What's going on with silver?

Discussion of the Gold portion of the Permanent Portfolio

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Vil
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Re: What's going on with silver?

Post by Vil » Fri Mar 20, 2020 8:33 am

Libertarian666 wrote:
Fri Mar 20, 2020 8:19 am
Don't mention this on bogleheads or they will be CERTAIN to inform people that they can't eat silver!
Promise, I will not. Stopped attending their forum once I realized (unfortunately, and not that I am ill) I may enjoy not that long life. And I think, long life is a must-have if one decide to follow their "common sense" advice. ;D
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Re: What's going on with silver?

Post by dualstow » Fri Mar 20, 2020 8:40 am

What does that mean? Had your genes analyzed and found a risky heart condition?
RIP Dusty Hill and be well, Bob Odenkirk
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Re: What's going on with silver?

Post by Vil » Fri Mar 20, 2020 8:58 am

Thanks for asking, but no, simply it does mean, I count on not seeing my important money (some people name them "money they cant afford to lose") disappearing with tremendous speed, and then waiting ages to recover. With those important money I prefer to have more gradual approach. Well, for sure there are guys in BH forum that really appear to know what they're talking about, and they're covering wide range of topics too, but the mantras they're repeating are just not for me.

Sorry, if what I am saying sounds too trivial or already said millions of times - simply I can't say anything else.
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Re: What's going on with silver?

Post by dualstow » Fri Mar 20, 2020 9:00 am

Ahh, I see. I’m glad that's not the case. Not trivial at all.
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Re: What's going on with silver?

Post by pmward » Sat Mar 21, 2020 5:32 pm

While I'm looking at spreads, you guys might find this interesting. This is the GLD to SLV weekly spread going all the way back to the start of 2007. A couple interesting things. First, since 2011 we have been in a very clean and defined channel of gold out performing silver. We just broke out above the channel. Most (but not all) channel breakouts eventually fail and come back into the channel. Second, we just set an all-time high on RSI of 90. The next highest RSI read was in Oct 2008 right before silver broke out relative to gold. There are a couple other RSI breakouts in between there that failed to mean revert, so no guarantees. But SLV is looking tempting if this starts to break down.
Screen Shot 2020-03-21 at 3.25.55 PM.png
Screen Shot 2020-03-21 at 3.25.55 PM.png (466.33 KiB) Viewed 3456 times
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Re: What's going on with silver?

Post by Vil » Mon Mar 23, 2020 3:53 am

Thanks for sharing it. Indeed, my understanding is the same as yours. I got well enough of it (ETF equivalent of ~100 kg), now have to do nothing and wait. Regarding the price - again I have a simplified view of how it works - I think the production cost cannot be beaten down in a sustainable manner and over long periods of time.
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Re: What's going on with silver?

Post by ochotona » Mon Mar 23, 2020 4:27 am

Vil wrote:
Mon Mar 23, 2020 3:53 am
Thanks for sharing it. Indeed, my understanding is the same as yours. I got well enough of it (ETF equivalent of ~100 kg), now have to do nothing and wait. Regarding the price - again I have a simplified view of how it works - I think the production cost cannot be beaten down in a sustainable manner and over long periods of time.
Ah, yes... the cost of production...

For oil it's important because every barrel of oil produced gets used. So if you go below cost of production, wells get shut in, and eventually the glut fixes itself.

But most gold ever mined is still in circulation; very little lost. So the price of production is not so relevant, because miners are "competing" against the entire world stock of gold ever mined from time immemorial.

Silver... somewhere in-between, because it' somewhat industrial, somewhat monetary.
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Re: What's going on with silver?

Post by Vil » Mon Mar 23, 2020 5:43 am

Do not disagree. Indeed, for Gold has read somewhere that more than 98% of the Gold ever mined since ancient times is still in circulation. For Silver its just the opposite - quite of it is kind of lost given its (IMHO) more of a industrial metal than monetary those days. And the price of recuperation from 'exhausted' goods is too high to be worth. Let's see, I am happy with my silver purchase even though not be able to see it (can play with some of my Austrian philharmonics to compensate ;D )
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Re: What's going on with silver?

