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OK. You got me. I will try this with 10%-20% of my physical. Nothing ventured...

Jake

 

Do this at your own risk. In all fairness, even during the Hunt run-up there was a little break inbetween. We didn't really have a break now for 8 months. So that is somewhat concerning. But if gold shoots up now, which quite a few commentators that I listen to seem to expect, any silver lagging/correction might be very subdued. Maybe silver would go down to $45, and just stay there, while gold could go to $1,800, bringing the ratio back to 40:1. Then silver could play catch up again. Would this be tradeable? Maybe almost not, also depending very much on your transaction fees, especially if we're talking coins or similar here.

 

For me, as an actual Silverfinger, the question here is whether I'll swap a little more, turning myself in a true Goldfinger again. Even if I did so, I'd still have a lot of silver left to ride the ratio down (20:1, 15:1, 10:1?) should it happen.

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Thanks GF. The amount of interest my obscure silver bullion is/was generating on eBay is/was mind boggling. Certainly seems to indicate the froth forming as Norcini indicates. But who knows. With nearly all the big pundits calling for a correction it looks like there are too many of them on that side of the boat too. Hmmm going to be an interesting few weeks for sure.

In the King World News weekly metals wrap Bill Hanes also said that they were almost overwhelmed by retail silver selling. But it is conflicting news. On the one hand people like you sell retail and there is huge demand. On the other hand there is massive selling at the retail level (see Bill Hanes). Then you have the rumours, like the one from Frizzer's London source, telling us that the Chinese or someone big is sucking it all up.

 

A run-up in silver like this usually ends in a loud bang. I am not sure whether we're at the bang yet. But the run-up has been huge, and there is no real short squeeze in the sense of a panic yet. The 2009 chart I posted yesterday indicates that we could still enter a vertical phase a la Hunt towards the end of this run-up, but it is not a given.

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Dan Norcini:

Note in this chart that there was an enormous spike November of last year too, and after a brief correction the silver rocket just continued its flight to da moon.

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I presume all this discussion about tops etc is only about A top not THE top?

 

Silver is going to $500 an ounce eventually. Sure we will get drops etc on the way, but there's nothing to worry about. The ride has only just begun (think gold ten years ago).

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I presume all this discussion about tops etc is only about A top not THE top?

Yes, 100% guaranteed.

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Expect The Gold To Silver Ratio To Hit Single Digits

 

Eric Sprott and Andrew Morris

 

...The US Mint, which is the world's largest silver and gold coin manufacturer, recently reported that it had sold 13 million ounces of silver coins and 370 thousand ounces of gold coins on a year-to-date basis.2 This means that the US Mint is now selling roughly equal amounts of silver and gold in dollars so far this year. Furthermore, bullion dealers like Sprott Money and GoldMoney have confirmed with us that they are now selling more silver than gold in dollar terms. For additional confirmation of this investment trend, just look at the flows for the two largest gold and silver ETFs. Investors have withdrawn approximately $3 billion from the GLD so far this year while the SLV has seen net inflows of $370 million over the same period. Dollar for dollar, investors are allocating as much if not more money to silver than to gold. And why shouldn't they? Silver is much more of a "precious" metal than the current ratio of 35-to-one would suggest.

 

To explain, we must first address mine supply. In 2010, the world mined approximately 736 million ounces of silver and 85 million ounces of gold.3 The world also produced an additional 215 million ounces of silver and 53 million ounces of gold from recycled scrap.4 Adding both together brings us 951 million ounces of silver and 139 million ounces of gold supply, for a ratio of nine ounces of silver to one ounce of gold.

 

Interestingly, this 9-to-one ratio is very similar to the ratio of available in-situ silver and gold reserves. The U.S. Geological Survey estimates that there are current in-situ reserves of approximately 16.4 billion ounces of silver versus 1.6 billion ounces for gold, or about a 10-to-one ratio...

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The Hunt for the Gold:Silver Low

http://gold.approximity.com/The_Hunt_for_the_Gold-Silver_Low.html

Over the past 8 months, silver has seen a spectacular run-up in price, taking it from $17/oz in August 2010 to an intraday high of almost $50/oz on Monday, April 25 2011. Correspondingly, the gold:silver price ratio has dropped over that period from a value of approximately 68:1 down to 31.44:1 at the time of writing. This is a drop of 53.82%, the biggest spike down in the gold:silver ratio since the Hunt spike in 1979. Back then, the ratio went from a value of approximately 33:1 down to 13.99 -- a drop of 56.61% in approximately 5 months time. Furthermore, silver is now in its 25% most expensive trading days since 1885 when compared to gold, with an average of the gold:silver ratio of 45.7:1 over the past 125 years.

