Is it time to convert your gold to silver?.

[DarkChameleon]

7 minutes ago, HawkHybrid said:

 

gold is a good hold.

silver is an awful hold.(just ask anyone holding since

2011. or maybe since dec 2015. in fact ask anyone who

has bought any time in the recent multiple decades that

the gsr has been rising. you need a crystal ball to

successfully trade the gsr.)

 

I'm beginning to think that some forum members are

unwilling to disclose personal interest in promoting

physical silver.

there are so many problems with holding physical

silver. you can hold gold, trade paper silver etc.

there are many better alternatives.

why would anyone move from a winning trade(gold)

to a losing trade(silver)?

 

HH

It's been a long time since the $1800 gold days..people were waiting in line at stadiums to sell their gold at $1000 ...im seeing people sell their jewelry right now in my LCS so it's not a certain gold holding deal right now...sometimes taking money off the table is the deal...maybe it does take 10 years before silver hits even $30 but will gold ever hit $2600?.

[Abyss]

43 minutes ago, DarkChameleon said:

but will gold ever hit $2600?. 

Yes within my lifetime gold will hit $2600 of that I am certain. Uncertainty is the not will it but the time horizon that it will take for $2600 oz Gold 5 years, 10 years, 50 years from now.....

[HawkHybrid]

57 minutes ago, DarkChameleon said:

maybe it does take 10 years before silver hits even $30 but will gold ever hit $2600?.

 

that's a bit biased. silver only has to get to 60% of it's

2011 highs yet the comparison with gold is that it

needs to exceed it's 2011 highs by over 30%.

 

57 minutes ago, DarkChameleon said:

sometimes taking money off the table is the deal

some are still averaging in the red. (that's for gold only,

by bullion value almost everyone should be averaging

red on their silver)

unless the odds are favouring a new bull market, there

is little reason to sell physical gold to buy physical

silver. for those whose goal is to hold more gold it

doesn't make sense to go backwards.

 

HH

[DarkChameleon]

16 minutes ago, HawkHybrid said:

 

that's a bit biased. silver only has to get to 60% of it's

2011 highs yet the comparison with gold is that it

needs to exceed it's 2011 highs by over 30%.

 

some are still averaging in the red. (that's for gold only,

by bullion value almost everyone should be averaging

red on their silver)

unless the odds are favouring a new bull market, there

is little reason to sell physical gold to buy physical

silver. for those whose goal is to hold more gold it

doesn't make sense to go backwards.

 

HH

$2600 is gold value now doubled, $30  is silver doubled.... $30 seems more realistic then $2600 gold to me....I asked this question because this is after all called the silver forum, not the gold forum.

[mr-dead]

44 minutes ago, DarkChameleon said:

$2600 is gold value now doubled, $30  is silver doubled.... $30 seems more realistic then $2600 gold to me....I asked this question because this is after all called the silver forum, not the gold forum.

$2600 gold is not insane when its value is measured in monopoly money that takes no more effort than a few key strokes to create.

[HawkHybrid]

1 hour ago, DarkChameleon said:

$2600 is gold value now doubled, $30  is silver doubled.... $30 seems more realistic then $2600 gold to me....I asked this question because this is after all called the silver forum, not the gold forum.

 

that's not how markets work.

why is it that silver attracts more premium to buy

including delivery etc than gold?

there is spread, risk/reward and all sorts to consider.

if silver is currently such a good buy then why don't

you sell all your gold for silver? why stop there?

look at all those hyping that silver was such a better

buy than gold in dec 2015, 3 years on who's got the

better buy. theory is irrelevant, what actually happened

in reality?

 

you're being unrealistic by how you phrased you argument.

for gold to break it's former highs takes a bull market. it's

true silver will probably double to $30 before gold doubles

to $2600. the same argument can be made in 2014

when silver was at $20 and gold was at $1400. what

happened there? holders of silver suffered more for many

years compared to holders of gold. it's only right near the

end of a bull market that silver makes up for years of

under performance. history shows that you're argument

hasn't worked for the last 4 years. a broken clock will be

right twice a day.

the point is people don't want to be holding on to a losing

position in silver while they wait for years for it to turn

around. and they most certainly aren't going to sell their

gold holdings to take up such a position.

