What's going on with silver?

Discussion of the Gold portion of the Permanent Portfolio

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ochotona
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Re: What's going on with silver?

Post by ochotona » Sat May 18, 2019 7:08 am

Andrew Hecht wrote on Seeking Alpha:

"As the quarterly chart highlights, the range over the past forty-five years has been from 15.47 to 93.18 with an average of 54.325. When the price relationship moves below 55:1, silver tends to be historically expensive compared to the price of gold. The last time the ratio was below the midpoint was in 2012. When it is above the midpoint level, silver is historically cheap compared to gold and these days, what is cheap is getting cheaper by the day."

I think we'd need silver in the $13s for the ratio to hit 93. Like the 2015 low, $13.70.

As equities were crashing in 2008, silver went briefly below $10. Maybe people needed to sell stuff to pay obligations related to everything else crashing.

$10 silver, $1000 gold?
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Re: What's going on with silver?

Post by Ad Orientem » Fri May 31, 2019 2:30 pm

Gold $1310.90
Silver $14.56

Silver Gold price ratio = 90.03:1

Holy crap!
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Re: What's going on with silver?

Post by ochotona » Fri May 31, 2019 6:04 pm

The 45 year high is supposedly 93.18
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Re: What's going on with silver?

Post by Ad Orientem » Wed Jul 10, 2019 11:46 pm

And we are at 93.12...

I am starting to seriously consider swapping some gold for silver.
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Re: What's going on with silver?

Post by ochotona » Thu Jul 11, 2019 12:07 pm

Ad Orientem wrote:
Wed Jul 10, 2019 11:46 pm
And we are at 93.12...

I am starting to seriously consider swapping some gold for silver.
My new 100 oz silver bar is great. I got it for only $0.75 over spot (per ounce). Maybe they'll ship bars to you.

http://www.houstoncoins.com
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Re: What's going on with silver?

Post by Ad Orientem » Thu Jul 11, 2019 3:16 pm

ochotona wrote:
Thu Jul 11, 2019 12:07 pm
Ad Orientem wrote:
Wed Jul 10, 2019 11:46 pm
And we are at 93.12...

I am starting to seriously consider swapping some gold for silver.
My new 100 oz silver bar is great. I got it for only $0.75 over spot (per ounce). Maybe they'll ship bars to you.

http://www.houstoncoins.com
I picked up 3 kilo bars a couple of months back when silver was once again under $15 oz. I've always wanted a 100 oz bar. :P
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Re: What's going on with silver?

Post by dualstow » Thu Jul 11, 2019 3:29 pm

They should make a 50 kg bar that lazy thieves would have to ignore.
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Re: What's going on with silver?

Post by Ad Orientem » Tue Jul 16, 2019 7:18 pm

This guy is a trader so I'd take a lot of what he is saying with a grain or three of salt. But his broader observations on the relative valuations of gold and silver sounds like he has been reading my posts on this thread.

https://www.kitco.com/news/video/show/K ... Kitco-NEWS
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Re: What's going on with silver?

Post by Ad Orientem » Thu Jul 25, 2019 5:43 pm

Silver gold price ratio has dropped near 10% from its recent high of 93:1. I'm wondering if this is a blip, or if it's the beginning of a major recovery. Hmmm...
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Re: What's going on with silver?

Post by dualstow » Thu Jul 25, 2019 7:49 pm

Ad Orientem wrote:
Thu Jul 25, 2019 5:43 pm
Silver gold price ratio has dropped near 10% from its recent high of 93:1. I'm wondering if this is a blip, or if it's the beginning of a major recovery. Hmmm...
There was an article in the Wall Street Journal (paywalled) saying that so far, other precious metals have lagged but that gold could very well bring silver and platinum up with it. I have already seen positive articles about platinum and palladium pretty recently, though (as if platinum has *not* lagged), so as with the stock market, one has to choose to focus on the news pointing upward or the news pointing downward.
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Re: What's going on with silver?

