Where is the price of Silver going?

[Rastus]

Silver went from $48 last week down to $35.64 this week.

Does anyones opinion change? Buy, sell, hold?

I'm waiting for below $32 to start buying again.  That's just me, not a financial recommendation.

Value is always a perception.  If you are hungry the value is in food.  There is always another economy on the other side of a failed economy...how to carry sweat equity from one to the next is the question.  Real estate is good, stocks of solvent companies are good, gold and silver is good...what is best depends on timing and what "the other side" looks like.  If a currency collapses, it's a sure thing that even a twinkie has more value than the old currency....so it's all relative and according to the timing.

For instance, if there is a collapse I like having food to eat and so will everyone else.  If everything is paralized for a few weeks then that bag of beans will be worth more than a Rolex to a starving banker....trade him out...then after everything gets square sell it back to him in the new currency and buy a whole bunch of beans....get the gist?  Stay away from advice from simple minded people who preach one thing or the other...recognize the changing dynamics of human/societal need.  Value changes dependent upon what cycle is occuring and where you are in it....so long as eveyone is fat dumb and happy metals stay low and that's when it makes the most sense, generally to get them.  At this point...I'm thinking of it as an insurance policy.  If it goes bad I have insurance, if the economy/currency does not fail or suffer greatly from right now....so what I lose money on insurance all the time.....

If you are looking to make money on metals or if you are looking for insurance or something else....determine your goals, identify your needs then finance it as you can.

[fullautovalmet76]

Silver went from $48 last week down to $35.64 this week.

Does anyones opinion change? Buy, sell, hold?

I'm still holding. Since a sharp sell off in silver just occurred, don't be surprised if it goes back up a bit. Keep an eye on industrial production, specifically in electronics and other industries that use silver in their manufacturing process. If their orders start to slow, you will see the demand for silver drop, which pull down the price even further.

For some perspective the price of silver in May 1994  was around $8.29 (inflation adjusted) per ounce. So if you want to know where a real floor might be, I would say around $9.00 per ounce might be an accurate estimate. As one can see we have a way to go before it gets there, if it does. But keep in mind why silver was that cheap. We were coming out of a recession, and we were in the midst of a deflationary period begun by Paul Volker back in the late 70s and early '80s.  Always interpret price movements in context of the macro economic and geo political events of the time.

[Rastus]

Also in the 60's and 70's governments called in their silver coins and melted them down creating a glut.  The glut was about to end when digital photos hit the scene...so it lasted a bit longer than anticipated.  Silver is consumed and consumption generally outstrips replacement at the low prices...with the prices of the last couple of years not so much.

[Solus]

Much of the demand for silver today maybe caused by folks looking for a better alternative than the Dollar.

I imagine most of us have heard the Doom and Gloom stories about how the US Dollar is going to go the way of the currency of Argentina with it's runaway inflation of the past many decades.

If they are right and inflation of the dollar reaches 30% and is going higher, it would be wise to by as much silver as you can get your hands upon, replacing investments in stocks or bonds or others dependent upon the dollar.

They are not really looking to grow their investment, just a way not to have it destroyed by inflation.

If $1 buys a loaf of bread now and silver is $35/oz and inflation takes the price of bread to $2 and the price of silver to $70/oz, you haven't gained any bread buying power, but you haven't lost the buying power you would have had you stayed invested in dollars.

If you believe we are headed for an inevitable economic crash with it's attendant inflation, buy all you can with your currently invested dollars.

If you think we will weather this economic storm with minor inflation,  treat silver as another type of investment, buying low and selling high.

The smart setup for investing in silver would be to create a Roth IRA for it and have a Roth IRA set up for your other money making investments.  With a Roth IRA you pay taxes on what you deposit but NO TAXES ever on what it earns and you withdrawal.

So, if you have good money making investments in a Roth IRA, consider buying silver for a Roth IRA with it's earnings.  You can transfer assets between Roth IRAs without penalty and can withdraw funds after age 55 without penalty if you have held it for 5 years or longer.  

Again, if I were an expert here and never missed a call, I'd be buying for the crowd.

[crusader rabbit]

I believe we are going to see some continued fluctuation in both silver and gold prices.  However, that said, I believe the longer term thinking  sees both going higher. 

