Why the drop in price?
I read a few comments on various forums from individuals that were curious why the drastic drop in silver and gold prices since yesterday. I could also see they were wondering if they should be worried.
Lets be realistic. Metals, stock market, the dollar, etc.. all have their ups and downs. But when you see ALL of them bump on the same day, you know it's because "Someone said something". In this case, it was good on Fed "Yellen". She mentioned no initial Fed rate increase, BUT that it could happen in December. That made all the major equity markets; DOW, Nasdaq, S&P, NYSE, as well as the metals and the dollar all drop at the same time. All this shows, is that it has nothing to do with the metals. It's simply people who bought quickly, driving the price up, thinking if the rates did rise and everything took off, that they could get in early. So they did a quick sell. (Gotta Love those HFT - High Frequency Traders). Basically, computers that can buy, sell, and hold numerous times in seconds.
This is why I always tell my readers to look at the trends over weeks and months. Can you time the metals? Nope, ain't going to happen. But you can get an idea of the direction. As I said back in the summer, I believe we are indeed at the bottom end of the metals market. In other words, while there will be daily ups and down, I do not forecast any dramatic drop to the $10-$13 range for silver. I think this is the bottom area.
For those, like myself, who do the dollar cost averaging, this is no big deal. We've been buying on a regular basis since the $35 range of 2012. Currently, we're averaging around $21 an ounce for silver. Does anyone reading this honestly think Silver won't get back to at least $21.00. Personally, I see the time when silver will be above $50. I think it's quite realistic for it to get up around $100. And I don't think that will require anything drastic in the economy or country. I think we've been in the Bear market of the metals over the last 3-4 years, and it will go up. And if the equity markets like the stock exchanges have a crash; which I believe it will, just like in 2008 but MUCH WORSE, then I believe silver and gold will go even much higher than last time. People will realize the safety in the metals.
So, when Silver gets back to $20-$30 an ounce, no one will even notice the difference between $15.65 and $16.05 an ounce. For those of you who haven't really gotten into buying silver and gold yet, but you've been reading and studying the subject........... GOD HOW I ENVY YOU!!! You are at the perfect time to buy. Buy what you can, when you can, and however much you can. 500 ounces at today's price, is about $9,000 when you include premiums to buy it. A couple years ago, that same amount would have cost you about $15,000. The one's who are skeptical and complaining, are the ones who bought 100, 200, 500 ounces back in 2012 when it was about $35 an ounce. They are still sitting there needing $35 an ounce just to break even. Now; for those who bought that one time lump sum as "INSURANCE" (Which is a great thing to do), then they aren't worried. They know, if the time comes where they need to use this insurance, it will be because of a major crash on their retirement, investments, etc. and the price of silver will be way over $35. But for the person who also buys silver and gold to hedge against inflation, to reduce debt, to buy things at a discount, etc..... then yea, that's why you should have done the "Dollar Cost Averaging". You wouldn't be sitting at $35 an ounce. You'd be around $21 an ounce.
But for you noob's out there getting ready to buy. THIS IS THE TIME. But "SilverEagle", what if the price drops? Shouldn't I wait?..... NO!!!!! First, don't try and time it. You can't be that lucky. But MOST IMPORTANTLY, what's the worst the price could go down? $13,,,,, $11...... $10...... So what if it goes to $10. If you buy today at $17 (Includes premium), that's still less of a drop from those who bought at $35 and it's where it is now. PLUS, look at the percentage. When people say something went up 100% (DOUBLED); is it easier to double from $10 to $20..... or is it easier to double from $20 to $40....... or double from $35 to $75??????? At today's prices, assuming you're buying for the right reason, this is a NO LOSE SITUATION.
Remember: Buying silver and gold are NOT AN INVESTMENT!!! If you want that, then go play with the Stocks, ETF's, IRA's, and all the PAPER METALS. Or at least go to another forum where someone will tell you the things you want to hear. I'm telling you right now, silver and gold are a STORE OF VALUE...... they are INSURANCE...... they are a HEDGE AGAINST INFLATION...... they are a PREPAREDNESS FOR ECONOMIC CRASH OR FIAT CURRENCY CRASH. In 1964, a gallon of gasoline cost around $0.25 per gallon. If you have a 1964 quarter in your possession right now,it is worth $2.86. Hmmmmmmmmm. That's STILL about the same price as a gallon of gas.
