brickweeder
Well-known member
Well done!
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How about that silver?
- Thread starter gladysvjubb
- Start date
St. Phatty
Active member
The local coin store is selling 1 ounce silver rounds for $5 above spot.
The best deal at one of the etailers is $3.79 above spot.
One option is to advertise on Craigslist "Silver Wanted" but then you have to be able to detect counterfeits.
The coin dealer protects customers from buying stolen property by asking people for their driver's license.
Oh wonder how long it will take for the margins in Silver to go back to the usual, about 5%.
Three Berries
Active member
I hate choosing/buying gifts and the grandkids keep coming. I bought a bunch of gold and silver from 1995-2005. It's a win win.
I started out with paper silver bank accounts and they grew pretty good but they kids just cashed it in when they got the money. Not so easy to do with physical.
St. Phatty
Active member
How low would the price have to go before you buy again ?
Spot price dipped to $18.70 this morning. Getting tempting.
I would say, $16 spot. But then the premium would be $4 ish.
Can't see paying $20 an ounce.
My average cost per ounce is around $18.50. If I'm going to buy more, I want to lower the average.
Especially when I have debt that needs to be paid off.
Spot price dipped to $18.70 this morning. Getting tempting.
I would say, $16 spot. But then the premium would be $4 ish.
Can't see paying $20 an ounce.
My average cost per ounce is around $18.50. If I'm going to buy more, I want to lower the average.
Especially when I have debt that needs to be paid off.
St. Phatty
Active member
brickweeder
Well-known member
use tradingview instead of kitco...way better.
Three Berries
Active member
It's on sale under $40
St. Phatty
Active member
In the long term.
Guess you noticed how Silver was one of the few commodities that didn't go up during Covid19.
But when you buy Silver you are betting against the biggest money-printer and criminal organization in the world.
They have a serious Hard-on for suppressing the Silver price.
According to normal economics, this will eventually come back to bite them.
BUT price is related to demand, and the Strong Dollar policy of the US government & standard currency manipulation activities does a very thorough job of reducing popular demand for Silver.
People get tired of waiting for it to go up, they get tired of the erratic prices.
So I'm afraid that even though supply shortfalls on the industrial front will occasionally cause some really interesting Silver price spikes, having 90% of the investing public burned out on precious metals really does have an effect on prices long term.
brickweeder
Well-known member
it will be on sale under 40 when the cost of production doubles from about where the miners are now (the way oil prices are, it could be a near-term condition), until then, strength is to be sold into, especially if we near the $40 zone.
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brickweeder
Well-known member
save some dry powder in the event of a capitulation low similar to march 2020 or fall of 2008. The deeper it goes, the more likely of a spring back because we are nearing the current cost of production.
St. Phatty
Active member
It's one of those times when dealer premiums in Gold are much more reasonable than premiums in Silver.
I don't blame the Silver dealers for charging $3.50 when spot is $18 - though since they are paying $1 above spot, it's like spot is $19.
How do you get accurate information about cost of production ?
Kind of hard to get it out of the "All in Sustaining Cost" tables & Charts. Obviously some of them are much lower than $18.
One way to get that information is to be a BIG BUYER and to simply offer the mine that says their cost is $10 - say $1 Billion for 100 million ounces.
If they figure out that their cost is more than $10, they might let you know.
brickweeder
Well-known member
Back in early 2020, I went through the financial statements of a lot of silver miners, and their aisc mostly ranged from 8.5 to 12.5. I went long slv options into the march 2020 crash when price approached and was within the cost of production zone.
Maybe 6 months ago, first majestic announced an aisc of around 18.5. I think fm is on the high side, so I just assume that aisc is around 18-20 right now, especially since the energy cost run up. Definitely there are some miners with lower aiscs, so we have to think of cost of production as a zone rather than a fixed number. I assume that we are within the cost of production zone right now (im too lazy to go through the financial statements again) and that silver is in the buy zone...can it go lower, yes, can it put in a reversal and start a run without going lower, yes. No one knows what it will do in the near term, but all signs point to happy times in the future (at least happy in terms of price, could be shitty conditions other wise).
By the way, Steve Rocco has researched cost of production in the current environment and has concluded that it is around $20 right now (he doesn't get into specific sources for his conclusion, but he is very thorough when he researches subjects)...
GoldSeek Radio Nugget -- Steve Rocco: Silver being sold for less than production cost..
Institutions obtain large exposure to gold and silver, chiefly via ETFs due to constraints on the tiny physical metals market.
goldseek.com
Have a listen, its a decent interview.
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brickweeder
Well-known member
One more thing, I agree with rocco that energy is the basis for all wealth produced, and with the bifurcation of the global economy and the creation of a new monetary system in the works as we speak, silver is in a unique position in that it is priced well below its all time highs of $50, is both a monetary metal and an industrial metal, and its price is in the cost of production zone. All metals require tanker loads of diesel to mine and transport, and millions of cubic meters of nat gas to process the ore into metal. So IMO, Silver will definitely be repriced upwards, much the same way oil and natgas has been repriced, it just hasn't happened yet. Silver has to be repriced, given that its cost of production is increasing, given how F'd up the world is right now and given that resource-rich countries are moving to protect and receive the true value of its resources rather than the reserve currency fiat price of its resources. This is where we are, and the next 5 years will probably be much different than now.
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Three Berries
Active member
Using fiat money to compare the value of gold or silver only shows the value of the fiat.
St. Phatty
Active member
I like to estimate the bottom line on silver value by comparing production cost with other commodities, e.g. 5.56 bullets.
I figure 2 ounces of Silver for one of the standard 90-packs of XM193 5.56's.
In terms of how difficult they are to manufacture overall, including cost of obtaining the copper and zinc to make the brass for the bullets.
brickweeder
Well-known member
not always, depends on how you look at it. for instance, gold is over 100% above its 1980s high of 850, whereas silver is more than 60% below its 1980s high of 50. so the price of gold and silver together right now isn't any kind of accurate reflection on the value of fiat.
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brickweeder
Well-known member
yeah bullets are probably a better metric for the value of fiat than precious metals.
btw, can you really get 90 rounds of 5.56 for 2 oz of silver or $37??
Three Berries
Active member
Yes just what its the value of fiat?
brickweeder
Well-known member
the value of fiat is what you trade it for at any given time, nothing more, nothing less. If you buy a gallon of gas for $5 usd, the value of $1 is 1/5 of a gallon of gas.
If you get paid $30/hr at your job, the value of $1 is 2 minutes of three berries labor.
If you have an ounce of silver but would only sell it for $50 right now, no one will buy it at that price so your perceived value of 1$ right now is incorrect, and the value of $1 in terms of silver will be decided by others who engage in an actual trade.