Post by Someguy » Wed Jul 31, 2019 8:13 pm

What do you think about this "silver" PP in transition to a standard PP:

- 25% Stocks
- 25% Bonds
- 25% Cash
- 25% Silver (because of the ratio)

When I need to rebalance, I sell silver (if more than 25% in that moment) or I buy gold (if silver less than 25%). When I need to rebalance again, I sell silver (if both metals are more than 25%) or I buy gold (if both metals are less than 25%).

In a few years there will not be silver in the portfolio.
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Re: What's going on with silver?

Post by Ad Orientem » Wed Jul 31, 2019 9:13 pm

Someguy wrote:
Wed Jul 31, 2019 8:13 pm
What do you think about this "silver" PP in transition to a standard PP:

- 25% Stocks
- 25% Bonds
- 25% Cash
- 25% Silver (because of the ratio)

When I need to rebalance, I sell silver (if more than 25% in that moment) or I buy gold (if silver less than 25%). When I need to rebalance again, I sell silver (if both metals are more than 25%) or I buy gold (if both metals are less than 25%).

In a few years there will not be silver in the portfolio.
Not wild about it unless you are living in a place where its illegal to own gold. I own a little silver as a VP speculation. But silver is not a good substitute for gold. For one thing it's not a pure precious metal play. Silver is both a precious metal and an industrial metal. That means its price can be effected by different factors including a general slow down in the economy.
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Re: What's going on with silver?

Post by Cortopassi » Thu Aug 01, 2019 7:57 am

Agreed, AO, as the last 13 years have shown. Nice to have some, ideally to rebalance some gains, but not 25%

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Re: What's going on with silver?

Post by ochotona » Fri Aug 02, 2019 11:27 am

gold silver ratio getting close to 90 again
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Re: What's going on with silver?

Post by dualstow » Fri Aug 02, 2019 2:04 pm

ochotona wrote:
Fri Aug 02, 2019 11:27 am
gold silver ratio getting close to 90 again
It's been asked before- does the ratio mean anything?

I don't suppose there's a place out there where one can trade silver for gold and vice versa, with less friction?
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Re: What's going on with silver?

Post by Ad Orientem » Fri Aug 02, 2019 3:41 pm

From an historical perspective silver looks significantly undervalued relative to gold. But that's no guarantee. And even if it is cheap, it could be a while before the gap closes. If your looking for a place to make a speculative wager less all the extra premiums and other issues that come with physical, I'd consider SLV.
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Re: What's going on with silver?

Post by ochotona » Fri Aug 02, 2019 4:06 pm

Physical silver is a costly trade. My 100 oz bar is a fetish object. I'm only buying one. Agree on SLV.
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Re: What's going on with silver?

Post by Libertarian666 » Fri Aug 02, 2019 9:18 pm

dualstow wrote:
Fri Aug 02, 2019 2:04 pm
ochotona wrote:
Fri Aug 02, 2019 11:27 am
gold silver ratio getting close to 90 again
It's been asked before- does the ratio mean anything?

I don't suppose there's a place out there where one can trade silver for gold and vice versa, with less friction?
Harry Brown didn't think the ratio meant anything.
I agree with him.
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Re: What's going on with silver?

Post by pmward » Sat Aug 03, 2019 8:50 am

Libertarian666 wrote:
Fri Aug 02, 2019 9:18 pm
dualstow wrote:
Fri Aug 02, 2019 2:04 pm
ochotona wrote:
Fri Aug 02, 2019 11:27 am
gold silver ratio getting close to 90 again
It's been asked before- does the ratio mean anything?

I don't suppose there's a place out there where one can trade silver for gold and vice versa, with less friction?
Harry Brown didn't think the ratio meant anything.
I agree with him.
I don't think it's a coincidence that the more industrialized of a commodity it becomes, the more divorced it becomes from gold, and the more record gold to silver ratio spreads we hit. I think that silver is apt to correlate more with the likes of platinum, palladium, and the other industrial metals vs gold these days. It's actually easier for me to assume that the record spread is because of the fundamental shift in the silver markets over the last couple decades vs thinking this arbitrary indication means that it's cheap and going to perform well. Gold has taken off and silver is still languishing. I see no fundamental reason why this has to change, or even why it should change. Should silver start to break out it might be worth making a short term tactical momentum play in the VP. But I think that allocating the gold portion of the PP itself away from gold to silver, especially the entire lot, just seems silly and completely breaks the point. Browne specifically chose gold because it is a monetary metal and not an industrial metal.
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Re: What's going on with silver?