If you look at the price of gold in relationship to median average income in the United States, you'll see that gold (and silver) maintain their buying power. Realize, I'm presenting a snapshot of 3 single years. There are ups and down. Plus, I use 3 dates AFTER 1972, because prior to that, the gold standard had a greater affect because the price was fixed.
1975: Gold $160 an ounce..Median household income: $11,000. Ounce of gold is 1/68th of income
1985: Gold $310 an ounce. Median household income: $21,500. Ounce of gold is 1/69th of income
1995: Gold $385 an ounce. Median household income: $32,000. Ounce of gold is 1/84th of income
2015: Gold $1200 an ounce. Median household income: $53,000.. Ounce of gold is 1/44th of income.
Basically, gold has maintained it's value. Just as silver has done. Now some, may look at these numbers and say that in 2015, for gold to average 1/70th of today's average income of $53,000, gold SHOULD BE at $757 an ounce. Yes, mathematically, that's true. However, you have to look at a couple of things. If you look at the INFLATION ADJUSTED INCOME, it shows what the income THEN would equate to NOW. Every year, the adjusted median income rises. But starting in 2008, our adjust inflation rate, means our median income is worth LESS than it was in previous years. Today's $53,000 median income, is equal to 1998. Today's inflation rate, should have median income around $69,000-$72,000. That would make $1200 gold at about 1/60th. THEN, you have to through in a $19 TRILLION dollar debt in the USA. DOUBLE that of 7 years ago.
So in reality, based on inflation, based on unemployment, (Which is really closer to 9% and not the 5% the government is lying about), and the stock market bubble...... Gold today should be worth closer to $1400 today and silver should be at about $35. BOTH would still be in a position to rise further.
Anyway; don't worry about the slight drops here and there in silver and gold. Buy silver primarily, gold secondly, as insurance, hedge, store of value, etc. As history shows, your silver and gold will still be worth AT LEAST the same in 5, 10, 15, 20 years. Put those dollars in the bank or under your mattress, and during inflation and recession, they won't be worth anything. Silver and gold will protect you. You won't need to cash out your crashed 401K or IRA. It can sit and recover. You won't need to take out your savings account to offset bills. Your silver and gold will take care of you.
CYA: SE:
.
Lets be realistic. Metals, stock market, the dollar, etc.. all have their ups and downs. But when you see ALL of them bump on the same day, you know it's because "Someone said something". In this case, it was good on Fed "Yellen". She mentioned no initial Fed rate increase, BUT that it could happen in December. That made all the major equity markets; DOW, Nasdaq, S&P, NYSE, as well as the metals and the dollar all drop at the same time. All this shows, is that it has nothing to do with the metals. It's simply people who bought quickly, driving the price up, thinking if the rates did rise and everything took off, that they could get in early. So they did a quick sell. (Gotta Love those HFT - High Frequency Traders). Basically, computers that can buy, sell, and hold numerous times in seconds.
This is why I always tell my readers to look at the trends over weeks and months. Can you time the metals? Nope, ain't going to happen. But you can get an idea of the direction. As I said back in the summer, I believe we are indeed at the bottom end of the metals market. In other words, while there will be daily ups and down, I do not forecast any dramatic drop to the $10-$13 range for silver. I think this is the bottom area.
For those, like myself, who do the dollar cost averaging, this is no big deal. We've been buying on a regular basis since the $35 range of 2012. Currently, we're averaging around $21 an ounce for silver. Does anyone reading this honestly think Silver won't get back to at least $21.00. Personally, I see the time when silver will be above $50. I think it's quite realistic for it to get up around $100. And I don't think that will require anything drastic in the economy or country. I think we've been in the Bear market of the metals over the last 3-4 years, and it will go up. And if the equity markets like the stock exchanges have a crash; which I believe it will, just like in 2008 but MUCH WORSE, then I believe silver and gold will go even much higher than last time. People will realize the safety in the metals.