 

HH

[DarkChameleon]

1 hour ago, HawkHybrid said:

 

that's not how markets work.

why is it that silver attracts more premium to buy

including delivery etc than gold?

there is spread, risk/reward and all sorts to consider.

if silver is currently such a good buy then why don't

you sell all your gold for silver? why stop there?

look at all those hyping that silver was such a better

buy than gold in dec 2015, 3 years on who's got the

better buy. theory is irrelevant, what actually happened

in reality?

 

you're being unrealistic by how you phrased you argument.

for gold to break it's former highs takes a bull market. it's

true silver will probably double to $30 before gold doubles

to $2600. the same argument can be made in 2014

when silver was at $20 and gold was at $1400. what

happened there? holders of silver suffered more for many

years compared to holders of gold. it's only right near the

end of a bull market that silver makes up for years of

under performance. history shows that you're argument

hasn't worked for the last 4 years. a broken clock will be

right twice a day.

the point is people don't want to be holding on to a losing

position in silver while they wait for years for it to turn

around. and they most certainly aren't going to sell their

gold holdings to take up such a position.

 

HH

It's a question posed to the group, not an accusation, a debate if you will...but I get why people don't like risk even if it's going from one metal to another....biased devotes are I'm sure more likely amongst the magpies that we are....but you do give me an idea for a test which might cause some extreme responses but hey, it's only shiny stuff.

[DarkChameleon]

13 minutes ago, DarkChameleon said:

It's a question posed to the group, not an accusation, a debate if you will...but I get why people don't like risk even if it's going from one metal to another....biased devotes are I'm sure more likely amongst the magpies that we are....but you do give me an idea for a test which might cause some extreme responses but hey, it's only shiny stuff.

I just started a topic if there is someone who will swap 20 of their ASE's in a tube for one full sovereign from my collection....let's see if anyone is interested.

[sixgun]

5 hours ago, DarkChameleon said:

I wasn't thinking of trading thousands of oz's but maybe 20 or so...taking some money off the table gold wise and then increasing silver.

Crickey do you have thousands of oz's (of gold) to trade?

There isn't much silver out there despite a thread in the recent past stating there were billions of tonnes in the Earth's crust. The silver market is tiny - a billion ounces at $15 something is nothing. The amounts used in items is tiny. If an investment move were made on silver the price could be 10x higher in a few weeks. There is not the capacity to suddenly up production - it could take years. The price of silver is dictated by investment demand. There is enough for industry and what takes up the difference is investment demand. If investment demand rose tightening industrial supply the corporations using silver would stockpile and the price would rocket. What the GSR was would be irrelevant to price.

There are lots of IF's in that. What the GSR and price of silver tells me is there is not a lot of downside in the price. We might hear $4 or $7 from Mr Wong et al but when you press him he will say it could be a nanosecond spike down which is of no consequence to physical stackers. Price has been bobbing around since 2014 - it is consolidating. There is enough for industrial users. If investors get fed up then there is a relative glut of silver and price sags. If physical investors get interested then price will climb. If everyone in the UK bought a tube of 1oz coins there would be a supply crisis.

i listened to a very interesting pod cast from London Paul on the Sirius Report last night. London Paul used to do slots occasionally on X22 and did a regular slot on Rogue Money - youtube channels. i subscribed to him - it is less than a fiver a month. He is very good - he does not speculate - he doesn't follow Q anon or any of the common rubbish on the so called alternative media.