Post by ochotona » Mon Apr 13, 2020 3:00 pm

The gold silver ratio is so compressed... 111:1 my goodness

I sold some AAAU and bought some silver miners... iShares SLVP ETF. Performs a bit better than SIL. Lower expense ratio.

At least if I'm going to get "paper silver" I might as well get some companies and dividends instead of whatever it is you get with a SLV. A promise.
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Re: What's going on with silver?

Post by pmward » Mon Apr 13, 2020 3:21 pm

ochotona wrote:
Mon Apr 13, 2020 3:00 pm
The gold silver ratio is so compressed... 111:1 my goodness

I sold some AAAU and bought some silver miners... iShares SLVP ETF. Performs a bit better than SIL. Lower expense ratio.

At least if I'm going to get "paper silver" I might as well get some companies and dividends instead of whatever it is you get with a SLV. A promise.
I'm playing silver as well, currently as a short-medium term mean reversion play, but if all continues to go according to plan I am hoping to promote the position to a longer term trend play. So far it's been working out well for me. I stuck with SLV though, because the miners are still stocks... and at the moment I'm weary of stocks in general (market beta can be a bully...), and weary of how the mining industry will be effected by the virus.
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Re: What's going on with silver?

Post by Ad Orientem » Fri May 15, 2020 1:50 pm

Silver +5.3% so far today. Gold up about .5%. Any idea whats going on? In a severe economic downturn, I would not expect much from silver which is an industrial metal as well as precious.
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Re: What's going on with silver?

Post by pmward » Fri May 15, 2020 2:05 pm

Ad Orientem wrote:
Fri May 15, 2020 1:50 pm
Silver +5.3% so far today. Gold up about .5%. Any idea whats going on? In a severe economic downturn, I would not expect much from silver which is an industrial metal as well as precious.
From a dark arts perspective, GLD is battling its overhead resistance at ~$165 today. Once it gets through that, it's likely to follow silver up. Fundamentally and historically speaking, look back at what happened post 2008. Silver was hit harder than gold in the liquidity squeeze. But coming out of the liquidity squeeze silver led gold all the way through the rest of the bull market phase. This is what is happening right now I believe, and was the reason I took on a silver position the moment I started seeing some relative strength vs gold. It's a repeat of that 2009 dynamic that I (and many other speculators) are hoping plays out, and in that dynamic SLV went from $9 all the way up to $48 so there is a lot of potential reward if we are proven right.

Oil is even more economically sensitive than silver, and it's been rallying lately too. Remember that markets look forward not backward (or even to the present for that matter). Economic data is likely to get better going forward, not worse. Silver also got really beaten down quite badly back in March. A lot of people feel like they missed the boat with gold, and that gold has already run up too much and that can scare away some buyers... but silver hasn't... there is still plenty of room for silver to play "catch up" and beyond. They may feel they missed the boat with gold, but they see that silver is just now leaving the dock.
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Re: What's going on with silver?

Post by mathjak107 » Fri May 15, 2020 5:02 pm

In 1987 I bought 2 100 ounce bars of silver .... I sold them in the 1980’s ...well here it is 2020 and they still have not even doubled from what is cost back then
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Re: What's going on with silver?

Post by Ad Orientem » Fri May 15, 2020 5:26 pm

mathjak107 wrote:
Fri May 15, 2020 5:02 pm
In 1987 I bought 2 100 ounce bars of silver .... I sold them in the 1980’s ...well here it is 2020 and they still have not even doubled from what is cost back then

Recency bias. Silver has been within spitting distance of $50 oz. The question is less where it is, than where it is going. And we have ample evidence that it can in fact go much higher in the right conditions. That said, given the industrial aspect of the metal, I remain skeptical as long as we are looking at the prospect of economic armageddon.
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Re: What's going on with silver?

