Gold tied with other PMs

[StackingItAll]

Hey maybe a silly silly question am I wrong to think that gold and silver tie together in market. Say gold goes up silver tends to as well. Only asking as gold doing better than since i started buying it around 940 today but silver lagging behind just can't get up and past that 11.20 mark and go on. Again maybe silly but If I don't ask I don't know

[MikeOxlong]

People always talk of the gold silver ratio which is higher these days than historically. In general gold and silver follow each other but not step by step, certainly not in the 4 years or so i have been interested in PM'S

[StackingItAll]

1 minute ago, MikeOxlong said:

People always talk of the gold silver ratio which is higher these days than historically. In general gold and silver follow each other but not step by step, certaintly not in the 4 years or so i have been interested in pms

Thanks @MikeOxlong good to know.

[Lowlow]

Sometimes it's also a currency effect - gold and silver can (sometimes) seem to be moving up or down in price when it's literally what they are valued in changing price, the currency.  You can usually tell when this happens because other commodities move in the same direction - wheat, corn, etc, though oil is often decoupled for other reasons.

[StackingItAll]

5 minutes ago, Lowlow said:

Sometimes it's also a currency effect - gold and silver can (sometimes) seem to be moving up or down in price when it's literally what they are valued in changing price, the currency.  You can usually tell when this happens because other commodities move in the same direction - wheat, corn, etc, though oil is often decoupled for other reasons.

I have noticed if say dollar down against other currencies then PMs seem to do better. Wondering what dictates price of them do all markets when open say China Japan Germany UK across globe do PM markets move during their opening or is it say American market dictating prices only.

[Lowlow]

4 minutes ago, Willike said:

I have noticed if say dollar down against other currencies then PMs seem to do better. Wondering what dictates price of them do all markets when open say China Japan Germany UK across globe do PM markets move during their opening or is it say American market dictating prices only.

It depends on the market - forex is an OTC market and trades around the globe, closing in one time zone, opening in another, with small breaks, but for the most part it is 24 hours a day and runs continuously as a market.  Forex is a trending market, but it reacts to news and interest rate changes.  Gold and Silver is a paper market (for the most part), and gets traded mostly as futures, or options on futures, or ETFs on the equity markets.  The rest of the commodities are mostly traded the same way, though often on different exchanges.

Currencies moving vs precious metals are not always easy to figure out, I mean it's not always easy to figure out which one is gaining or if either is, because it is possible for all currencies to gain or lose value.  These past few days have been a good example, as the equity markets have taken hits all around the world currencies are essentially becoming more valuable, and gold and silver are staying right there with them (at least for now).

It's all relative, there is nothing that actually has a completely stable value, and nothing makes a perfect measuring stick to measure the rest of the market's assets against.  We usually choose to measure everything in our own local currency, $us, £uk, €eu, etc, because that's what we naturally think of as the measuring stick because that's what we buy food, gasoline for vehicles, etc, in .. I personally tend to think of everything priced in silver, but nothing is stable, and it's dangerous to get hooked on measuring the markets in any one thing.  You see this a lot when a countries currency takes a big hit, a lot of people don't get out of their currency into something safer because all they can see is that "stocks, bonds, real estate, oil, and other commodities all got more expensive" ... they don't realize that it's actually their local currency taking a beating until it is too late.

As for market movements, it again depends.  Sometimes the markets all follow each other, sometimes they don't, it really depends on what the environment is like.  At the moment everything is reacting to the equity markets, and all of the equity markets are moving in unison, following each other down or up as the world turns, and at some point as the globe spins changing direction and then markets follow that until they change directions again.  That's also happening within individual markets, stocks are following each other (except for the fact that breadth has been languishing lately), what I mean is that if equities are up IBM, Microsoft, Amazon, etc, all follow each other and move together, and if down, they all go down, it isn't a very healthy sign and it is all being drive by the amount of central bank money sloshing around in the markets.  Healthy markets trade, up and down, and are usually decoupled internally (some stocks up, some down) and decoupled around the globe, when everything is moving together it is usually a bad sign, and that has been happening for about 15 years.

For PM's specifically a lot of the price movement happens in London and Europe, but they change in every market.  Like I said, it is also often a currency effect, so if currencies are reacting to something that can appear as price movement in the precious metals and other commodities, so sometimes gold and silver might "move", but it might really just be people rushing into treasuries because something is going on in the equity markets, like I said, it isn't always easy to figure out what is actually gaining value and what is actually losing value.

[StackingItAll]

13 minutes ago, Lowlow said:

It depends on the market - forex is an OTC market and trades around the globe, closing in one time zone, opening in another, with small breaks, but for the most part it is 24 hours a day and runs continuously as a market.  Forex is a trending market, but it reacts to news and interest rate changes.  Gold and Silver is a paper market (for the most part), and gets traded mostly as futures, or options on futures, or ETFs on the equity markets.  The rest of the commodities are mostly traded the same way, though often on different exchanges.