So, when Silver gets back to $20-$30 an ounce, no one will even notice the difference between $15.65 and $16.05 an ounce. For those of you who haven't really gotten into buying silver and gold yet, but you've been reading and studying the subject........... GOD HOW I ENVY YOU!!! You are at the perfect time to buy. Buy what you can, when you can, and however much you can. 500 ounces at today's price, is about $9,000 when you include premiums to buy it. A couple years ago, that same amount would have cost you about $15,000. The one's who are skeptical and complaining, are the ones who bought 100, 200, 500 ounces back in 2012 when it was about $35 an ounce. They are still sitting there needing $35 an ounce just to break even. Now; for those who bought that one time lump sum as "INSURANCE" (Which is a great thing to do), then they aren't worried. They know, if the time comes where they need to use this insurance, it will be because of a major crash on their retirement, investments, etc. and the price of silver will be way over $35. But for the person who also buys silver and gold to hedge against inflation, to reduce debt, to buy things at a discount, etc..... then yea, that's why you should have done the "Dollar Cost Averaging". You wouldn't be sitting at $35 an ounce. You'd be around $21 an ounce.
But for you noob's out there getting ready to buy. THIS IS THE TIME. But "SilverEagle", what if the price drops? Shouldn't I wait?..... NO!!!!! First, don't try and time it. You can't be that lucky. But MOST IMPORTANTLY, what's the worst the price could go down? $13,,,,, $11...... $10...... So what if it goes to $10. If you buy today at $17 (Includes premium), that's still less of a drop from those who bought at $35 and it's where it is now. PLUS, look at the percentage. When people say something went up 100% (DOUBLED); is it easier to double from $10 to $20..... or is it easier to double from $20 to $40....... or double from $35 to $75??????? At today's prices, assuming you're buying for the right reason, this is a NO LOSE SITUATION.
Remember: Buying silver and gold are NOT AN INVESTMENT!!! If you want that, then go play with the Stocks, ETF's, IRA's, and all the PAPER METALS. Or at least go to another forum where someone will tell you the things you want to hear. I'm telling you right now, silver and gold are a STORE OF VALUE...... they are INSURANCE...... they are a HEDGE AGAINST INFLATION...... they are a PREPAREDNESS FOR ECONOMIC CRASH OR FIAT CURRENCY CRASH. In 1964, a gallon of gasoline cost around $0.25 per gallon. If you have a 1964 quarter in your possession right now,it is worth $2.86. Hmmmmmmmmm. That's STILL about the same price as a gallon of gas.
If you look at the price of gold in relationship to median average income in the United States, you'll see that gold (and silver) maintain their buying power. Realize, I'm presenting a snapshot of 3 single years. There are ups and down. Plus, I use 3 dates AFTER 1972, because prior to that, the gold standard had a greater affect because the price was fixed.
1975: Gold $160 an ounce..Median household income: $11,000. Ounce of gold is 1/68th of income
1985: Gold $310 an ounce. Median household income: $21,500. Ounce of gold is 1/69th of income
1995: Gold $385 an ounce. Median household income: $32,000. Ounce of gold is 1/84th of income
2015: Gold $1200 an ounce. Median household income: $53,000.. Ounce of gold is 1/44th of income.
Basically, gold has maintained it's value. Just as silver has done. Now some, may look at these numbers and say that in 2015, for gold to average 1/70th of today's average income of $53,000, gold SHOULD BE at $757 an ounce. Yes, mathematically, that's true. However, you have to look at a couple of things. If you look at the INFLATION ADJUSTED INCOME, it shows what the income THEN would equate to NOW. Every year, the adjusted median income rises. But starting in 2008, our adjust inflation rate, means our median income is worth LESS than it was in previous years. Today's $53,000 median income, is equal to 1998. Today's inflation rate, should have median income around $69,000-$72,000. That would make $1200 gold at about 1/60th. THEN, you have to through in a $19 TRILLION dollar debt in the USA. DOUBLE that of 7 years ago.
So in reality, based on inflation, based on unemployment, (Which is really closer to 9% and not the 5% the government is lying about), and the stock market bubble...... Gold today should be worth closer to $1400 today and silver should be at about $35. BOTH would still be in a position to rise further.
Anyway; don't worry about the slight drops here and there in silver and gold. Buy silver primarily, gold secondly, as insurance, hedge, store of value, etc. As history shows, your silver and gold will still be worth AT LEAST the same in 5, 10, 15, 20 years. Put those dollars in the bank or under your mattress, and during inflation and recession, they won't be worth anything. Silver and gold will protect you. You won't need to cash out your crashed 401K or IRA. It can sit and recover. You won't need to take out your savings account to offset bills. Your silver and gold will take care of you.
CYA: SE:
.
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