He did a pod cast dedicated to gold and silver - he isn't selling anything - he doesn't get a kick back on any metal. He doesn't give specific prices or times - the pod cast was not really about price prediction (but the prediction was of much higher prices) but about precious metals as part of the economic and political landscape. He comments on gold now and again but unusually he did a whole podcast on it. He stated what i have heard elsewhere that Russia and China have at least 40 000 tonnes of gold EACH. Some of this is old gold, some of this has been bought from the West and some is mined. i have heard China runs some gold mines at a loss to get the gold - expect much higher prices if China is doing that. i echo his view price will eventually shoot up in both gold and silver when the West has run out of gold but not until. That price will then be set in Russia and China and they have all the gold. He who has the gold makes the rules. His view has been and continues to be that gold and silver will back cryptocurrencies. This of course is music to my ears. So the price of silver will depend on what China and Russia thinks. The paper markets will have been destroyed - so what some guy in London or New York thinks will not matter - they will have lost their job in a paper market conflagration. Russia has silver in her vaults - i have seen this in the background in videos of the Russia reserves. China was a silver backed economy when the West was gold. The Opium wars were about tea bought from China in silver and then opium sold back for the silver. China has a long long memory. Gold and silver will be priced by Russia and China. There is not enough silver available for every Chinaman to have a silver coin. i expect the GSR to come down over the next decade - it would not take much of a move to silver - like i say there are not enough ounces and WHEN fiat is rejected which is certain and much nearer that the vast majority believe, you will not be able to get your hands on gold - silver will tag along - in today's value for the USD i expect $50 to be in the rear view mirror and going over the horizon. It will come. i am keeping my silver - i want more gold but i still get bits b/c i am an addict.

[HawkHybrid]

20 minutes ago, DarkChameleon said:

I just started a topic if there is someone who will swap 20 of their ASE's in a tube for one full sovereign from my collection....let's see if anyone is interested.

 

I'm going to guess no takers as the spread is too

big. similarly if you offered to swap it the other

way round I'll still guess no takers as physical

metal is too awkward for any such trade to turn a

profit.

 

HH

[DarkChameleon]

9 minutes ago, HawkHybrid said:

 

I'm going to guess no takers as the spread is too

high. similarly if you offered to swap it the other

way round I'll still guess no takers as physical

metal is too awkward for any such trade to turn a

profit.

 

HH

It's an interesting offer because the biggest downfall to selling our silver to buy gold is the middle man taking the biggest slice....an exchange is silly a barter offer...we have had silver owners buying things with constitutional silver...in the metal detecting forum,om a member off they have paid in sliver for goods, I fact I'll adjust my offer to also include offers of $30 face value 90% silver...so we'll see if someone has been wanting gold, only got silver and is only not exchanging due to the costs jnvolved.

[SiliconToad]

6 hours ago, Martlet said:

There is an assumption that position taken expect delivery.  If the instruments used do not settle in physical silver but cash, and the interesting party is happy with that, there is no need for enough physical to cover all positions. 

^ This.

I feel like people don't understand the power paper trading trading on margin without expectation of delivery has on silver market price, thinking silver is an asset that can't be inflated away. But silver is not (NOT) money, not fungible. As long as folks measure the worth of silver in currency, it's only worth what someone will promise to pay for it with whatever fiat money they use to measure wealth and trade labor. The physical supply is connected to the the worth of silver only by the needs of industry and the psychology of paper investors. 

[sixgun]

52 minutes ago, SiliconToad said:

I feel like people don't understand the power paper trading trading on margin without expectation of delivery has on silver market price, thinking silver is an asset that can't be inflated away. But silver is not (NOT) money, not fungible. As long as folks measure the worth of silver in currency, it's only worth what someone will promise to pay for it with whatever fiat money they use to measure wealth and trade labor. The physical supply is connected to the the worth of silver only by the needs of industry and the psychology of paper investors. 

Silver is a currency - it is traded as a currency pair with gold XAU/XAG - the so called gold silver ratio and it is traded with other currencies, XAG/USD, XAG/EUR, XAG/GBP and so on. It is not a currency as far as US citizens are concerned b/c they aren't allowed to trade gold and silver on the currency markets - but that doesn't mean it isn't a currency.

Last week the Kinesis Currency Exchange opened - those with accounts (me) - (again US citizens can't join at the moment) - can mint KAU and KAG. These are the gold and silver title of ownership cryptocurrency coins. Basically you buy multiple of 100g gold or 200oz silver for USD and blockchain title of ownership is issued. In July this goes public. In August - September a debit card will be released and you will be able to go spend your gold and silver everywhere there is a VISA/Master card sign. The retailer will likely want fiat and this will happen on the card but if they want KAU or KAG then you will directly spend your gold and silver. It will be money. It will be fungible. It will be divisible to multiple decimal places. This is the way of the future. There will be others.

