SILVER

[TrueNorth]

Should I swap some (GM) gold for silver?

[G0ldfinger]

Should I swap some (GM) gold for silver?

If you traded the ratio properly you would do the opposite when it goes down. If you however expect short term wonders in silver, then it's a different gamble.

[Pixel8r]

Should I swap some (GM) gold for silver?

I wouldn't at the moment, the time to swap was when the GSR was in the 60's and 70"s.

 

I am currently around 65% silver 35% gold, swapped from 50/50 while the GSR was at 72 during the de-leveraging in 08.

 

If we get another round of de-leveraging with the stock market, gold and silver going down, I will then swap some of my silver back to gold. I would then wait for the ratio to get ridiculously high (above 70) before swapping back again. If we don't get another round I will just hold the silver as it will do better in inflation.

 

 

 

[G0ldfinger]

Given that chart, which has not been updated for the latest moves yet, the area around 50:1 and below is worth considering swapping. A sub 38:1 value would be a 30-year low in the g:s ratio, and hence definitely worth a consideration.

 

I wonder how many will have the balls to hold out for 20:1.

 

[TrueNorth]

Thanks.

[Pixel8r]

I wonder how many will have the balls to hold out for 20:1.

I will always try to keep at least 40% of my bullion in silver. I am just attempting to play the inflation/deflation cycles by swapping some metal at opportune times.

 

There is talk in the silverbug circles of the GSR actually going below 1:1

 

From:

 

 

[romans holiday]

So what sort of price..... when the inevitable correction comes.... are we expecting.

 

20...22?

[Pixel8r]

So what sort of price..... when the inevitable correction comes.... are we expecting.

 

20...22?

Looking to get back in?

 

 

[romans holiday]

Looking to get back in?

Sure, to trade the volatility.

[Pixel8r]

Sure, to trade the volatility.

You have missed this opportunity because you are fixated on deflation.

 

The thing to do was to swap gold to silver while it was high on the GSR then swap back when it is low and we get another round of de-leveraging, but not before. From memory you swapped out of silver when it was in the 60's on the GSR, far to soon IMO. We are just about to get another round of QE which means that de-leveraging won't be an issue for a while.

 

Swapping silver for dollars wasn't the correct thing to do, it would be big of you to admit it!

 

 

[romans holiday]

You have missed this opportunity because you are fixated on deflation.

 

The thing to do was to swap gold to silver while it was high on the GSR then swap back when it is low and we get another round of de-leveraging, but not before. From memory you swapped out of silver when it was in the 60's on the GSR, far to soon IMO. We are just about to get another round of QE which means that de-leveraging won't be an issue for a while.

 

Swapping silver for dollars wasn't the correct thing to do, it would be big of you to admit it!

Well, the thing is, as a [hyper] deflationist, I see more risk hanging over silver than gold. I've discussed this ad infinitum so will spare space from doing so again. Selling my silver for gold entailed reducing risk.... that risk still hangs over silver imo no matter what the price of the day is. That said, I'm not bearish on silver, just that I think it will be a lot more volatile to both the up and down side compared to gold.

 

Most my silver went to gold. Trading the silver/ gold ratio was left behind at this time [the ratio could easily snap back here]. For myself, I think it was also right to have swapped some silver for dollars as this remains a hedge against a large gold position. It's not about calculating present nominal numbers, but managing risk for the long run.

 

I think you need to see that there is no one correct position. What suits one person's strategy and temperament will not suit another's. And try to chill a bit.

[Pixel8r]

Well, the thing is, as a [hyper] deflationist, I see more risk hanging over silver than gold. I've discussed this ad infinitum so will spare space from doing so again. Selling my silver for gold entailed reducing risk.... that risk still hangs over silver imo no matter what the price of the day is. That said, I'm not that bearish on silver, just that I think it will be a lot more volatile to both the up and down side compared to gold.

 

Most my silver went to gold. Trading the silver/ gold ratio was left behind at this time [the ratio could easily snap back here]. For myself, I think it was still right to have swapped some silver for dollars as this remains a hedge against a large gold position.

 

I think you need to see that there is no one correct position. What suits one person's strategy and temperament will not suit another's. And try to chill a bit.

Oh well that is your decision, not right IMO. I think we are on the way to $30 as shown in the graph below, when maybe there will be another round of de-leveraging and a chance to trade the GSR again.

 

 

[frizzers]

Dr Solar,

 

I am looking for sub 100 gold ounces for UK house.

 

I based that comment purely on previous places where that chart has found support, ignoring fundamentals altogether. I like to do this sometimes to filter out the noise.

[DoctorSolar]

Dr Solar,

 

I am looking for sub 100 gold ounces for UK house.

 

I based that comment purely on previous places where that chart has found support, ignoring fundamentals altogether. I like to do this sometimes to filter out the noise.