Silver is a good choice for several reasons.  Because the current silver price is relatively low in comparison to gold, silver coins are more readily exchangeable for goods and services than even small gold coins.  As an example, a silver dollar has value as an ounce of silver, or now about $35.  The smaller gold coins are normally 1/10 of an ounce of gold.  At $1500/ounce, even a diminutive gold coin is valued at $150.  Silver dimes, quarters and half-dollars have significantly lower values due to the amount of silver contained therein.  So, if you need to bartar for something like a loaf of bread or a kilo of rice or a six pack of comfort, a silver coin or two will do the job.  A small gold coin is too much overkill and will not be as readily tradeable.

Further, silver has value as an industrial commodity.  Manufacturers use incredible amounts of silver for various applications. There is a finite amount of silver on this old globe of ours, so as the available silver is used, the remaining will of necessity increase in value.  Sure, we are recycling some of it, but much of the industrial silver is lost forever.

As I mentioned in an earlier post, neither silver nor gold are for nervous investors interested in short term profits. The dailly prices will keep you up at night.  But, if the dollar continues to lose value, these two commodities do represent long term stability and may give you a leg-up after the crash.

Just don't forget to invest in rice and beans and beans and rice so you can stay alive to spend your wealth.

[Sponsor]

[Rastus]

Save advice from oth Solus and the crusading bunny.   

Yup, silver would be the commodity to use for day to day trading.  Gold would be a small amount, difficult to assay, at least initially and hard to make change for...you want a loaf a bread, a gallon of milk and a pound of baloney and even 1/10 ounce gold is a problem.  The same thing can be had with a few dimes, a quarter or so in silver and the old silver coins are readily recognizable.

Yeah, rice and beans, flour etc..like in an earlier post on another subject.  You don't live well, but one person can survive for a year on 200 lbs rice, 200 lbs beans and about 50 lbs of flour.  Not much of a diet, but in today's price and job environment that's about as cheap as you can get and live for a while.  Of course throw in some sugar, salt, vitamins, etc....some canned meat is would be nice.   

[david86440]

I'm thinking with silver prices down this week and my Mosin stuff on eBay doing really well, I'll be able to buy back some of the silver I sold last week at $50.00/oz.

[billt]

Silver went from $48 last week down to $35.64 this week.

A lot of this has been caused by George Soros selling out a lot of his position. Also the COMEX has changed their margin buying guidelines because the price has become so inflated in such a very short time. Remember, silver was trading at $16.00 a year ago. We've had some inflation, especially with fuel and food, but a lot of goods have gone down. Electronics, many firearms, as well as ammunition are far cheaper today than they were just a year or two ago.

http://seekingalpha.com/article/267650-soros-other-hedge-fund-managers-dumping-precious-metals

We should be looking at sub $20.00 silver right now, not $36.00 to $47.00 silver. It is grossly overpriced at the moment. This is a lot like the silver run in the 80's by the Hunt brothers. The difference is back then you had a Texas billionaire, (Nelson Bunker Hunt), heavily leveraging silver in an effort to artificially run up the price. Today you have another billionaire, (George Soros), doing much the same thing except his intention is not to corner the market on silver the way the Hunt brothers tried to do.

When these guys do this type of thing a lot of neophyte investors get sucked in, buying all the way up. Most will inevitably get burned big time. Soros is already dumping, so expect the price to fall even more in the not too distant future. It may take a little longer this time because you have a lot of doom and gloom people buying it in the belief the economy is going to crash. That, along with TV ads appearing every 10 minutes telling everyone to buy because of how great it is, (gold & silver).

It most likely won't crash and burn the way it did in the 80's because Soros doesn't have the extremely large position the Hunt brothers did. Also he is not as heavily leveraged, and is selling off at a much more controlled rate. With that said their won't be enough common folk buying to support the price. Remember with most any commodity, when the sheep are buying, you should already be selling. When the short order cook at Denny's is talking about investing in silver, the plateau has already been reached. In commodity trading by the time the "news" leaks out, the run is over.  Bill T.

[Big Frank]

I just took delivery today of some silver dollars that I ordered before the price went down.    They cost a pretty penny but each one is graded MS-70, which is perfect. These flawless dollars should be worth something to collectors even if silver goes down again. I'm keeping my fingers crossed.

[crusader rabbit]

Frank, I'm thinking you have it pretty close to right.  My modest position in gold is all US coinage, so no assay is needed, and it has dopubled  in value since my purchase some years ago.  Silver dollars are exactly the same thing.  If everything DOESN'T go to heck, you still have something of value to any collectors.