The paper market will control price for as long as those who can blow this market out of the water allow it to control price. When the West can no longer sell gold to China/Russia they will reset the price and the paper markets as they are are finished. The Western central banks may try to get in ahead of this and do a reset themselves but there will be a reset. We have seen Canada get rid of all her gold, the US doesn't audit it so likely there is a big deficit, the BoE refused to give Venezuala her gold back, the Germans only got half their gold back, the Australians can only see a few of their bars with plenty of notice given.... To me it all indicates stocks are running out. When the reset will come is just a guess unless you are a Fed/BoE central banker but it isn't a guess the gold will run out and then a reset comes and the likes of the gold/silver COMEX are done.

 

[Gildeon]

5 hours ago, Abyss said:

Yes within my lifetime gold will hit $2600 of that I am certain. 

And I thought you were adult...! 😁

[Gildeon]

2 hours ago, DarkChameleon said:

I just started a topic if there is someone who will swap 20 of their ASE's in a tube for one full sovereign from my collection....let's see if anyone is interested.

Looking to exchange gold to silver close to their spot ratio (more than 80:1) doesn't seem realistic. It doesn't take into account the premiums. It could work in a paper exchange but not in physical.

Just think that I can sell a tube of eagles easily at a higher price that what I would have to pay for a sovereign. You have to account at least a 10% plus for silver premiums, personally I would be looking at something closer to 70:1 for such a deal.

[Abyss]

What more likely to happen first Silver $30 or Gold $2600 look at historical price of both metals on the charts appears that Silver more easier to manage than Gold so my vote Gold will double before Silver. All things being equal and if Gold production cost $1,000 with inflation 2% compounded in 50 years to keep up with inflation Gold $2,600. Gold enters new bull market see $2600 within the next 10 years.

All things being equal no bank runs, no sovereign debt crisis, no black swans, no peak oil/silver/gold, no pension crisis and with stable human population.

[vand]

Interesting question. My model says that we are "close but not quite".

Based on my historical accumulation model with a rolling 71 month GSR average and swapping metals whenever the GSR moves 2.3 standard deviations away from the mean, you should swap all gold for silver if and when the GSR reaches 88.9.

Conversely, swap all silver for gold if and when the GSR falls below 57.2. 

This model has only generated 11 swap signals in the past 50 years, and if you had acted upon them you would now have somewhere between 6-8 times as much metal than a pure cost-averaging accumulation strategy. However, it does not account for transaction costs, so perhaps more realistically 4-5 times as much metal if you are swapping the physical stuff.

 

 

---

Added 0 minutes later...

Visual summary of model's swap signals:

 

Perhaps the most significant thing that has changed in the last few years is that with the relatively high GSR sustained over the last 5 years, the "swap silver for gold" boundary has significantly climbed, so you should be prepared to to do the opposite swap somewhat earlier than previous. This is a bit sobering for all those who are hoping silver will regain 20:1 GSR, but that is what the model says. 20:1 but a pipedream right now, and we may not even see the old 2011 GSR peak being challenged.

The spread between the 2 swap boundaries of of 57 - 89 is actually quite a significant narrowing of the range, and reflects the continual relative stability of the GSR. I do expect that if and when the bull market gets going, the volatility will pick and and so hence the swap boundaries will once more begin to get pushed out.

[bluemoon]

I try not to predict bottoms and tops, I've been there and it's more headache than its worth. While I see the GSR as a possible speculation opportunity, I buy with the mindset that any turnaround in GSR is a bonus, and buy for the fundamentals of PMs. Nice and stable and boring, just how I like it.

[vand]

When I ran various parameters through my model:

- A "cost averaging" netted you about 40% over 50 years vs a dumb "fixed amount" strategy for the same dollar outlay
- Buying Silver over gold would have netted you a further 60%, as gold has outperformed silver over the long run
- Buying ONLY silver or gold when the GSR reached a historical extreme would NOT have seen you do better than a pure gold-only strategy. This is perhaps most troubling for silverbugs to get their head around. But it's true; buying only gold would have performed just as well as buying the "cheapest" metal over time, since the GSR has continually been moving higher and an "extreme" price of 65 back in 1987 has become a "normal" price today.