 

Cheers Frizzers.

 

PS: still party time with the gold stock picks in your gold report. Great stuff!

[frizzers]

Cheers Frizzers.

 

PS: still party time with the gold stock picks in your gold report. Great stuff!

Thanks - even KEFI is up!

 

Can anyone tell me why $30 is such a big number for silver. Circa $25 I get, but people talk about $30 being a big number for silver, but historically I can't see why it is. I can see the upper trend line at that level too, and the fact that $30 is a big round number.

 

Here are some levels to think about:

 

Also an update on gold-silver ratio chart I posted in Moneyweek at point of break-out. Looks rather portentious now:

 

[warpig]

I'm not sure $30 is significant beyond your own remark. Trader Dan said recently that $25 is significant resistance, but if we break $25 then we could easily see $35.

 

Thanks - even KEFI is up!

 

Can anyone tell me why $30 is such a big number for silver. Circa $25 I get, but people talk about $30 being a big number for silver, but historically I can't see why it is. I can see the upper trend line at that level too, and the fact that $30 is a big round number.

 

[Pixel8r]

I'm not sure $30 is significant beyond your own remark. Trader Dan said recently that $25 is significant resistance, but if we break $25 then we could easily see $35.

I guess it's how quickly it happens. I would expect $30 to become resistance if it occurred over the next three months, just because of my graph above.

 

 

[G0ldfinger]

I guess it's how quickly it happens. I would expect $30 to become resistance if it occurred over the next three months, just because of my graph above.

Now with regular updates.

 

http://gold.approximity.com/since1999/Silver_USD_Pixel8r.png

[G0ldfinger]

Trying to get back under the red line.

[Perishabull]

What ratio do you think the gold/silver ratio could go to? I'm only in GM silver right now, I actually think there is a lot more upside to it than gold if a really serious hyper scenario develops, and that is appearing more likely as time goes on. I'm not as hardcore into PM's as some are, I have 33% of my liquid wealth in it. Gold already seems expensive (to those who don't understand it) but when I drop PM's into casual conversation no one seems to really understand why PM's are going up, I don't mention I have any so as not to influence people's opinions.

 

 

 

 

 

 

[frizzers]

[silverharp]

Silver will turn with the dollar, the chart below from Daneric's blog , look very similar to CC's Gold/Silver chart except it has already hit the trandline. I'd like to see a test of the dollar if we had a low this week.

 

http://3.bp.blogspot.com/_TwUS3GyHKsQ/TLdt...1600/dolalr.png

 

As for price levels wouldnt 26ish be the 50% retracement from the high in 1980?

 

[Perishabull]

I keep seeing charts posted of the GSR where below 30 or 40 isn't even on the chart;

 

People cite the history of gold as money but what about the history of the GSR?

 

If we study the Gold/Silver ratio over the last one thousand years here is what we find. From 1000 to 1250 the Gold/Silver ratio was around ten to one. From 1250 to 1850 the ratio was sixteen to one or less. So, for most of the last millennium the ratio has fluctuated between 10-to-1 and 16-to-1, but in cultures where both gold and silver were used as money. From 1850 to present the ratio has varied widely, hitting a high of 100 to 1 on two separate occasions. Once in the 1940-1941 time frame and once again in 1991.

 

Estimates of the present world gold supply vary but most agree upon a number of approximately 4 billion ounces. Of all the gold mined very little has been lost. In 1992, Charles River Associates, estimated world silver mining for all of recorded history yielded an amount of 38 billion ounces. This establishes a natural ratio of ten to one. What I mean by a natural ratio, is the ratio which both metals are found in nature. For every ten ounces of silver dug out of the ground one ounce of gold is dug out of the ground. In recent times the ratio has been tapering down and now stands at about a seven to one ratio.

 

From Silver-Investor.com

 

The above suggests silver is dramatically undervalued relative to gold. Note that over the last millenium the GSR was far closer to the ratio of gold to silver found in the ground, the natural ratio if you like.

 

Also;

 

Only a small third of production of silver comes from silver mines, one small third is produced by zinc and lead mines, one quarter by copper mines and eighth in gold mines. Experience; look for a mine that produced strictly for silver and you will see it is rare. Among the 15 first silver mines in the world, only two produce only silver.

 

From http://www.dani2989.com (Dr Thomas Chaize energy and mining newsletter).

 

In my view this is highly significant. So approx 58% of silver is mined as a byproduct of zinc, lead or copper mining. What this means is that if demand for industrial metals such as copper, zinc and lead falters then a reduction in mining for these metals results in a reduction of silver coming onto the market.

 

 

[Pixel8r]

Point & Figure chart for silver shows a double top breakout with a bullish target of $29

 

[carbon junkie]

Point & Figure chart for silver shows a double top breakout with a bullish target of $29