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Is silver underpriced? Or gold overpriced?

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  • Is silver underpriced? Or gold overpriced?

    Back in the old days, the price ratio between gold and silver (at least in the U.S.) was relatively fixed at approximately twenty oz. of silver to one oz. of gold (20/1).

    Both metals have industrial as well as monetary uses.

    Currently, gold hovers around $1620 and silver fluctuates close to $28.

    That's a ratio of almost 58/1, almost 3 times the old ratio.

    I don't understand the economics of trading, mining, and supply and demand well enough in this case (although I do know that DeBeers has diamonds way overpriced through control of releasing the supply - though this does not apply to metals) and I'd appreciate some intelligent discussion.

    And, maybe some investment advice as well; should I be buying silver or selling gold?
    Be Yourself. Everyone Else Is Taken!
    ~ ~
    Kaʻonohiʻulaʻokahōkūmiomioʻehiku
    Spreading the virus of ALOHA.
    Oh Chu. If only you could have seen what I've seen, with your eyes.

  • #2
    Re: Is silver underpriced? Or gold overpriced?

    Silver, gold and platinum are generational investments. Inherit, buy, gift, but never sell.
    May I always be found beneath your contempt.

    Comment


    • #3
      Re: Is silver underpriced? Or gold overpriced?

      Silver compounds are used in processing photographs, which have been in a decline.

      Comment


      • #4
        Re: Is silver underpriced? Or gold overpriced?

        Originally posted by salmoned View Post
        Silver, gold and platinum are generational investments. Inherit, buy, gift, but never sell.
        I see this as very good advice.

        Comment


        • #5
          Re: Is silver underpriced? Or gold overpriced?

          Originally posted by salmoned View Post
          Silver, gold and platinum are generational investments. Inherit, buy, gift, but never sell.
          Never? NEVER????? How can you profit?

          Well, actually, if you follow this beneath contemptable advice, at least you will not have to pay taxes on artificial price increases due to inflation.



          Maybe things will come around and we can use it as money again.
          Be Yourself. Everyone Else Is Taken!
          ~ ~
          Kaʻonohiʻulaʻokahōkūmiomioʻehiku
          Spreading the virus of ALOHA.
          Oh Chu. If only you could have seen what I've seen, with your eyes.

          Comment


          • #6
            Re: Is silver underpriced? Or gold overpriced?

            Originally posted by helen View Post
            Silver compounds are used in processing photographs, which have been in a decline.
            Good point, Helena. Do you know of other industrial uses for silver? Or are we stuck with "American Eagles" and "Canadian Maple Leaves?"
            Oh, and cheapo jewelry.

            I understand it is harder than gold, has BETTER thermal and electrical conductivity (even better than copper), but unlike gold, it is subject to corrosion.
            Be Yourself. Everyone Else Is Taken!
            ~ ~
            Kaʻonohiʻulaʻokahōkūmiomioʻehiku
            Spreading the virus of ALOHA.
            Oh Chu. If only you could have seen what I've seen, with your eyes.

            Comment


            • #7
              Re: Is silver underpriced? Or gold overpriced?

              I'm not getting my answer:

              Is it supply and demand?
              Perceived value?
              The 'glisten' factor?
              Over/under-valuing?

              Just the loss of photographic uses of silver can't account for such a wide disparity, I think.... It's almost as if silver has lost its luster.

              1930: $20 Gold piece, $1 Silver dollar - both about one ounce (Troy).
              The gold was about .900 fine, the silver was also .900, I think, 90%.
              Modern gold coins (US) are 22k, .9167%.
              Last edited by Kaonohi; August 14, 2012, 11:39 PM.
              Be Yourself. Everyone Else Is Taken!
              ~ ~
              Kaʻonohiʻulaʻokahōkūmiomioʻehiku
              Spreading the virus of ALOHA.
              Oh Chu. If only you could have seen what I've seen, with your eyes.

              Comment


              • #8
                Re: Is silver underpriced? Or gold overpriced?

