Tag Archives: silver

Key Moment for Gold-Silver Ratio

By Biiwii

[edit] By the way, you might want to check out this NFTRH 363 excerpt in which we go through some of Martin Armstrong’s views on gold and talk probably a little too much about my own.  :-(  Macrocosm Revisited

I have had a target on the gold-silver ratio of low 80’s to 90.  Then on Friday the GSR did this, putting that target in question (it hit 81, but I was thinking higher).

gold-silver ratio

Here it is today, converted to GLD-SLV…

Continue reading Key Moment for Gold-Silver Ratio

Silver Prices Spike, But…

By Monetary Metals

Silver Prices Spike, But What Demand?

For a few frenzied minutes, while everyone was sleeping, the price of silver spiked 56 cents. Well, at least the West Coast of America was sleeping. It began at 8:30 in New York, where presumably most traders were not sleeping. And of course, it was afternoon here in London (where Monetary Metals just held a seminar). The catalyst was a news release: the non-farm payroll numbers.

$0.56, or 3.8%, is a big move for a whole day. It happened in 15 minutes (and most of the move occurred during 3 distinct minutes).

In addition to the big price move, there is one other fact silver analysts are pondering. There is a real shortage of silver coins.

Let’s digress for a moment. We are not exactly known for our belief in the rumors that often swirl around precious metals. How do we know for sure that coins are scarce? We watch spreads. There is always a spread (called a premium in this market) between coins and spot silver. Here’s a graph of the Eagle premium asked by Monex.

Continue reading Silver Prices Spike, But…

NFTRH 363 Out Now

By Biiwii

We have been successfully managing an ‘in motion’ market since the August festivities kicked off.  It is October and Money Managers (NAAIM), Newsletter Writers (Investors Intelligence) are thoroughly spooked and Small Speculators are thoroughly short the market.  It’s a perfect contrarian setup.

Meanwhile, over in Goldbugsville there is a lot going on as well.  NFTRH 363 is 30 pages of commentary and in depth analysis on all of this and also gets its geek on (with the aid of FloatingPath.com‘s awesome graphical breakdowns) and gets inside the September Payrolls report in order to flesh out the dynamics in a flagging economy.

NFTRH 363, a very helpful market management report if I do say so myself… out now.

nftrh 363

Prediction: Gold and Ratio Up, Stocks Down

By Monetary Metals

[Biiwii comment: While I personally don’t like making predictions, I have put this post up regardless, because once I commit to a guest author I do not edit or filter their viewpoints.  FWIW however, I generally agree with Mr. Weiner’s assessment of the gold-silver ratio’s target as current NFTRH (and Biiwii) noted targets are ‘low 80’s to 90’; and we also are on a “stocks down” path currently.  Also see Catching Up on Some Gold Ratios just posted at NFTRH.com this morning]

The price of gold moved up moderately, and the price of silver moved down a few cents this week. However, there were some interesting fireworks in the middle of the week. Tuesday, the prices dropped and Thursday the prices of the metals popped $23 and $0.34 respectively.

Everyone can judge the sentiment prevailing in gold and silver articles for themselves, but we think there is a growing feeling of optimism (that is a renewed fall in the dollar, which most think is a rise in gold). This goes along with a sense that the long bull run in the stock market is rolling over.

Continue reading Prediction: Gold and Ratio Up, Stocks Down

The Mythical Silver Shortage

By Steve Saville

This post is an excerpt from a recent TSI commentary.

Excited talk of a silver shortage has made its annual reappearance. This talk is always based on anecdotal evidence of silver coins or small bars being difficult to obtain in some parts of the world via retail coin dealers. It never has anything to do with the overall supply situation.

Shortages of silver and gold in certain manufactured forms favoured by the public will periodically arise, often because of a sudden and unanticipated (by the mints) increase in the public’s demand for these items. Furthermore, the increase in the public’s demand is often a reaction to a sharp price decline, the reason being that in the immediate aftermath of a sharp price decline the metals will look cheap regardless of whether they are actually cheap based on the fundamental drivers of value.

These periodic shortages of bullion in some of the manufactured forms favoured by the public are not important considerations when assessing future price potential. The main reason is that the total volume of metal purchased by the public in such forms is a veritable drop in the market ocean. For example, the total worldwide volume of silver in coin form purchased by the public in a YEAR is less than the amount of silver that changes hands via the LBMA in an average trading DAY.