In summary then, a discipline "cost-average gold only" approach would have been the optimal strategy if you only accumulated and never did any swapping

However, the long term returns take a massive jump if you are willing to 3 features:

- Willingness to swap one metal for the other at historical extremes added another 350% increase to the portfolio over 50 years
- Scaling up or scaling down your buying depending on the price of gold relative to average wages added a further 20% 
- Implementing long term hedging when the portfolio passes a a certain drawdown threshold to protect from further downside adds up to another 44%

these last 2 points are for more advanced active management and cross over into asset allocation strategies

[HawkHybrid]

37 minutes ago, vand said:

Interesting question. My model says that we are "close but not quite".

Based on my historical accumulation model with a rolling 71 month GSR average and swapping metals whenever the GSR moves 2.3 standard deviations away from the mean, you should swap all gold for silver if and when the GSR reaches 88.9.

Conversely, swap all silver for gold if and when the GSR falls below 57.2. 

This model has only generated 11 swap signals in the past 50 years, and if you had acted upon them you would now have somewhere between 6-8 times as much metal than a pure cost-averaging accumulation strategy. However, it does not account for transaction costs, so perhaps more realistically 4-5 times as much metal if you are swapping the physical stuff.

 

 

---

Added 0 minutes later...

Visual summary of model's swap signals:

 

Perhaps the most significant thing that has changed in the last few years is that with the relatively high GSR sustained over the last 5 years, the "swap silver for gold" boundary has significantly climbed, so you should be prepared to to do the opposite swap somewhat earlier than previous. This is a bit sobering for all those who are hoping silver will regain 20:1 GSR, but that is what the model says. 20:1 but a pipedream right now, and we may not even see the old 2011 GSR peak being challenged.

The spread between the 2 swap boundaries of of 57 - 89 is actually quite a significant narrowing of the range, and reflects the continual relative stability of the GSR. I do expect that if and when the bull market gets going, the volatility will pick and and so hence the swap boundaries will once more begin to get pushed out.

 

does it say to buy silver or gold in dec 2015?

how has that worked out?

I'm saying that the gsr is a flawed approach to

better guess tops and bottoms. it really only

works in hindsight. (why would I need it if I

already have a working crystal ball)

 

HH

[vand]

9 minutes ago, HawkHybrid said:

 

does it say to buy silver or gold in dec 2015?

how has that worked out?

I'm saying that the gsr is a flawed approach to

better guess tops and bottoms. it really only

works in hindsight. (why would I need it if I

already have a working crystal ball)

 

HH

Here are the model's readings since Dec 15. Contrary to your somewhat dismissive approach, it would have seen you accumulating just as much gold as silver over this period:

Jul-15    SILVER
Aug-15    SILVER
Sep-15    GOLD
Oct-15    SILVER
Nov-15    SILVER
Dec-15    SILVER
Jan-16    SILVER
Feb-16    SILVER
Mar-16    SILVER
Apr-16    GOLD
May-16    SILVER
Jun-16    GOLD
Jul-16    GOLD
Aug-16    GOLD
Sep-16    GOLD
Oct-16    GOLD
Nov-16    GOLD
Dec-16    GOLD
Jan-17    GOLD
Feb-17    GOLD
Mar-17    GOLD
Apr-17    GOLD
May-17    GOLD
Jun-17    GOLD
Jul-17    GOLD
Aug-17    GOLD
Sep-17    GOLD
Oct-17    GOLD
Nov-17    GOLD
Dec-17    GOLD
Jan-18    GOLD
Feb-18    SILVER
Mar-18    SILVER
Apr-18    SILVER
May-18    GOLD
Jun-18    GOLD
Jul-18    GOLD
Aug-18    SILVER
Sep-18    SILVER
Oct-18    SILVER
Nov-18    SILVER
Dec-18    SILVER
Jan-19    GOLD
Feb-19    SILVER
Mar-19    SILVER
 

But don't worry, when the GSR drips below 80 I'll be sure to tear your strategy to shreds too and laugh that I was accumulating silver when it was 3% cheaper in relative terms.. and I might even mention my Platinum has pissed over your gold since I've been buying it

[DanShanks]

Dom frizby made some good points

you cant go wrong buying silver with your gold when the ratio is up here at 85

 

whe. It goes back under 40 you would do well to sell your silver for gold

 

anybody doing that over the last few decades did very well

[HawkHybrid]

34 minutes ago, vand said:

Dec-15    SILVER

this just cost people 3+ years of opportunity cost.

what does it take to show that the gsr doesn't

work?