                Sorry for lateness of reply. Been doing some housecleaning recently.

                Confidence in a money system is mandatory if value is traded with paper called dollars or pounds.

                If public confidence fades , the currency becomes a "Shinplaster".

                Generally , a nice handful of gold or silver will help in that unlikely scenario.

                Sometimes too much emphasis can be placed on acquiring precious metals.

                South America was invaded from Spain and suffered much injustice from the
                Old World.

                The Inca was executed in full view of the people.

                A small group of mercenaries set the ground rules for the South American Continent.

                Within a few years Spain spent all that stolen loot fighting England.

                Comment


                • #9
                  Re: Is silver underpriced? Or gold overpriced?

                  If you're not getting your 'answer', maybe the question is wrong. The value is the price. History is history - that was then, this is now. Maybe you'll like one of these answers - portability, maintenance-free, or very-pretty.
                  May I always be found beneath your contempt.

                  Comment


                  • #10
                    Re: Is silver underpriced? Or gold overpriced?

                    Originally posted by salmoned View Post
                    If you're not getting your 'answer', maybe the question is wrong. The value is the price. History is history - that was then, this is now. Maybe you'll like one of these answers - portability, maintenance-free, or very-pretty.
                    I like very-pretty, but rarely open my safe-deposit box to look. I go to coin stores, and usually they have prettier things.

                    Portability? Compared to.... (?) OK $1650 in an old-dollar-sized coin, or 16 $100 bills? - a bit more portable, I guess. Better than 80 $20's. (Better than a check.)

                    Gold is maintenance free, as long as it's not numismatic (which adds value), silver must be protected from corrosion.

                    I think your take on my question being wrong was the best. When it was a government-sealed ratio based on monetary value, it was locked in. Now it's supply and demand... or at least desirability, fiscal confidence and demand. Metals are now an investment, like stocks, or a commodity, like corn and wheat. People will value and pay based on perceived future value. There's plenty of both (or all 3) to fulfill industrial needs.

                    I didn't grasp that silver, gold and platinum are no longer money - at least not here.

                    Possibly my age has something to do with my tendency to rely on old paradigms. There is no longer a relationship twixt the two - I get it.

                    Thanks, salmoned, for an answer I can still understand.
                    Be Yourself. Everyone Else Is Taken!
                    ~ ~
                    Kaʻonohiʻulaʻokahōkūmiomioʻehiku
                    Spreading the virus of ALOHA.
                    Oh Chu. If only you could have seen what I've seen, with your eyes.

                    Comment


                    • #11
                      Re: Is silver underpriced? Or gold overpriced?

                      These small market fluctuations in spot market valuations require very near time connections
                      to work.
                      The big traders have much faster web connections.
                      The long term value of Silver and gold are certain because no other elements can
                      really replace them.
                      The elements are like a pack of cards. Shuffle them and the odds of a
                      Royal Flush are remote.
                      However, sometimes winners emerge,
                      Checking out the probability of a card draw is a simple matter of mathematics.

                      Comment


                      • #12
                        Re: Is silver underpriced? Or gold overpriced?

                        Originally posted by lensperson View Post
                        These small market fluctuations in spot market valuations require very near time connections
                        to work.
                        The big traders have much faster web connections.
                        The long term value of Silver and gold are certain because no other elements can
                        really replace them.
                        The elements are like a pack of cards. Shuffle them and the odds of a
                        Royal Flush are remote.
                        However, sometimes winners emerge,
                        Checking out the probability of a card draw is a simple matter of mathematics.
                        Wow.
                        What I would consider 'high-order mathematics.'
                        Be Yourself. Everyone Else Is Taken!
                        ~ ~
                        Kaʻonohiʻulaʻokahōkūmiomioʻehiku
                        Spreading the virus of ALOHA.
                        Oh Chu. If only you could have seen what I've seen, with your eyes.

                        Comment


                        • #13
                          Re: Is silver underpriced? Or gold overpriced?

                          I believe that gold is more expensive and more profitable to buy gold and precious stones.

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