Post by pmward » Fri May 15, 2020 5:57 pm

Unlike gold I also do not see silver as an "investment" or something worth holding for a long period of time. I think it's a wonderful trading vehicle though. When it gets volatile, boy does it get volatile, both in the upward and downward direction. If you can go long or short at the right time you can really make a killing.
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Re: What's going on with silver?

Post by mathjak107 » Sat May 16, 2020 3:46 am

Ad Orientem wrote:
Fri May 15, 2020 5:26 pm
mathjak107 wrote:
Fri May 15, 2020 5:02 pm
In 1987 I bought 2 100 ounce bars of silver .... I sold them in the 1980’s ...well here it is 2020 and they still have not even doubled from what is cost back then

Recency bias. Silver has been within spitting distance of $50 oz. The question is less where it is, than where it is going. And we have ample evidence that it can in fact go much higher in the right conditions. That said, given the industrial aspect of the metal, I remain skeptical as long as we are looking at the prospect of economic armageddon.

i paid 9 bucks an ounce in 1987 ... no recency bias here ... just an investment that sucked for decades
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Re: What's going on with silver?

Post by Ad Orientem » Tue Jun 23, 2020 1:25 pm

JM Bullion has 1 oz SilverTowne Buffalo Silver Rounds on sale(!) for $2.49 over spot. Holy crap. I bought a couple hundred of those back when silver was under $15 oz and with a mark up of .49 cents/oz. The premiums for physical bullion are insane. Haven't done much in metals this year, but if a rebalance becomes necessary I will be using IAU.
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Re: What's going on with silver?

Post by Ad Orientem » Tue Jul 14, 2020 6:16 pm

Creeping up on $20.
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Re: What's going on with silver?

Post by Ad Orientem » Mon Jul 20, 2020 11:38 am

Just blew through $20 resistance level.
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Re: What's going on with silver?

Post by Cortopassi » Tue Jul 21, 2020 9:18 am

And $21??!!

Image

I am positive on my physical silver cost for the first time in I think 9 years.

This continues to be surreal. Covid out there, but the PP and markets just seem to make daily highs. My pp is up 12.2% for the year (was -10.75% on March 19)
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Re: What's going on with silver?

Post by Ad Orientem » Tue Jul 21, 2020 11:13 am

Silver is at $21.45 as I type. A couple years ago, I opined that I thought a fair price for silver was in the $18-20 range. Of course that was pre-Covid and money printing to infinity. Another possible factor is there have been lots of rumors that silver production has been waning. With gold now firmly above $1800 oz people may be looking at silver as relatively cheap. Even with the recent run up, the silver gold price ratio remains very high by historical standards, though it has come down somewhat from its insane levels of near 100:1. I bought almost all of my silver below $15/oz when the bullion dealers were practically giving it away in terms of their markups and don't think I was ever negative for more than a few days. And that not by much.

I'm not ready to sell, but for the first time in a while it's entering my mind.
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Re: What's going on with silver?

Post by mathjak107 » Tue Jul 21, 2020 2:13 pm

it is only half the price it was from the 1970's lol .


i owned silver in 1987 and it was 9.20 an ounce ... 33 years it is about double .

i would say that sucked as an investment. glad i sold it decades ago
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Re: What's going on with silver?

Post by Libertarian666 » Tue Jul 21, 2020 2:30 pm

mathjak107 wrote:
Tue Jul 21, 2020 2:13 pm
it is only half the price it was from the 1970's lol .


i owned silver in 1987 and it was 9.20 an ounce ... 33 years it is about double .

i would say that sucked as an investment. glad i sold it decades ago
I bought silver in 1980 for $48/oz.
I sold it later that year for $22. Fortunately I had also bought a bunch at $5 so I ended up about even.
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Re: What's going on with silver?

Post by Ad Orientem » Tue Jul 21, 2020 3:10 pm

Silver is almost always a near to intermediate term speculation. Long term, silver has been in a bear market for around 600 years. That's not a trend I am inclined to make a long term bet against.
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Re: What's going on with silver?

Post by Ad Orientem » Tue Jul 21, 2020 8:27 pm

$23.00 at 9:27 PM Eastern US time. Holy bleep!
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