GOLD

[savetheclaypigeon]

I too am trying to increase my ounces, to some success. The method I am using is swapping between metals using the gold silver ratio as my guide. That way you keep in the metals rather than cash which is being quantitively eased. Using this method involves trading once or twice a year, not once or twice a week, so reduces fees and the possibility of getting it wrong.

 

I agree that I am taking a long term approach to my investing in precious metals, short term fluctuations are not really important. I am more interested in the big picture.

 

Got a question for you Pixel8r, and for the rest of the guys...

 

What are your guideline ratios for swapping back and forth between metals?

 

I think romans holiday said he was looking for about 50:1 before switching from silver to gold. Do you, and everyone else for that matter, have similar ratios?

 

I ask as I've accumulated a healthy core position in metals now and the idea of trading the silver fluctuations to add to my gold makes a lot of sense to me.

 

[Pixel8r]

Got a question for you Pixel8r, and for the rest of the guys...

 

What are your guideline ratios for swapping back and forth between metals?

 

I think romans holiday said he was looking for about 50:1 before switching from silver to gold. Do you, and everyone else for that matter, have similar ratios?

 

I ask as I've accumulated a healthy core position in metals now and the idea of trading the silver fluctuations to add to my gold makes a lot of sense to me.

I am aiming to start swapping silver back to gold when the ratio gets back to 45, think we could see 35 on this swing though.

 

 

[romans holiday]

Got a question for you Pixel8r, and for the rest of the guys...

 

What are your guideline ratios for swapping back and forth between metals?

 

I think romans holiday said he was looking for about 50:1 before switching from silver to gold. Do you, and everyone else for that matter, have similar ratios?

 

I ask as I've accumulated a healthy core position in metals now and the idea of trading the silver fluctuations to add to my gold makes a lot of sense to me.

I am hoping to start swapping when we get to around 50:1. ... do not want to wait too long as you never now when the markets may next take fright which would see silver sell off more compared to gold. We have had a deflation scare, we are now in an inflation scare, who knows, we could see another deflation scare and then back again. Investors are split and confused and with that I reckon the silver/gold ratio could become a lot more volatile in the near future. Silver is more speculative than gold. It will do well on the inflation trade leading to a low ratio. When/if the markets sell off, a high ratio will be restored.

 

Personally, I like the idea of trading the ratio as there is always the possibility of being wrong in the investment area [though I believe I am most probably right ]

By trading the ratio, you can accumulate bullion while freeing up further capital/income [as a hedge] for investments or saving in another currency/s. For myself, I want to remain completely liquid and in a variety of currencies. For those that have completely lost faith in other currencies, they can use the ratio to accumulate while not having to be too concerned about nominal prices [i suspect though that even the most fervent gold bug is concerned about the price due to finite funds and the wish to accumulate as much as possible ].

 

I am selling most at 50 for gold [will keep some silver and buy some dollars also] and then buying back again at around 80. I think the particular ratio would come down to people's individual appetite for risk/speculation and I would imagine most would start "averaging" out at some point.

[G0ldfinger]

... What are your guideline ratios for swapping back and forth between metals? ...

There are no guidelines. Swapping it is trading, and trading is dangerous.

 

http://gold.approximity.com/gold-silver_watch.html

 

http://gold.approximity.com/since1968/Gold-Silver-Ratio.html

[Pixel8r]

There are no guidelines. Swapping it is trading, and trading is dangerous.

Agree strongly that there is a risk in any trading, for a start there is the commission that you lose instantly. I try to keep my metals within certain boundaries, never end up being all in one or the other.

 

Swapping 20-30% I feel to be about the right ratio personally, which should increase your metal and make up for storage fees at least.

[romans holiday]

Agree strongly that there is a risk in any trading, for a start there is the commission that you lose instantly. I try to keep my metals within certain boundaries, never end up being all in one or the other.

 

Swapping 20-30% I feel to be about the right ratio personally, which should increase your metal and make up for storage fees at least.

I consider the swapping of silver to gold the booking of profits. Silver is speculative, gold is safe[r].

 

If you think another round of deleveraging is possible/probable, you would want to swap most of your silver for gold beforehand.

 

I think we could see this sometime this summer when the dollar/bonds get into trouble. Bernanke and company could crash the markets to salvage the dollar.

[romans holiday]

 

Good long term graph here. I am only playing the gold/silver ratio on the back of investor perceptions of inflation. Silver could well go up along with stocks and other commodities on the inflation trade, but I expect this trade to quickly reverse at some point this summer. Jack be nimble....

[Mr Pipples]

There are no guidelines. Swapping it is trading, and trading is dangerous.

 

But you've got some of both GF - are you saying you reckon silver is more dangerous then gold?

[bitbigt]

Swapping it is trading, and trading is dangerous.

I see it rather differently:

 

Trading is about placing bets, and deciding when to rebalance those bets according to what you think is optimal.

 

But if you have any funds in any investment (e.g., gold or silver) then you're also placing a bet, and if you don't ever change the investment allocations then (even if you don't realise it) you are deciding that your investment balance is optimal.

