Gold and silver. Discuss - Page 19

I can't say anything with certainty, but I wouldn't be surprised if we hit 50, even 60. Then again I'd be just as unsurprised if we had huge volatile swings the rest of the year. Everyone's taking a bath right now except defense, the market is teetering. I don't see how another round of QE (by whatever name they give it) could not be in the works. IMO the commodities bull run is far from over. All the people who panicked and bailed will be buying back in at higher prices, nothing ever changes.

I'm gonna necro this thread.

Probably only Javyn will respond.

Some of you know that I buy and sell physical Gold, Silver, and Diamonds primarily as a hobby and something to do. This is what happens when the home building industry crashes ( at least for me ) and I am really too old to wait for the next true expansion to get back into home building.

The diamonds are no problem because I have an old friend in the business and anything I buy ( under his guidance ) he has been able to sell for a profit ( both wholesale and retail ). In effect I am really only a financial participant.

Gold and Silver are a little different. I have been buying physical Gold and Silver and making a small margin since I have access to true refiners that will pay 98% for the Gold and 90% for Silver.

It was something to do and I was making a few bucks at it. Really nothing substantial. If anyone here owns a decent home free and clear or a NYC or San Fran condo then they have more equity than I do.

But I recently have acquired more physical Gold and Silver than usual. The Gold is a standard mix. Some real crap, and some fine pieces. But crap or fine, they are almost always worth the same ( a % of spot ). Maybe I'll take a few pictures of the more interesting stuff.

The Silver is mostly flatware settings et. al. ( tea services, platters, etc. ) Maybe 15,000 grams. Also some various rounds but not too many.

Here is my question. This thread has been up for a while now. We have seen Silver go up really too fast ( to $49+ )and then crash to $33+ and then hover ( as I type it is $36.10/Oz ) Gold has gone up since the beginning of this thread but not much ( $1,541/Oz as I type ). But a little research reveals that for at least the last 45 days, Gold's strengthening has as much to do with the weakening of the dollar as with the demand for Gold.

So, right now, would you hold about $10,000 in physical Silver or sell? Same for Gold which is about $15,000 worth. I'd like to hear from those with different views and especially Levator Superioris if he sees this.

I've actually dreamed of a "Gold Crash", perhaps of up to 20% ( hey, it happened in Silver! ) and I would like to investigate one of those ultra short leveraged ETFs. What do you guys think?

I don't know, I'm responding as you predicted, but I'm holding more than 10K of physical silver right now, paid a little more than what it's currently at, but I'm not worried at all.

But I have all bars and rounds, if I had sterling sets, I'd probably be trying to unload that kinda stuff.

As far as gold, if I'm not mistaken, it's not dropping b/c there is way more above ground supply of gold, which makes it not as volatile and subject to the price swings we see in silver.

When gold is mined, it's saved. When silver is mined, most of it is consumed.

I would stay away from speculation and the ultra short ETFs because it's very difficult to time gold unless you're a macro guru. It's been going up for the past 20 years, let alone the beginning of this thread. I believe that we are seeing a gold bubble right now that will burst within the next year or two. Gold fever has been exhibiting the same patterns that we saw during the tech bubble and the real estate bubble. When you start hearing retail investors talk about buying an asset class (whether gold is an asset class is debatable) it usually means it's too late and that the peak is near. When compared to silver, it is way overvalued when compared to historical real rates (adjusted for inflation). Gold does not generate cash flows. It is only a form of security when you know that someone else will buy it for a higher price. It's not used much for any type of production (unlike silver). It's just a hunk of mineral that we've denoted as valuable. Numerous countries around the world hold gold in their reserves. They've been buying up a lot of gold over the past few years and have accumulated large quantities. If you take a look around you'll notice that the economy is still shit and many countries in the E.U. have needed bailouts or financial support. This may even take place in the U.S. if we can't get our shit straight. These countries need money, the price of gold is super high, and they have piles of it sitting around. What's the next logical thing to do? Sell. I don't know what will happen with gold but if you're looking for a quick buck, it really isn't the investment to do that with. Just some of my thoughts on gold

The EU Parliament just voted on May 25 to allow Greece to back it's debt with their 110T gold reserves. I'd say that's a pretty good confirmation that's it's a good liquid asset. In February, JP Morgan started accepting gold bullion as collateral.

Exactly - So once these countries need money - all they're going to do is start selling it which will drop the price. If you need money and you have gold lying around, what're you going to do with it? Look what happened with housing - a house used to be good enough to act as collateral too. (bad analogy, but we treated real estate like gold back then) Once gold is accepted as collateral, it will act as even more of a catalyst in the downward spiral. Let's say I put up $10mm market value of gold as collateral on a $20mm loan. If the gold starts devaluing and my collateral gets marked to market, I have to find a way to post more collateral. If you can't post the collateral, you default. Bank can take that collateral and sell it - further accelerating the downward decline.

Big day for javyn, after over 2 months waiting, my Silver Keiser rounds came in today.

Somewhat old news but bad Kitco bad. My pool account has been liquidated. I was really happy the court allowed Kitco to continue doing business while they are investigated for a supposed massive tax fraud scheme.

Wow!

Yeah my bullion guy called me and told me what was going on last week. He was running a pool account too and was wondering if all the assets were seized. Talk about an OF moment. Once I found out the court is allowing Kitco to continue daily ops i yanked all my money from them. My bullion guy did the same thing. If this investigation discovers hanky panky there will be no more Kitco. This is a prime example of the benefit of physically holding your metal. I wonder how many more such schemes will end up getting uncovered? JP Morgan was up to no good, now Kitco is in deep shit.....

OMG can ya link me? Maybe I'm naive but I wouldn't have expected something like this from Kitco

Google Kitco tax evasion.

This. I mean stocks, bonds, etc... you are forced to hold a piece of paper, but gold? It's worth having the physical metal any day over a flimsy piece of paper.

Figured there's be more talk here. What do you guys think? Gold and silver tarnished?

I say no, and am more excited than ever.

Swiss Franc is now being inflated, removing the only safe currency left in the world. Where else is there to go but metals? Cash? HAHAH

Also, this bubble talk is ridiculous. Sorry, but if people are saying something is in a bubble, as the mainstream media is doing now, IMO it means the opposite. Who would say gold and silver are in a bubble but someone who either 1) sold their position or 2) never had one in the first place. Doesn't sound like a bubble to me, and there is no rush to sell bullion. As a matter of fact, unsurprisingly, pawn and coin shops seem to be selling out of physical...again.

Yeah the price of gold is collapsing....back down to the long term trend line. Great buying opportunity JMHO. *shrug

I maintain my stance that a huge correction in PMs is on the way.

Maybe I put too much faith in markets, but I tend to think that markets are fairly efficient overall -- and that people will wake up to the fact that PMs are not safe assets. Cash and treasuries are safe -- nothing else is. That's just the simple reality. A safe asset does not lose 4% of its value in a single day. Nothing distinguishes precious metals from any other speculative investment vehicle. It's the simple truth.

And when things get really ugly -- when another recession hits, when money contracts and currencies start deflating -- there's going to be a serious sell-off as people wake up to the fact that they're holding a risky speculative investment no different from stocks.

But again, I am assuming that markets are efficient enough to realize this and act accordingly. Certainly this has been the case with bonds -- differentiating the true default risks from the meaningless hysteria quite efficiently, with sovereign currency nations maintaining low yields and monetary zone nations seeing skyrocketing rates -- but bond markets are much, much bigger than PM markets. So, we'll see.