My name is Shawn Ozbun, and our goal is to keep you up to date with what’s going on in the world of Gold and Silver by providing you with current news and precious metals pricing.
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Welcome back to the SilverTowne Vault Cast, It’s Thursday and as always I’m pumped to be back here speaking to all of you. Today I’m going to cover an article that talks a bit about the Gold to Silver ratio. I’m also going to cover some history of gold and then another short article at the end that claims there is a run on bullion. I think that you are going to find all of this information extremely interesting.
Now lets get into today's precious metals pricing!
Gold - $1401.05 Up $7.74
Silver - $22.58 Up $.13
Platinum - $1456.00 Up $4.50
Palladium - $751.00 up $7.00
Gold Silver Ratio Redux
Trading Ratios, Mining Supply and Investment Grade Metals
The recent 62 to 1 trading ratio of silver to gold clearly favors buying silver over gold, especially given a host of other favorable factors.
These include: bullish fundamentals, a likely bottoming technical picture in an oversold environment and a favorable COT sentiment structure.
Furthermore, from a historical perspective, silver’s price has traded at a much lower 13 to 1 ratio relative to that of gold on average, making the precious grey metal seem very cheap relative to its yellow alternative.
The mining supply of silver is always rather difficult to verify because of silver’s mixed history as a monetary metal, a currency and a commodity.
When it comes to looking at the supply of metallic silver (Ag) versus metallic gold (Au), yes gold is currently available, but at what price?
The ratio of silver to gold in above ground investment form is one ounce of silver to five of gold, as a conservative estimate. Silver is actually considerably scarcer than gold in its investment grade form, and this could create a much bigger problem for the market in an environment where investment demand for silver is rising notably.
Both silver and gold can function as an unencumbered ultimate or final payment. Both monetary metals have acknowledged intrinsic value and are widely recognized as a form of currency.
Furthermore, the price of gold is ultimately confidence driven as fear and greed compete to set a market price. The supply of gold actually seems less important to its price than what people are willing to pay for the security it offers.
The silver market seems less affected by such confidence factors, perhaps because of the steady industrial drawdown. Nevertheless, the current price ratio is so extremely distorted that rising costs of silver production could propel the price of silver beyond current expectations, and then ignite the price of gold as well.
Obviously, the price of silver has been ‘well managed’ over the last two years of trading, as large, concentrated short positions have been established and maintained in the paper silver futures market by big bullion banks. In determining the current market price for silver, the physical investment demand profile for the precious metal has clearly been trumped by paper trading. Read More...
A Brief History and Outline of Gold as a Precious Metal
Mankind's Fascination With Gold
Gold has fascinated people for thousands of years, and has been an object of desire in civilizations the world over. While Gold does have some industrial applications in semi-conductors, use as filling for teeth, and other applications, humanity's primary interest in Gold stems from its appearance and use for making jewelry. While these qualities may seem superficial, they actually make Gold a highly sought after commodity that has consistently held value over time. This, in turn, made Gold the most popular monetary asset throughout history and up until the end of the Gold standard in 1971.
Just think, wars have been fought, lands conquered, and civilizations brought to their knees all because a particular metal happens to gleam in the light. And much of the reason why Gold holds so much value today is also due to its attractive nature. While some people may find this superficial, throughout history Gold has proven to be highly sought after by civilizations around the world due to its attractive nature.
Interestingly, most of the world's Gold resides at the core of the Earth, so you could literally say that the world has a “heart” of Gold. Gold is a heavy metal, so when the Earth was formed, most of it sunk to the center of the Earth. In fact, most of the Gold that resides in the Earth's crust was deposited by meteors. So far only 171,300 tonnes of Gold has been mined and many analysts now believe that most of the Gold in the crust of the Earth has been discovered and mined. This limited supply should help Gold keep its value and appreciate in the years to come. Basic economic theory states that so long as demand outstrips supply, prices will rise. The limited supply of Gold, in combination with increasing demand, should cause prices to rise.
Gold has also proven to be a great investment for many people. If you were lucky enough to have invested in Gold in 1971, before the U.S. government took the U.S. dollar off of the Gold standard, you would have probably purchased your gold for under $45 dollars per troy ounce. Now that troy ounce would be worth approximately $1,400 dollars. That's a huge return that can be matched by few stocks or other investment vehicles!
The long history of Gold and humanity's continuous fascination with the precious metal; combined with its valuable uses, suggests that it will be a highly sought after commodity for years to come. As a durable metal that is able to preserve its qualities over time, and a metal that is in extremely short supply, investors should feel confident that prices will rise over time. These are just some of the reasons why many investors now prefer Gold to stocks, bonds, and cash-in-hand. Read More...
Bank Run Happening in Bullion
Jim Willie, Editor of The Hat Trick Letter, says the recent gold price take-down has caused, “A bank run in gold bullion banks. It’s a vault run. . . . Wealthy investors are asking for their gold, and some are finding out it’s not there.” Jim Willie, who holds a PhD in statistics, says things are getting worse. Dr. Willie contends, “Back in 2011 and 2012, you had an important event every three of four months. Now, it’s every two or three weeks. So, the mean time between failures is rapidly declining.” Dr. Willie goes on to predict, “Before, they were talking about stress tests. Now, they realize that all of them in the past were a fraud. So, they are talking about ‘bail-ins’ because they are expecting failures.” Dr. Willie contends, “It’s all coming to a climax where gold is going to be central with a gold-trade central bank and gold priced at $7,000 per ounce.” Read More...
For the best source for acquiring gold and silver please contact Silvertowne at 1-877-477- coin, that’s 1-877-477-2646 or you can visit us at www.silvertowne.com. Silvertowne has been a trusted precious metals and numismatics dealer since 1949.
One of the most common ways to invest in silver is with silver ingot . They are affordable, portable and easy to stack and store. Popular SilverTowne Trademark Silver Bars, featuring a classic prospector and his donkey, are guaranteed .999 fine silver and available in 1, 5 and 10 ounce sizes and SilverTowne is currently offering free shipping for these ingots. Contact Silvertowne today.
[Disclaimer] Shawn Ozbun is not a licensed financial adviser, there is risk associated with all investment including gold and silver. You should seek advise from a licensed financial expert before making a purchase.
