Watch out stock markets - Hello Precious Metals!
- True Money!
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Permalink Reply by Bruce Wiseley on -
There's no doubt that the Dow will drop faster than a strippers clothing! Last week, I rolled my Wife's 401K account out of the market and into a lower interest but fixed fund, because the idiots in charge are going to ruin everything they touch. For the folks who are holding PM's, good for us, but still, it's hard to eat a Gold or Silver coin! We also are stashing food as well for the same reasons. Good luck, and God help us all!
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Permalink Reply by Clair Alan Hardesty on -
This morning, gold is within $25 of platinum (and closing in on $1700) and may well pass it today or in the next few days. If it does, will any of you switch and but some of the white metal? I realize that platinum markups and buy-back premiums are higher than those for gold, so how much higher than platinum does gold have to go for you to feel comfortable buying it instead of gold? There is also the collector factor to consider, many gold coins are far more beautiful than any offered in platinum. Does that factor into anyones equations?
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Permalink Reply by Buffalo on -
Personally I see gold and platinum marching to different tunes. Gold is gaining as a safety play/alternative currency. Platinum is primarily being seen as an industrial metal driven by economic factors. IMO, the current situation will have to change a lot to make platinum the better play. Goldman Sachs now says there is a 1 in 3 chance for a new US recession. Personally I put the odds higher than that and I don't believe it will just be in the US. If so, $1700 an ounce for platinum might be the highest price we see for quite a while, so I don't really see the potential as a function of the actual price right now but a question of where the price is likely to go.
That is not saying you can't make some good plays in Platinum coins. Some of the platinum Eagles are very nice designs and they do have a collector following. Over the last year I have still averaged more than 30% profit on the platinum coins I have bought and sold, but that was more numismatic gains than gains in the metal value. Overall gold has done much better and I just don't see anything happening soon that will change that.
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Permalink Reply by True Money on -
I just pulled the trigger and ordered the 2011-W uncirculated Gold Eagle. No one is ordering this coin, even the big wholesalers. Personally, I believe it is a much better coin than the proof, with a lower price and mintage. This coin may become a key for the entire series.
As for platinum, it is 50 times as rare as gold and has industrial applications. I look for it to do well in the coming months. There are also some great opportunities out there for platinum coins. The older proof coins have some very small mintages and look infinitely better in relief and finish than what is offered today.
-True Money!
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Permalink Reply by Buffalo on
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I guess I have a different opinion from many people on a lot of the ratios that people talk about regarding precious metals. The historical AU/AG price ratio is one. I see little reason to think any particular ratio is the "right" one or that prices will somehow automatically revert to some "normal" ratio, since I don't believe there is a "normal" ratio. The relative scarcity of gold versus platinum is another one. The absolute amount of something available is one factor. How that supply matches up to demand is something else, and that is the part I question for platinum if the global economy does what I think it will. In other words, will an absolute rarity mean a functional rarity that drive prices higher?
As I said though, I definitely agree there are good opportunities with platinum coins. Like always, look at things on a case by case basis rather than relying on generalities.
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Permalink Reply by Clair Alan Hardesty on
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Buffalo, I agree with you about the historical ratios. Those numbers went out the window a long time ago when the metals were deregulated. Also, you are right that platinum pricing has historically been driven by its uses but I wonder if with gold getting so expensive because it has become so much a vehicle of investment/speculation that platinum might start being seen by many in the same light. Clearly, if you look at the long term charts, gold pricing has not had the ups and downs of silver and the platinum group elements, which have been significantly influenced by their industrial use markets. Gold it seems is immune from its use markets and has become a pure instrument of exchange, a grain that doesn't spoil. While gold also serves as the moderator between various currencies, what we are seeing now is not so much as a devaluing of the dollar, but a devaluing of all world currency. Unfortunately, when everyone is buying gold, they are not using any money to produce things, which has been the historical way out of recessions. Hopefully we can find a way to get production going again without resorting to the pointless consumption of war. Oops, I'm rambling ...
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Permalink Reply by Gem on -
The lack of decent jobs are causing americans to accumulate more debt to get by.And now there defaulting on them debts witch caused the dow to drop 600+ more points today.And 1700+ combined points over the last two weeks,There is a god (0:
Investors need to quit taking jobs oversea's.
Will gold exceed 2k by end of year ?
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Permalink Reply by CaptainOverkill on -
The proximate cause of the DOW plunging today was a combination of fear and panic over the rating downgrade and about the situation with Italy in Europe. Germany declined Saturday to bail out Italy, making the ECB the lender of last resort now. They are buying up Italian and Spanish bonds in a desperate effort to keep the Euro up. People are panicking and pouring into the dollar and into gold. Despite the rating downgrade, people still see apparently see the US as the best of a series of bad options. What's important to note is that the dollar has been relatively stable recently, trading between 73-75 on the USDX. Despite this, gold is continuing to climb, because it's now finally beginning to act as a true flight to safety.