 

36 minutes ago, vand said:

when the GSR drips below 80

with hindsight ie when time eventually proves it to

be right(the broken clock is right twice each day

analogy) it works great. until then you're holding

a continually losing position. if you have to wait for

it to eventually happen, any system can make that

'prediction'.

 

HH

[HawkHybrid]

1 hour ago, vand said:

But don't worry, when the GSR drips below 80 I'll be sure to tear your strategy to shreds too and laugh that I was accumulating silver when it was 3% cheaper in relative terms.. and I might even mention my Platinum has pissed over your gold since I've been buying it

 

this is not about who was right or who was wrong.

this is about multiple data occurrences showing

that the gsr is a flawed system. yet people still

stubbornly try to use is to time entries and exits.

the key word here is 'eventually'.

any system that suggests that people should be

buying silver over gold from 2011-present day is

flawed.(there are pockets of exception).

 

there will be a time for silver to shine and to buy

silver over gold. the problem is the gsr is doing a

lousy job at telling people when that time is.

 

this is about people losing out by following the

completely biased gsr system that is continually

pushed by those with a vested interest in drumming

up as much demand for physical silver as possible

and couldn't care less about the value that buyers

of physical silver are getting.

 

anyone notice that the gsr system actually works

better for paper trading.

 

the multi year data shows that gold was a better buy.

this is not me making it up.

 

@vand I think you might see this as a personal attack

on you, I assure you it is not. people need to stop using

the gsr system and search for a better system. if it

works for you, that's great. but at least stop touting how

good it is in the open knowing that it's made more buyers

poorer than it's made richer in the last few years. stop

standing up for a flawed system with 'in the future it will

be right'. let people see more clearly how flawed it is

and how sellers of physical silver use it to convince

buyers that they are getting a better deal than what is

actually true. you are defending a system that is being

used to cheat people.

(I have much respect for your posts. with hindsight dec

2015 was the best chance in many years to buy gold. I

just can't see how you can defend a system that got it

so wrong.)

 

HH

[sixgun]

The issue with swapping gold for silver or vice versa is dealing with the problem of the premium of silver and the transaction costs.

The calculations pan out when you do them at spot but we aren't dealing with spot prices in Europe with silver. My silver stack is long term in my mind. i am not selling any before the reset so i could be waiting several years. Perhaps it will be up to my children - in which case it is going in my coffin with me.

Silver on average has not been as good an investment as gold. Most of the time i have been buying silver the GSR has been in the high 70's and above, so i should count myself as lucky.

In the last 100 years there have only been two periods when the GSR has been as high at it currently is. In the first half of WWII and in the early 1990's.

After the WWII peak the GSR fell until the late 1960's - when the powers that should not be completely pulled silver from coinage - on the grounds it had more important uses.

During this 100 years there has been significant tampering with gold and silver - gold and silver are real money but we have had a programme of convincing the people they aren't so that limitless fiat can be created to finance the cabals antics of death and debt. Delivering democracy from the bomb bay of a B52 requires a lot of fiat so better remove all credit card limits.

i don't think for most of us it is viable to swap between gold and silver in Europe. There is the premium on silver, transaction costs, postage, blah blah - there are all those good value coins picked up over months and years have to be sold over a short period and the opposite metal bought over a short period. Switching in paper is quick and easy but i expect the metal allegedly backing these up is not there or will disappear when you most need it. The precious metal backed cryptos could be a solution - we will have to see. Personally i am way overweight in silver as it is but that won't stop me buying more through cryptocurrency.