Post by Libertarian666 » Sat Aug 03, 2019 6:03 pm

pmward wrote:
Sat Aug 03, 2019 8:50 am
Libertarian666 wrote:
Fri Aug 02, 2019 9:18 pm
dualstow wrote:
Fri Aug 02, 2019 2:04 pm


It's been asked before- does the ratio mean anything?

I don't suppose there's a place out there where one can trade silver for gold and vice versa, with less friction?
Harry Brown didn't think the ratio meant anything.
I agree with him.
I don't think it's a coincidence that the more industrialized of a commodity it becomes, the more divorced it becomes from gold, and the more record gold to silver ratio spreads we hit. I think that silver is apt to correlate more with the likes of platinum, palladium, and the other industrial metals vs gold these days. It's actually easier for me to assume that the record spread is because of the fundamental shift in the silver markets over the last couple decades vs thinking this arbitrary indication means that it's cheap and going to perform well. Gold has taken off and silver is still languishing. I see no fundamental reason why this has to change, or even why it should change. Should silver start to break out it might be worth making a short term tactical momentum play in the VP. But I think that allocating the gold portion of the PP itself away from gold to silver, especially the entire lot, just seems silly and completely breaks the point. Browne specifically chose gold because it is a monetary metal and not an industrial metal.
Yep.
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Re: What's going on with silver?

Post by Ad Orientem » Wed Aug 07, 2019 2:04 pm

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Re: What's going on with silver?

Post by Mike59 » Fri Aug 09, 2019 5:28 am

In my experience precious metals trading is best done by relative valuation compared to a long term mean. I use a 50 month SMA. As it stands silver is on my watch list and I would say it's neutral (close to it's 50 month SMA), I've been loading up on Platinum in the last year in my VP and I see much more upside there.

Having said that, my PP gold allocation has outperformed the other VP holdings big time and I'm thankful that of my total investments VP is only about 10%, it is gambling at the end of the day. These other metals will have their day in the sun, likely further along in gold's bull market when enthusiasm spills over into all the other metals.
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Re: What's going on with silver?

Post by Ad Orientem » Tue Aug 27, 2019 10:32 am

Silver has breached $18.00 oz.
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Re: What's going on with silver?

Post by dualstow » Thu Aug 29, 2019 2:47 pm

Two detectorists in England found enough Norman silver coins to give Ad O a treasure bath -

https://www.bbc.com/news/uk-england-somerset-49487078
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Re: What's going on with silver?

Post by Kriegsspiel » Thu Aug 29, 2019 3:40 pm

dualstow wrote:
Thu Aug 29, 2019 2:47 pm
Two detectorists in England found enough Norman silver coins to give Ad O a treasure bath -

https://www.bbc.com/news/uk-england-somerset-49487078
That's cool as shit, coins with William the Conqueror and King Harold.

This part is a big downer though:
Under the Treasure Act 1996, finders of potential treasure in England, Wales and Northern Ireland are legally obliged to notify their local coroner
An inquest then determines whether the finds constitute treasure
The act contains a number of definitions of "treasure", including prehistoric objects, coins that contain gold or silver and are at least 300 years old, or more recent valuable objects that have been deliberately hidden
If the find is declared treasure, the finder must offer it for sale to a museum at a price set by the British Museum's Treasure Valuation Committee
Hmm, I wonder what they think a fair price is?
If the hoard is officially declared as treasure, the Roman Baths in Bath hopes to acquire the coins.

Stephen Clews, from the Roman Baths, said: "If you look at the true value of this, it's about 500 sheep - that's what you would have been to able to buy with them about 1,000 years ago.

"So what we need to do is translate that into some sort of modern value."
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH
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