On the subject of platinum, the white metal's primary use right now is for the catalytic converters in cars. Part of the reason for its surge in the past few years is the interest in "green" technology and the increasing legal requirements that such green technology (like the catalytic converter) be installed in cars. It is mandated in the US and Europe, and China is beginning to do this as well. In addition to the auto industry use, I'm sure most people here know that platinum is also used for expensive jewelry.
Platinum is not yet being treated as a flight to safety. Only in the last two weeks have you really started to see gold and silver serve a flight to safety function, so my suspicion is the reason it is failing to do well is because of the trouble the auto industry is having - the economic downturn is making it very hard to sell big ticket items like cars. Palladium is even MORE exposed to the troubles of the auto industry since it is less rare and also used as a cheaper alternative to platinum. Eventually I think we will see platinum's fortunes turn around, because the supplies of platinum bullion are very limited - the total amount of platinum mined every year is about 6% of the amount of gold produced, and it is very expensive to extract platinum from mined materials. Furthermore, most platinum is produced in South Africa, and there are major issues there right now with striking miners, and also some issues with mines becoming tapped out.
In short, the elements are there for a major runup in platinum. In fact a few weeks ago, I sold off an ounce of gold to buy my first platinum eagle. I think everyone who has the money to try this should consider getting an ounce or two of platinum from dealers like Provident Metals (the US Mint is also offering a proof platinum eagle right now with a beautiful design, but also a high premium). I have some hope platinum may even become a sort of super-currency like gold seems to be turning into.
This thread at Turd Ferguson's blog has a ton of useful information and links about platinum. I would pay particular attention to jacek99's posts, he provided me a ton of information and was a big help educating me about platinum.
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Permalink Reply by Buffalo on
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Clair said: Also, you are right that platinum pricing has historically been driven by its uses but I wonder if with gold getting so expensive because it has become so much a vehicle of investment/speculation that platinum might start being seen by many in the same light.
So far at least I don't see much to indicate it is being viewed as an alternative to gold in the sense that it has the same appeal as a safety play or investment. I'm thinking the worsening situation lately has actually highlighted the greater appeal of gold as an alternative investment. I do believe silver and platinum share that "safety play" appeal to a much lesser extent than gold, but some of the factors that create demand for safety investments can also lower demand for silver and platinum for economic reasons. So at least to some extent maybe some offsetting forces working on prices. Platinum could see a big runup if something has a major impact on the supply/demand situation like TM and the Captain said. Definitely not knocking it or meaning to be negative, like I said I believe there are good opportunities.
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Permalink Reply by george palmer on -
I think i will I was thinking of that just today but i just love the gold
Clair Alan Hardesty said:This morning, gold is within $25 of platinum (and closing in on $1700) and may well pass it today or in the next few days. If it does, will any of you switch and but some of the white metal? I realize that platinum markups and buy-back premiums are higher than those for gold, so how much higher than platinum does gold have to go for you to feel comfortable buying it instead of gold? There is also the collector factor to consider, many gold coins are far more beautiful than any offered in platinum. Does that factor into anyones equations?
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Permalink Reply by Clair Alan Hardesty on
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Wouldn't you just know it? This morning, with gold receding and down to $1735, the mint has taken the commemorative half Eagles off line to reprice them. Something they should have done a few days ago but now that they are doing it, it is no longer needed. This will probably kill the sales of these products, which were already minted in large numbers using gold obtained at much lower prices. While I am angry about the now unnecessary price increase, I am equally angry the the mint is, through this action, taking money away from the causes that these coin programs support. That is after the stated purpose of the commemorative coin program as a whole. It is not to make money for the general treasury or provide bullion for metal traders or really even give numismatic speculators a vehicle for profit. It is there to raise money for causes that Congress decides are worthy and in that light the mint should be willing to sell the coins at zero profit margin with respect to the cost of the coins when they mere minted, not the replacement cost of the coin if they were to buy the raw materials today. If such an approach results in a profit to the buyer should they choose to immediately resell their purchases then so be it. Doing it that way would certainly enhance the collection of funds for the causes the coins are being minted so support. If they want to limit speculation then impose the good old one per household limit, something that should be exceedingly easy to do. The two current programs seem exceptionally worthy of support and this action will most certainly result in a lower total contribution to those causes.
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Permalink Reply by Buffalo on
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In my opinion, the Mint has increasingly moved towards making collector items and bullion items a larger revenue source. Also just my opinion, but I think the way the Mint allocates annual expenses to the 3 market segments (circulation, bullion, numismatic) allows them to constantly say they are operating at the target segment margins they set regardless of what the true segment expenses might be. The Mint can say what they choose about their goals and results but reality that doesn't match their words speaks louder.
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