If gold continues to rally over the weeks ahead then silver will also rally. By the same token, if gold doesn’t rally over the weeks ahead then neither will silver. In other words, regardless of any anecdotal evidence of silver shortages at coin shops, silver’s short-term price trend will be determined by gold’s short-term price trend. Furthermore, if the gold price rises then the silver price will probably rise by a greater percentage, the reason being that the silver/gold ratio is close to a multi-decade low (implying: silver is very cheap relative to gold).

silver-gold ratio, a silver shortage?

A final point worth making on this topic is that the claims of silver or gold shortages that periodically spring-up are not only misguided, they are dangerous. This relates to the fact that the most popular argument against gold and silver recapturing their monetary roles is that there isn’t enough of the stuff to go around. The gold and silver enthusiasts who cry “major shortage!” whenever it temporarily becomes difficult to buy coins from the local shop are therefore effectively supporting the case AGAINST the future use of gold and silver as money. You see, a critical characteristic of money is that obtaining it is always solely a question of price.

Gold and Silver: Price Moves & Term Structures

By Monetary Metals

The prices of the metals moved up a bunch this week, with gold + $32 and silver +$0.55. We have seen some discussion of gold backwardation in the context of scarcity, and hence setting expectations of higher prices. That’s good, as the swings from contango to backwardation and back are the only way to understand changing supply and demand in the market.

You should be cautious about trading yesterday’s news. There was indeed backwardation in gold and silver. However, the cobasis is a sensitive indicator. It predicts the likely path of the price, but you should get an updated picture before buying based on an old reading after a sizeable price move.

In this Report, we’ll look at both metals bases, as well as their cobasis term structures. So read on…

First, here is the graph of the metals’ prices.

The Prices of Gold and Silver
letter sep 20 prices, gold and silver

We are interested in the changing equilibrium created when some market participants are accumulating hoards and others are dishoarding. Of course, what makes it exciting is that speculators can (temporarily) exaggerate or fight against the trend. The speculators are often acting on rumors, technical analysis, or partial data about flows into or out of one corner of the market. That kind of information can’t tell them whether the globe, on net, is hoarding or dishoarding.

Continue reading Gold and Silver: Price Moves & Term Structures

Elliott Wave Theorist, Free

By Biiwii

Robert Prechter’s August Elliott Wave Theorist is free, no strings.  I skimmed it and it is a big enough picture of the markets to be very applicable now.  A big review of Dow Theory and US stocks and gold, silver, miners, oil and commodities.

Say what you will about Prechter – and he certainly elicits strong feelings both ways – but he nailed crude oil going back to 2007.  He has infinite patience; maybe too much patience, it seems sometimes.

Anyway, the EWT is always an interesting read.  Go get it for free…

The Elliott Wave Theorist

elliott wave theorist, robert prechter

Gold, Silver & Horse Betting Report

By Monetary Metals

Consider the sport of betting on the sport of horse racing. It’s actually similar to the analysis of the gold and silver markets. How’s that?

First, there is the manic-depressive crowd. Sometimes (as we are told—we don’t hang out at race tracks) the bettors sometimes get overly excited about a horse with slim chances to win, or get totally unexcited about a strong horse. The track responds by lowering or raising the payout for winning, respectively. The more betting on a horse, the lower the payout.

The track does not care which horse is likely to win or not win. What it wants to do is take its rake from the total bets placed. It does this by making a spread between what it takes in on all the horses, and what it will have to pay out if any given horse wins. We don’t know the precise formula, but if horse X gets ¼ of the total bets then the payout if X wins had better be less than 4:1.

Continue reading Gold, Silver & Horse Betting Report

Gold and Silver Supply/Demand Report

By Monetary Metals

[biiwii comment: introducing a new, quality contributor to our exclusive short-list]

This was a fairly quiet week in the market for the metals, with a min-rally on Thursday especially in silver which hit almost $15. By the end of the week, the price of gold was down $13 and the price of silver was up 3 cents. The action was elsewhere (e.g. equities and currencies).

We don’t think that the price action necessarily tells us anything by itself. That’s why we look at it in the light of the basis action—the spread between spot and futures. What happened to the fundamentals of the metals this week? Read on…

First, here is the graph of the metals’ prices.

The Prices of Gold and Silver
letter sep 6 prices

Continue reading Gold and Silver Supply/Demand Report