Silver shot up.

[Ten98]

Silver isn't ready to crash, in fact quite the opposite. Silver is under bought, and recently something historic happened.

Look at the shape of the Silver price compared to the Gold price over the past few weeks. Pretty similar huh? Now look at the Silver price compared to the Gold price over the past 6 months. Not similar at all right?

In the past, Silver has risen and fallen with stocks, and was being traded like one. It is now seen by investors as a proper precious metal commodity. Welcome to Gold 2.0!

Here's the interesting part: Silver as a commodity "should" be trading at a ratio of roughly 10:1 to the price of Gold, given global conditions of supply and demand. However, since the Silver price has been destroyed recently along with stock prices, it is currently around 40:1.

Now that Silver is being treated like a precious metal and not a stock, most serious investors expect the price to come up to between 20:1 and 15:1 in the next 2-3 years and then slowly slowly make its way to 10:1, a short term gain of 100 to 200 percent and a long term gain of 400!

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[1905]

^ my man. right on.

[miscreanity]

^ my man. right on.

I'll second that.

The GSR is one of the easiest long-term trades to work, if you can sit tight and let it run; and is that ratio ever at a wall right now...

[pekv2]

So, sounds like we should start buying and holding onto that silver for a few years, aye?

[S3052]

Yes. Buying silver is a great idea, when it has fallen below 10$ in the next 1-3 years.

[Ten98]

So, sounds like we should start buying and holding onto that silver for a few years, aye?

Absolutely.

And the timing couldn't be more perfect, prices are on a little tumble today and may carry on falling through the week, so you can pick up a bargain at the bottom and laugh your ass off at the top.

I think too many investors simply could not resist that magical $1900 mark for Gold yesterday and sold like crazy, triggering a big sell-off on both Gold and silver.

As I said before, the two prices seem to be very much linked at the moment which is a very interesting development indeed.

[Ten98]

Yes. Buying silver is a great idea, when it has fallen below 10$ in the next 1-3 years.

Wait what, it has fallen below 10$ in the next 1-3 years??

You're mixing past tense and future tense in the same sentence there bud.

If you're trying to say you predict it will fall below $10 in the next 3 years then I guess I can't argue, since none of us have a crystal ball which can look into the future...

However, with Fiat currency devaluing every single day, the amount of Silver in the world being finite and the cost of mining always on the increase, I can't really see it happening. If anything silver is very cheap at $40 and an absolute steal at $30.

Hang on to see where today's dip ends up and then buy buy buy!!

[pekv2]

Sounds good. I was thinking about picking up a few bars of silver in the near future, maybe 5 months down the road from now.

[miscreanity]

So, sounds like we should start buying and holding onto that silver for a few years, aye?

Yes, but gold is the prime monetary metal. Hold some of each, even if it's a fraction of an ounce in gold.

[miscreanity]

Hang on to see where today's dip ends up and then buy buy buy!!

If you aren't aware of the GLD Puke Indicator, it's been extremely accurate in determining the lows. If I had been aware of this in 2008, I'd be a billionaire right now.

Source information.

[S3052]

Yes. Buying silver is a great idea, when it has fallen below 10$ in the next 1-3 years.

Wait what, it has fallen below 10$ in the next 1-3 years??

You're mixing past tense and future tense in the same sentence there bud.

If you're trying to say you predict it will fall below $10 in the next 3 years then I guess I can't argue, since none of us have a crystal ball which can look into the future...

Correct. I predict it will fall to below 10$. If you buy at 30$ you will catch the falling knife.

[CurbsideProphet]

Here's the interesting part: Silver as a commodity "should" be trading at a ratio of roughly 10:1 to the price of Gold, given global conditions of supply and demand. However, since the Silver price has been destroyed recently along with stock prices, it is currently around 40:1.

Now that Silver is being treated like a precious metal and not a stock, most serious investors expect the price to come up to between 20:1 and 15:1 in the next 2-3 years and then slowly slowly make its way to 10:1, a short term gain of 100 to 200 percent and a long term gain of 400!