Currencies moving vs precious metals are not always easy to figure out, I mean it's not always easy to figure out which one is gaining or if either is, because it is possible for all currencies to gain or lose value.  These past few days have been a good example, as the equity markets have taken hits all around the world currencies are essentially becoming more valuable, and gold and silver are staying right there with them (at least for now).

It's all relative, there is nothing that actually has a completely stable value, and nothing makes a perfect measuring stick to measure the rest of the market's assets against.  We usually choose to measure everything in our own local currency, $us, £uk, €eu, etc, because that's what we naturally think of as the measuring stick because that's what we buy food, gasoline for vehicles, etc, in .. I personally tend to think of everything priced in silver, but nothing is stable, and it's dangerous to get hooked on measuring the markets in any one thing.  You see this a lot when a countries currency takes a big hit, a lot of people don't get out of their currency into something safer because all they can see is that "stocks, bonds, real estate, oil, and other commodities all got more expensive" ... they don't realize that it's actually their local currency taking a beating until it is too late.

As for market movements, it again depends.  Sometimes the markets all follow each other, sometimes they don't, it really depends on what the environment is like.  At the moment everything is reacting to the equity markets, and all of the equity markets are moving in unison, following each other down or up as the world turns, and at some point as the globe spins changing direction and then markets follow that until they change directions again.  That's also happening within individual markets, stocks are following each other (except for the fact that breadth has been languishing lately), what I mean is that if equities are up IBM, Microsoft, Amazon, etc, all follow each other and move together, and if down, they all go down, it isn't a very healthy sign and it is all being drive by the amount of central bank money sloshing around in the markets.  Healthy markets trade, up and down, and are usually decoupled internally (some stocks up, some down) and decoupled around the globe, when everything is moving together it is usually a bad sign, and that has been happening for about 15 years.

For PM's specifically a lot of the price movement happens in London and Europe, but they change in every market.  Like I said, it is also often a currency effect, so if currencies are reacting to something that can appear as price movement in the precious metals and other commodities, so sometimes gold and silver might "move", but it might really just be people rushing into treasuries because something is going on in the equity markets, like I said, it isn't always easy to figure out what is actually gaining value and what is actually losing value.

That is an amazing response thank you puts it all into perspective i had known that a lot was futures which i found odd as why buy something that isnt actually there. Would appear that there is an outside influence on PMs well specifically silver but i could be wrong. Can the prices be almost forced into a position i.e not allowed to find true value on an open market situation? 

[Lowlow]

Just now, Willike said:

That is an amazing response thank you puts it all into perspective i had known that a lot was futures which i found odd as why buy something that isnt actually there. Would appear that there is an outside influence on PMs well specifically silver but i could be wrong. Can the prices be almost forced into a position i.e not allowed to find true value on an open market situation? 

Paper PM markets are notoriously easy to rig and it's a constant topic of conversation with precious metals market analysts - everyone from the biggest market players to the craziest conspiracy theorists talk about the paper markets.

Here is a link to the U.S. debt clock (http://www.usdebtclock.org/), if you look on the far right at the bottom you'll see "Paper to Silver Ratio NOW" and "Paper to Gold Ratio NOW", and those are two calculated ratios for the amount of paper silver and gold that exists for each unit of actual gold and silver that exists.  So, for example, if it is 200, then that means there are 200 ounces of paper being traded for every actual ounce.

It's worth mentioning that the physical markets for precious metals can and do decouple from the paper markets, especially when there are large price movements.  This happened, for example, in 2008 / 2009, when the equity markets tanked and took the paper precious metals markets with them, silver and gold dropped dramatically in price.  But that didn't mean that people who actually owned real physical gold and silver were suddenly willing to sell for that paper price.  This price difference is expressed as "premium" (you'll often hear this term), .. premium can mean a lot of things, most often during peaceful times it is the amount you pay over the spot price for something that is beautiful and took a lot of time to create, so for example silver eagles have a higher premium than generic rounds, but it can also mean a premium paid for all physical over spot (and theoretically the opposite).  So to get to the point ... in 2008 / 2009 silver, for example, dropped by a huge amount in the paper markets, but you could literally not buy most silver products from precious metals dealers at all, or if you could find what you wanted, you paid a big premium over spot to get it, because nobody that actually had physical was willing to sell for spot price.  This "premium over (or under) spot" is just a convenient way for people to express the physical price in relation to the spot (paper) price without having to talk about two separate markets (spot and physical).  It's actually more complicated than that but it's a convenient shorthand.

I think if you asked many silver bugs they would claim that silver NEVER has a true open market valuation, that it has been subject to manipulation for most of its existence on the exchanges.  Famously there have been high profile cases of overt manipulation such as the Hunt brothers (https://www.investopedia.com/articles/optioninvestor/09/silver-thursday-hunt-brothers.asp) but many, many people believe there is manipulation going on right now, and that big money banks keep the price of silver suppressed.

