings and Loan, GM, Sears, United Airlines, Wonder Bread

How would you be doing?

For thousands of years, Gold has been the place to achieve King & Queen status, it's that good.

[Not a Cook]

Wait I thought his returns where 400 or 500 percent?

I'm starting to think this may not be a "true" story...

Btw please explain how someone would make a 400% return buying Silver and Gold in 1999 and selling today...I'm not seeing it.

As a matter of fact...I'm not seeing 250%.

My "400% to 500%" is probably a little off currently; based upon his actual numbers, it was accurate when I last discussed it with him.

If I recall correctly, he paid roughly about $285/toz for gold and about $6/toz for silver at the time. That comes to a total purchase of approx. $309,000. If he sold at spot today (which I think he could do better), he'd be selling at $1,368/toz for the gold and $20.72/toz for the silver, for a total of approx. $1,450,000 and realize a "gain" of approx. $1,141,000 or about 369%. I know a lot of market players would sneer at those numbers (especially a lot of the Silicon Valley bubble guys), but for a "poor working stiff" like me, that'd be a FANTASTIC return for a less than 20-year run.

Of course, a badly kept secret is that not all bullion is equal. PM dealers' buy premiums vary from product to product (and also vary at any specific dealer from time-to-time) as do also their sell premiums, and when selling specific bullion products today to specific dealers it is possible to realize a greater gain than would be reflected in merely the change in the spot prices.

Had he "successfully played the GSR game" at opportune times or done a couple other things in the meantime, his theoretical gain could have been much greater.

For all I know he's quietly liquidated it all in the last few years since we last discussed it; for all you know I'm just pulling your leg and this is all a "tall tale" and it doesn't exist. In fact, let's just say it's all made up; this works just fine as a hypothetical example. To me, it doesn't matter if you believe me or not, but it would be nice if you'd at least acknowledge that it is very possible to "beat the market" with PMs.

By the way, how did you like those two videos I posted in my previous post? I thought the first video might be of particular interest to you.