 

So I would argue that some trading is more sensible than assuming that the investment plan you made on day-1 is optimum for evermore.

 

I would, however, criticise anyone who over-traded (i.e., anyone who is fickle and too uncertain in their view of things, so they keep changing their mind at a rate that the trading costs and spreads kill them)

 

The above argument holds not only for ones balance between silver and gold holdings, but PM vs any other asset class as well, even cash at times!

 

[ps. I've had a similar debate with people (who keep everything in the bank) who question why I bother so much with investing my money in various ways. I try to explain that they are choosing to put all their eggs in one asset class (cash), which at times can fall significantly in value. Trouble is, they'd mostly be like lambs to the slaughter should they start to manage their own investment portfolio with no knowledge of the game!]

 

[ziknik]

...

What are your guideline ratios for swapping back and forth between metals?

...

 

I’m going to swap silver for gold at Goldmoney.

 

10% at 50:1

12% at 45:1

14% at 40:1

And so on.

 

The percentage will have to grow a bit each time or I will be left with 30% of my original silver holding at 1:1

 

I might skip 50:1. lots of people swapping at this ratio will create resistance.

 

[G0ldfinger]

But you've got some of both GF - are you saying you reckon silver is more dangerous then gold?

If you trade it the wrong way then you'll end up with much less metal than at the beginning.

[savetheclaypigeon]

If you trade it the wrong way then you'll end up with much less metal than at the beginning.

 

Thanks for the input guys.

 

I take GF's point about the inherent risk but if you use your silver trading as a means of adding to an untraded core holding of gold, it seems unlikely that you'll get caught with your pants down, even in such a turbulent market.

 

A ratio of 50:1 seems to be the collective watershed. I think ziknik may well be proved right about a degree of resistance at this level.

 

I suppose an overshoot down to 35:1 would just be greedy

[Pixel8r]

Thanks for the input guys.

 

I take GF's point about the inherent risk but if you use your silver trading as a means of adding to an untraded core holding of gold, it seems unlikely that you'll get caught with your pants down, even in such a turbulent market.

 

A ratio of 50:1 seems to be the collective watershed. I think ziknik may well be proved right about a degree of resistance at this level.

 

I suppose an overshoot down to 35:1 would just be greedy

The way I play it is to check the gold price. When the gold price looks like it has reached a peak and is going through an significant correction, that may be the time to change.

 

Silver does appear to do better than gold while gold is going up, but also appears to lose a lot more when gold is going down. 2x the gain and 2x the fall.

 

 

[ziknik]

Thanks for the input guys.

 

I take GF's point about the inherent risk but if you use your silver trading as a means of adding to an untraded core holding of gold, it seems unlikely that you'll get caught with your pants down, even in such a turbulent market.

 

A ratio of 50:1 seems to be the collective watershed. I think ziknik may well be proved right about a degree of resistance at this level.

 

I suppose an overshoot down to 35:1 would just be greedy

 

Depends on your timeframe

 

http://www.greenenergyinvestors.com/index....st&p=110434

 

http://www.greenenergyinvestors.com/index....st&p=110448

 

 

[Steve Netwriter]

You may find some useful stuff here:

 

Gold versus Silver

Volatility & Swapping

http://www.greenenergyinvestors.com/index.php?showtopic=3127

 

 

[FWIW]

http://www.moneyweek.com/investments/preci...Money%2BMorning

 

appologies if posted already, but a good read.

[lowrentyieldmakessense(honest!)]

anyone been to Fort Knox

 

link

Murphy: At the GATA African Gold Summit, in May 2001, Frank Veneroso, who is a consultant of ours, delivered a brilliant presentation that said they would run out of gold in 7 to 10 years, based on his work. Well, that's about where we are.

 

In addition, European central banks can sell 9.7 tons of gold per week as part of the Washington Agreement. But they're not even selling 1 ton.

 

So we believe demand is 1,000 to 1,200 times greater than mined and scrap supply. That deficit was being met by the Gold Cartel's surreptitious selling of central bank gold. But now instead of getting 500 tons from the European central banks to help, their supply is drying up. They don't want to sell anymore.

 

Crigger: A few weeks ago, Brad Zigler wrote an article pointing out that banks have lopsided positions in all sorts of commodities contracts, and that large concentrations of short positions by banks are not necessarily an indication of manipulation. Do you want to comment on that?

 

Murphy: I totally disagree with that. As far as I know, there's nothing like it, in the sense of what J.P. Morgan and HSBC have in the silver market specifically. That concentration is far greater than any other position a bank or any other firm has. It's very abnormal to have this size of concentration for the open interest.

 

Crigger: What about platinum and palladium? In those markets, the banks only have short positions, right?

 

Murphy: That's basically what they have in the silver market also. But you're talking many banks, versus just one or two. Now if there were 10, 15, 20 firms with these positions, good for them. But in silver's case, it's just J.P. Morgan and HSBC. Their short position stands out far more than anyone else's.

 

Crigger: Assuming the price of gold has been kept artificially low, how much has the price been altered as a result? You threw out $2,000 earlier - where did that figure come from?