[Martlet]

17 minutes ago, Willike said:

That is an amazing response thank you puts it all into perspective i had known that a lot was futures which i found odd as why buy something that isnt actually there. Would appear that there is an outside influence on PMs well specifically silver but i could be wrong. Can the prices be almost forced into a position i.e not allowed to find true value on an open market situation? 

There's a lot of nonsense about this, the answer depend on time frame.  Short term, over hours, a day or few, yes traders can and do manipulate prices.  Over longer terms, its not viable to hold large enough positions against the wider market, real supply and real demand will flush out manipulation in the end.  The gold market, unlike most others, is 24 hrs with trading passing from London to New York to Sydney and Hong Kong, back to London.  The daily price is mostly driven by traders running technical analysis, reacting to trends and patterns to a hundred strategies, and reacting to major news items.  Underlying long term trend is based on economic fundamentals.  Back to the original question, no, Gold is not tied to other PMs other than those long term trends.

[StackingItAll]

18 minutes ago, Lowlow said:

Paper PM markets are notoriously easy to rig and it's a constant topic of conversation with precious metals market analysts - everyone from the biggest market players to the craziest conspiracy theorists talk about the paper markets.

Here is a link to the U.S. debt clock (http://www.usdebtclock.org/), if you look on the far right at the bottom you'll see "Paper to Silver Ratio NOW" and "Paper to Gold Ratio NOW", and those are two calculated ratios for the amount of paper silver and gold that exists for each unit of actual gold and silver that exists.  So, for example, if it is 200, then that means there are 200 ounces of paper being traded for every actual ounce.

It's worth mentioning that the physical markets for precious metals can and do decouple from the paper markets, especially when there are large price movements.  This happened, for example, in 2008 / 2009, when the equity markets tanked and took the paper precious metals markets with them, silver and gold dropped dramatically in price.  But that didn't mean that people who actually owned real physical gold and silver were suddenly willing to sell for that paper price.  This price difference is expressed as "premium" (you'll often hear this term), .. premium can mean a lot of things, most often during peaceful times it is the amount you pay over the spot price for something that is beautiful and took a lot of time to create, so for example silver eagles have a higher premium than generic rounds, but it can also mean a premium paid for all physical over spot (and theoretically the opposite).  So to get to the point ... in 2008 / 2009 silver, for example, dropped by a huge amount in the paper markets, but you could literally not buy most silver products from precious metals dealers at all, or if you could find what you wanted, you paid a big premium over spot to get it, because nobody that actually had physical was willing to sell for spot price.  This "premium over (or under) spot" is just a convenient way for people to express the physical price in relation to the spot (paper) price without having to talk about two separate markets (spot and physical).  It's actually more complicated than that but it's a convenient shorthand.

I think if you asked many silver bugs they would claim that silver NEVER has a true open market valuation, that it has been subject to manipulation for most of its existence on the exchanges.  Famously there have been high profile cases of overt manipulation such as the Hunt brothers (https://www.investopedia.com/articles/optioninvestor/09/silver-thursday-hunt-brothers.asp) but many, many people believe there is manipulation going on right now, and that big money banks keep the price of silver suppressed.

Amazing stuff thank you it really feels like it is suppressed just does nothing each day. It's not of massive issue to me as long as no major crash as it's about preservation for me. Going to check out that debt clock looks very interesting.

[Lowlow]

14 minutes ago, Willike said:

Amazing stuff thank you it really feels like it is suppressed just does nothing each day. It's not of massive issue to me as long as no major crash as it's about preservation for me. Going to check out that debt clock looks very interesting.

I think you would enjoy this video.

 

 

[StackingItAll]

1 hour ago, Lowlow said:

I think you would enjoy this video.

 

 

Fascinating video thanks looks like it's us the retail buyers have a good chunk of the silver if this is a couple years old. Would be amazing if every working household did buy silver every month think would help the price. Not suitable to the now buyers I suppose but to anyone who has been sitting on thousands of ounces then wow. Good to know Bill gates can't have my silver though I will rest easy tonight knowing that

 

 

[Uksilverstackers]

Also Gold is listed as a Comodity and be bought and traded via Futures market, but its not really the same as a commodity, in the sense that it does not get used up like wheat, oil, coffee etc. Hence the Paper price ratio.

West (Paper) vs East (Physical) chart

Also regarding the currency aspect, take a look at this chart of JPY/USD for a close correlation....

 

 

 

 

 

[HawkHybrid]

On 18/10/2018 at 17:40, Willike said:

Only asking as gold doing better than since i started buying it around 940 today but silver lagging behind just can't get up and past that 11.20 mark and go on.

 

this should be enough proof that gold trades differently to

silver.

another example would be for the year 2017, what did gold do?

what did silver do? for a whole year?

 

you can choose the simple answer as verified by historical data,

or you can choose a complicated answer with all the conspiracy

theories, mass manipulation etc.

 

HH