The coming Gold crash

[TheApe]

24 minutes ago, Stuntman said:

Well I hope it does dip to $400 for at least a week in September 2020 and when all UK dealers have full physical inventories.  We can all back up the truck!

I have somewhat less confidence than our esteemed OP that the above is somehow going to happen.

Would be nice to get some cheap gold.

But it's enjoyable watching Wonger lose his money too 😄

[silverin]

Stil waiting for that dip!!!  Last purchase was December 2017 😁

[Prophecy]

41 minutes ago, silverin said:

Stil waiting for that dip!!!  Last purchase was December 2017 😁

I'm still waiting for that dip... my last purchase was July 2005 @ £240. I jest.

[Prophecy]

Just for ***** and giggles I went on the Bank of England interest calculator. It's a fun thing that. It goes back to medieval days so you can pretend how much you would have got paid in your current salary value back whenever. https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator

Then I thought... if £1 was 1 sovereign back in the day, I'll pick a random date and work back from there to see how much i would have if i had those same sovs now.

Take £1000 now. Transport its fiat value back to, say, 1914 (before sovs were 'withdrawn'). You would have got just under 9 sovs for that.

Now, take those 9 sovs and time machine it back to now and the combined value of them would be c.£3000 spot... 

So. Could gold be 3x overvalued right now! Could it really be worth.... a third of current prices (£480)... therefore hitting pretty close to Wonglers crash claim (£400).

I jest again.

Edited July 3, 2020 by Prophecy

[MancunianStacker]

39 minutes ago, Prophecy said:

f £1 was 1 sovereign back in the day,

Also...

One pound (a Gold sov) in Silver (Ozs in a Pound) would be 16oz of silver.

£22 per oz of physical silver x 16 = £352 

£352 will just about buy a sovereign now.

So all the people who say silver is massively undervalued may be wrong??? It’s bang on what it always was. In £s Sterling that is 😉 

Edited July 3, 2020 by MancunianStacker

[Prophecy]

[Rocky2000]

10 hours ago, MancunianStacker said:

Also...

One pound (a Gold sov) in Silver (Ozs in a Pound) would be 16oz of silver.

£22 per oz of physical silver x 16 = £352 

£352 will just about buy a sovereign now.

So all the people who say silver is massively undervalued may be wrong??? It’s bang on what it always was. In £s Sterling that is 😉 

I don’t follow this at all, can you explain?

 

at the moment silver is worth 1% of gold gram for gram. How can you not agree it is historically massively undervalued?

[MancunianStacker]

2 hours ago, Rocky2000 said:

I don’t follow this at all, can you explain?

 

at the moment silver is worth 1% of gold gram for gram. How can you not agree it is historically massively undervalued?

I’ll try.

A Sovereign is/was already classed as £1/One Pound Sterling.

In a Pound of weight, there are 16ozs.

Historically £1/One Pound contained 16ozs of Silver

16 ozs of Silver should therefore buy £1/One Pound in Gold.

In today’s money a £1 Gold Sovereign is £350 ish and 1oz of (physical) Silver is £22. Manipulated paper prices not applying.

16 Silver Ozs @ £22 each is £352 = One Sovereign/£1/One Pound.

I’m not comparing one oz to one oz. Simply the fact that the historical ratio has remained the same in physical prices.

Just a bit of fun 

[KDave]

Is it fair to compare a single sovereign to 16 oz of silver? This is very interesting if the case and explains the GSR. Silver then becomes seriously overvalued at the previous GSR lows, rather than seriously undervalued as is proclaimed by many today at our recent records.

Edited July 4, 2020 by KDave
lows not peaks

[MancunianStacker]

4 minutes ago, KDave said:

Is it fair to compare a single sovereign to 16 oz of silver? This is very interesting if the case and explains the GSR. Silver then becomes seriously overvalued at the previous GSR lows, rather than seriously undervalued as is proclaimed by many today at our recent records.

No. Today is a real comparison of 1oz of Gold to 1oz of Silver in $/£/€ so today’s comparison is correct (I suppose).

Just an odd comparison I noticed in the prices and weight. 

[MancunianStacker]

Maybe 16:1 was just the average ratio that came out of the ground in the old days. With today’s techniques I guess a lot more Silver is being extracted than before. Who knows the real, real truth?

[MancunianStacker]

https://www.investopedia.com/articles/investing/080316/historical-guide-goldsilver-ratio.asp
 

Quite a good read on the history. 12:1 then 15:1 was the historical ratio it seems. I doubt it will ever go back down to these levels (efficiencies in mining).

[Prophecy]

Going by my, albeit silly, time machine experiment stating that gold, if mapped to BoE interest since 1914 should be £480/ozt then the current price of silver at traditional ratios is 2x undervalued. So, Gold - 3x overvalued. Silver - 2x Undervalued.

This view is not serious though.

Edited July 4, 2020 by Prophecy

[Martlet]

Worth noting at the time of creation of the sovereign (1816 Coinage act), £1 was 20 shillings.  Those weigh 5.6g each so 112g, less than a third of a troy pound.  And thats sterling silver, so lose 7.25% silver.  Silver was not legal tender for values above £2 as a result of the new coinage too, interesting for all the what is money debates.  Comparisons of gold to silver values through history fall apart as soon as you dig into detail.

Edited July 4, 2020 by Martlet

[Rocky2000]

4 hours ago, MancunianStacker said:

Maybe 16:1 was just the average ratio that came out of the ground in the old days. With today’s techniques I guess a lot more Silver is being extracted than before. Who knows the real, real truth?

No it’s halved.

 

for 4500 years 16:1 now it’s 8 or 9 ounces of silver for every ounce of gold

[MancunianStacker]

31 minutes ago, Rocky2000 said:

No it’s halved.

 

for 4500 years 16:1 now it’s 8 or 9 ounces of silver for every ounce of gold

It should be much more expensive then. The question is why is it so cheap???

[MancunianStacker]

“The global gold production is 2500 tonne/year and the global silver production from mines is an order of magnitude higher or 23,000 tonne/year.”

Source: https://www.sciencedirect.com/science/article/pii/S0921344913002747

So 9.2oz of Silver to 1oz of Gold mined 

A lot of good info from this source about when mining will end etc. 

[Rocky2000]

3 hours ago, MancunianStacker said:

It should be much more expensive then. The question is why is it so cheap???

One word

 

manipulation

[Martlet]

33 minutes ago, Rocky2000 said:

One word

 

manipulation

Manipulating how much is mined?

[KDave]

It does not matter how much silver is mined compared to gold in regards to the price of either metal. 

[isaacyzzz]

BofA Raises 18-Month Target Price for Gold to $3,000

 

[MancunianStacker]

11 hours ago, KDave said:

It does not matter how much silver is mined compared to gold in regards to the price of either metal. 

True, it's a bit like comparing coal and diamonds I suppose.

[Arongoldprog]

https://www.cnbc.com/2020/06/19/goldman-hikes-gold-price-forecast-on-debasement-fears-and-a-weaker-dollar.html

Goldman revised the already revised 2020 gold predictions.

three-, six- and 12-month gold price forecasts to $1800/1900/2000/toz

 

[Wonger]

On 06/07/2020 at 00:09, Arongoldprog said:

https://www.cnbc.com/2020/06/19/goldman-hikes-gold-price-forecast-on-debasement-fears-and-a-weaker-dollar.html

Goldman revised the already revised 2020 gold predictions.

three-, six- and 12-month gold price forecasts to $1800/1900/2000/toz

 

😁

[Wonger]

Commercials are net short 311,000 contracts, Tick Tock 😉