 

Murphy: This is a pretty commonly used number, even in the mainstream world. Had the price kept pace with U.S. inflation, it would be $2,300 per ounce, let's say between $2,000-$2,400 an ounce.

 

Back when we had our Gold Rush 21 Conference [in 2005], the price was $436, and I said it was going to take $3,000-5,000 an ounce price to clear the market. And I think that's the kind of price you're going to see in the years ahead. Once it takes out $1,000, gold's just going to take off like you won't believe.

 

Crigger: But what about manipulation? Won't that keep the price down?

 

Murphy: They'll lose control. That doesn't mean they won't do whatever they can to calm things down again, with whatever gold they have left. But that's the problem: They keep letting loose the gold they have left.

 

Nobody knows how much U.S. gold is left [in the U.S. Gold Reserve]. We're trying to find out through the Freedom of Information Act, and the Fed and Treasury won't tell us. They keep redacting or holding back information. Now if gold's just sitting there, and they've never done anything with it as they say, then what's there to hold back?

[TrueNorth]

I consider the swapping of silver to gold the booking of profits. Silver is speculative, gold is safe[r].

 

If you think another round of deleveraging is possible/probable, you would want to swap most of your silver for gold beforehand.

 

I think we could see this sometime this summer when the dollar/bonds get into trouble. Bernanke and company could crash the markets to salvage the dollar.

 

I have been thinking about this a lot recently, as my silver has out-performed my gold, and I felt the impulse to take profits.

 

I am kicking myself for not taking profits last week, when I broke the "50% profit" watermark in silver. That figure's down to 42% today.

[HPCsoYESTERDAY]

I have been thinking about this a lot recently, as my silver has out-performed my gold, and I felt the impulse to take profits.

 

I am kicking myself for not taking profits last week, when I broke the "50% profit" watermark in silver. That figure's down to 42% today.

 

 

a wee bit of profit taking for the traders that's all it is, the backdrop of a jump in the dollar index providing a means of holding cash

 

 

the silver bull has a long way to run yet

[nicejim]

As for trading silver for gold, someone mentioned the savings on storage costs but could there be an advantage in terms of capital gains too? I'm not sure how it's taxed when you're effectively bartering but I expect you'd be able to quote a price in your national currency. It's handy to be able to book a gain without having to be in cash for any period to show you're not "bed and breakfasting".

[Catflap]

Royal Mint is producing some nice limited edition coins to mark 500 years since Henry VIII ascended to the throne - as usual, very expensive:

 

http://news.bbc.co.uk/1/hi/uk/8089561.stm

 

[Pixel8r]

As for trading silver for gold, someone mentioned the savings on storage costs but could there be an advantage in terms of capital gains too? I'm not sure how it's taxed when you're effectively bartering but I expect you'd be able to quote a price in your national currency. It's handy to be able to book a gain without having to be in cash for any period to show you're not "bed and breakfasting".

Yes when you swap one to the other, you are basically selling one and taking a part of your capital gains allowance for the year, then reinvesting it.

 

 

 

[sideshow]

Although it is not particularly informative, I thought I would post the response from the TSA to my query regarding carrying gold through airports...

 

Is there any limit to the amount of physical gold I can carry through an airport on route to an international destination?

Does the $10,000 limit apply to gold? Is gold classed as a monetary instrument requiring declaration?

 

 

Thank you for your e-mail.

 

If you are carrying valuable items such as large amounts of currency, coins or jewelry, we recommend that you ask Security Officers to screen you and your carry-on luggage in private. This will maintain your security and avoid public scrutiny. We suggest that you ask to speak with a TSA screening supervisor before you are screened. Tell the supervisor discretely that you would like to be screened in a private location.

 

TSA operating procedures require a witness to be present during private screening. The witness may be another TSA Security Officer or someone that is traveling with you. If cleared, you and your valuables will be allowed to enter the sterile side of the airport.

 

We recommend that you carry these items with you at all times.

 

Please keep in mind that security screening at foreign airports is beyond TSA jurisdiction. Travelers must go through different clearance procedures when crossing international borders. Passengers and their baggage are also screened for security according to standards established by the Government of that country. As a sovereign entity, that country may establish its own security requirements for airports and air carriers that are not necessarily the same as those required in the United States.

 

We encourage you to visit our website at www.tsa.gov for additional information about the Transportation Security Administration (TSA) and the screening process. All travelers, and particularly those who travel infrequently, are encouraged to visit the section on travel tips before their trip. The website has information about prohibited and permitted items and guidance for special considerations that may assist in preparing for air travel.

 

We hope this information is helpful.

[electroweak]

Although it is not particularly informative, I thought I would post the response from the TSA to my query regarding carrying gold through airports...

So Nothing about exceeding the 10,000 (I thought it was GB pounds) limit?

(btw, what is a TSA - Terminal Security Agent?)

 

[FWIW]

http://www.moneyweek.com/investment-advice...Money%2BMorning

 

Quote I Like:

 

Another possibility is gold. If you had invested $100,000 in bullion coins ten years ago, selling off 5% at the end of each year to provide you with cash, by now you would have gold worth more than $200,000. In the meantime, you would have enjoyed an income – usually tax-free – totalling more than $71,000.