...

there is very good reason to hold on to silver bullion even in the wake of this spike up in price.

...

The safe way for the small investor is to step by step reduce your silver exposure, and swap silver for gold, while the ratio is going down, and not to worry about out-trading the market.

...

Gold-Silver-Ratio_LOG_2804011_1968.png

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Jake

 

Do this at your own risk. In all fairness, even during the Hunt run-up there was a little break inbetween. We didn't really have a break now for 8 months. So that is somewhat concerning. But if gold shoots up now, which quite a few commentators that I listen to seem to expect, any silver lagging/correction might be very subdued. Maybe silver would go down to $45, and just stay there, while gold could go to $1,800, bringing the ratio back to 40:1. Then silver could play catch up again. Would this be tradeable? Maybe almost not, also depending very much on your transaction fees, especially if we're talking coins or similar here.

 

For me, as an actual Silverfinger, the question here is whether I'll swap a little more, turning myself in a true Goldfinger again. Even if I did so, I'd still have a lot of silver left to ride the ratio down (20:1, 15:1, 10:1?) should it happen.

No fears. I dont know if it is possible to do at the moment anyway (UK) and I will only be doing bars if I do, and only if I can get a good price and convert to gold. That's a lot of conditions. Plus my 'junk' just arrived today, lol.

To be honest I am not too fussed about missing 'a' top of sorts. I am prepared to wait for higher prices. Nothing has changed except the ratio. But thanks again. Your charts rock and scream and shout. It's been a lot of fun.

 

Terrific article btw.

The Hunt for the Gold:Silver Low

http://gold.approxim...Silver_Low.html

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Thanks. Will read.

 

EDIT: Read. Sprott truly is a silver bull! :)

He is really just following his mentor, Ian Gordon, and he says so himself. Fiat has had it, buy gold and silver. End of story.

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I have arranged to swap another smaller amount of silver for gold. I am now value-wise over 50% in gold again. I still hold a shed load of silver. Let's see how it will fare tomorrow morning when the LBM will be closed.

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I have arranged to swap another smaller amount of silver for gold. I am now value-wise over 50% in gold again. I still hold a shed load of silver. Let's see how it will fare tomorrow morning when the LBM will be closed.

Well, gold is at 1574 this morning, straight up 9 dollars and silver is 48 odd. Ratio at 32.23. Thinking about it 'value wise' I hold way more gold, silver has really only been my shtf plan/emergency money/barter/ teotw-whatever hedge so I shouldn't complain or worry about swapping. I am rather fond of it's function to use if necessary so as not to use the gold which would be way too expensive. I still think there is a lot of credence in that. Silver is very handy. Just thought I might try and get rid of a few or the bigger blobs of it. Darned heavy. ;)

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Recorded for posterity....

I have to admit to selling basically the last of my GM silver earlier today, now holding only my physical (still enough Kg's;- perfectly happy)

silvdrop.jpg

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Recorded for posterity....

If it keeps doing this for a few days in a row, I'll go back in... :)

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6 dollar drop instantly. Something is not right.

Maybe an attempt to use thinner trading since the LBM is closed?

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Recorded for posterity....

I have to admit to selling basically the last of my GM silver earlier today, now holding only my physical (still enough Kg's;- perfectly happy)

silvdrop.jpg

Blimey! Buying opportunity coming on. Hi-Lo silver.

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If it keeps doing this for a few days in a row, I'll go back in... :)

 

I thought the drop was due to you selling 5% of your silver :lol:

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Maybe an attempt to use thinner trading since the LBM is closed?

 

Would that explain why Au is going in the same direction Gf?

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I thought the drop was due to you selling 5% of your silver :lol:

:unsure: Remember last time? Something similar happened only minutes after I put in a trade. Creepy. :lol:

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Would that explain why Au is going in the same direction Gf?

A fund possibly sold proportionally both metals. The funny thing is that gold first went up, only to lose again immediately. It seems almost as if silver is leading here. Very interesting.

 

Need to go to bed, but this is gonna stay interesting tomorrow.

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