The thing about ratios is there's a numerator and a denominator.  We could return to those ratios without silver moving substantially to the upside.  The price of gold would just have to come down.  And as you can see over the last two days, that can happen rather quickly.

[MatthewLM]

Has anyone even mentioned that silver futures are in backwardation? You'd be silly to miss it.

[Ten98]

Correct. I predict it will fall to below 10$. If you buy at 30$ you will catch the falling knife.

Well fair enough, although you haven't said what that prediction is based on. I assume you're just guessing.

I predict $30 as the absolute minimum price for the next 5 years at least, with $80 as the top price. This is based on historic and projected demand vs. global capacity to supply.

[Ten98]

Here's the interesting part: Silver as a commodity "should" be trading at a ratio of roughly 10:1 to the price of Gold, given global conditions of supply and demand. However, since the Silver price has been destroyed recently along with stock prices, it is currently around 40:1.

Now that Silver is being treated like a precious metal and not a stock, most serious investors expect the price to come up to between 20:1 and 15:1 in the next 2-3 years and then slowly slowly make its way to 10:1, a short term gain of 100 to 200 percent and a long term gain of 400!

The thing about ratios is there's a numerator and a denominator.  We could return to those ratios without silver moving substantially to the upside.  The price of gold would just have to come down.  And as you can see over the last two days, that can happen rather quickly.

Indeed it can and has, but you'd be extremely foolish to assume that it won't bounce right back up again and continue on the steady upward path it's been treading for the past 1000 years.

The great thing about the Silver ratio is that even in a downtrend the ratio still narrows, so that when we come out of the downtrend and back into the uptrend you're stronger than ever.

[kjj]

I'd bet a million bitcoins silver wont go below $20 in the next two years but I don't have a million bitcoins.

So, put your money where your mouth is. What about betting 10 BTC or 50 BTC. I am sure you have at least 10 BTC, or 50 BTC.

I would be willing to make that bet at 10 BTC.  I propose these terms:

If NY spot silver closes below $20.00 on any day between now and August 25th, 2013, I will pay you 10 BTC.  If it doesn't close below $20.00 on or before that date, you will pay me 10 BTC.  The official data source will be the chart labelled "24 Hour Spot Silver (Bid)" on this page.  In the unlikely event that Kitco isn't around for the duration, or makes changes to that page or chart, we both agree to make a good faith effort to find a new official data source, and if that effort fails, the bet will be voided.

[miscreanity]

In the unlikely event that Kitco isn't around for the duration, or makes changes to that page or chart, we both agree to make a good faith effort to find a new official data source, and if that effort fails, the bet will be voided.

Is there going to be a distinction between paper silver and physical silver, with SLV and futures or anything leveraged being paper?

Stockcharts is an excellent source.

Otherwise, GoldMoney also has an excellent silver chart.

A lot of other sources rely on Kitco's data feed.

Oh, nice image kjj - I doubt many would know what language that is.

[kjj]

The Kitco charts, as far as I know, represent the physical market.  Currently, the physical and paper markets are pretty tightly coupled, so they are essentially the same, not counting premiums.  If the markets decouple, I expect that chart to rise with the physical.  If I'm wrong, and the chart shows a low price while the premium for physical skyrockets, I'm willing to lose the 10 BTC on a technicality.

[miscreanity]

The Kitco charts, as far as I know, represent the physical market.  Currently, the physical and paper markets are pretty tightly coupled, so they are essentially the same, not counting premiums.  If the markets decouple, I expect that chart to rise with the physical.  If I'm wrong, and the chart shows a low price while the premium for physical skyrockets, I'm willing to lose the 10 BTC on a technicality.

That's my understanding as well. It is hard to tell whether they'll decouple within the next year, and they are your Bitcoins, so fair enough.

[Ten98]

Looks like the dip is over for both Silver and gold this afternoon, the Asian markets are buying like crazy.

I'm waiting until tomorrow to confirm $40 is a hold price, but if the price carries on rising again it's time to BUY BUY BUY.