Silver Monitoring Thread £ (GBP) only.

[gji25]

On 26/05/2023 at 14:51, HonestMoneyGoldSilver said:

Super complex question but the TL:DR figure according to my research based on AISC (All-in Sustainability Cost) is $18 and rising. Many major PM and base metal producers are in countries with high inflation - e.g. Mexico, Turkey, Peru, Russia, etc. Then other major producers like Canada, USA, Australia, Poland also have inflationary pressures. Some major mining corps would become unprofitable at $20, e.g. Endeavour Silver Corp. Others would remain profitable until $15-16. If you're asking when all mines would become unprofitable it's probably around $13 but there's only a handful in the world, mostly in 3rd-world countries like Burkina Faso, that can sustain that price. Those operations are part of larger global concerns so even if some mines may be profitable at $13, the combined AISC across all operations would make the conglomerate unprofitable. There is no such thing as "can't go below this price" as silver is a necessary commodity and could be subsidized by the state such as with energy in recent years or the financial system in 2008.

Another source of complexity is that silver-only mines account for 17-25% of total production - the other 75-83% comes from multi-faceted gold and base metal operations

https://www.thesilverforum.com/topic/368-silver-monitoring-thread-£-gbp-only/?do=findComment&comment=848171

This leads me to believe the current average AISC for the major silver mines is $18 and that this floor is currently rising. (Silver and gold usually occur together in the same deposits although it's possible to find them individually. Arguably silver is a "by-product" of many mining operations focussed on gold and base metals such as copper, zinc, lead, etc, and sometimes vice-versa, base metals are a by-product of PM mining). Here is a brief summary of the AISC figures and YoY changes I'm talking about:

1. Pan American Silver Corp (PAAS, Canada, Latin America) - $17.97/oz (+ 10% YoY)
2. SSR Mining Corp (SSRM, Turkey) - $15.91/oz (+29% YoY)
3. Hecla Mining Company (HL, United States) - $14.20/oz (+11% YoY)
4. Fortuna Silver Mines Inc (FVI, Canada, Latin America, Burkina Faso) - $14.46/oz (-8.8% YoY)
5. Endeavour Silver Corp (EXK, Mexico) - $20.27/oz (+16% YoY)

Average AISC for those companies (Q3 2022) is $16.56. It seems obvious that as AISC goes up (which is the way it's definitely trending with inflation, energy, labour, finance, ESG, etc) or down, that this would correlate strongly with the spot price of these metals, although this relationship is perhaps not as robust as one might expect. Regardless, if the spot price goes below the AISC, the mines will reduce or stop production as you can't run a business indefinitely that is unsustainable/unprofitable. It is my hypothesis that the absolute bottom of the market for silver was/is $18/oz and that it's unlikely to remain below $20/oz never mind $18.

The Pearson's r coefficient between silver and gold ranges between 0.7-0.9 depending on observation period, which is strong to very strong - broadly speaking their price action is mirrored. The coefficients (which vary depending on observation period) between gold, silver and base metals are also positively correlated although in the moderate to strong range as opposed to very strong. For reference the coefficient between BTC and ETH is around 0.89 depending on observation period. We observe that virtually every time BTC or ETH go up or down, the other (and the entire market in the case of BTC) will follow this price action. The relationships between precious metals and base metals are well understood. A massive drop in silver would in all probability coincide with a large drop in gold and also a significant drop in base metals prices, which may affect the AISC (All-in Sustainability Cost) dramatically

 

 

There is no high inflation in russia 

[EdwardTeach]

 

 

[SidS]

Silver will be max £19.99 by December 2024.

Lets see how well this prediction ages! 😁

[FriedrichVonHayek]

25 minutes ago, SidS said:

Silver will be max £19.99 by December 2024.

Lets see how well this prediction ages! 😁

I think the Gold/Silver ratio will be around 60 by December 2024.

If your prediction is true the Gold/Silver ratio is going to widen massively, if doesn't it means that Gold will also do nothing.

[gji25]

wonga was wrong/ buy now. its a no brainer 😃

 

[MBTPSilver]

Quite the dip this week. I'm holding off from adding any more for another few weeks to see what the Fed do at their next meeting. Definitely feeling the urge to top up though 😅 I think £16.50 - £17.50 is possible though in July.

[HonestMoneyGoldSilver]

2 hours ago, MBTPSilver said:

Quite the dip this week. I'm holding off from adding any more for another few weeks to see what the Fed do at their next meeting. Definitely feeling the urge to top up though 😅 I think £16.50 - £17.50 is possible though in July.

The way this is going it could be possible by tomorrow 😢

[gji25]

To understand what is real and tangible in the silver market, it is crucial then to grasp the difference between paper silver and physical silver, and how paper silver is traded in practically unlimited quantities, while physical silver is a scarce and valuable commodity that plays a role as both an investment precious metal and an industrial precious metal.

In short, physical silver is a real tangible asset with intrinsic value, that has no counterparty risk and is difficult and costly to mine. Paper silver is not.

Paper silver is altogether different, comprising securities and derivatives spanning unallocated, synthetic, and fractionally-backed claims that do not provide any ownership of real physical silver.

[SidS]

Has silver hit £20 per oz yet? Asking for a friend. 😉

[theman73]

1 hour ago, SidS said:

Has silver hit £20 per oz yet? Asking for a friend. 😉

Has gold hit £1700 per oz yet? Asking for a friend. 😉

[Paul]

2 hours ago, SidS said:

Has silver hit £20 per oz yet? Asking for a friend. 😉

It hit £30oz over a decade ago if that helps 

[monkey]

Could be headed for £14/oz before moon if it brakes the support line I have drawn.

[SidS]

33 minutes ago, Paul said:

It hit £30oz over a decade ago if that helps 

I'm sure I was buying then too! 😁

[Paul]

2 hours ago, SidS said:

I'm sure I was buying then too! 😁

Me to

[monkey]

9 minutes ago, Paul said:

Me to

Cash cost averaging will help lessen the falls from the peaks. My first purchase was at £21/oz in August 2020. I FOMO'ed in due to lack of educating my self. Kept buying since (aiming for lows) and have negated the losses of the first purchase 🙂

[gji25]

This cycle at the moment is a rinse cycle. give it a month or two then we will have the squeeze cycle.

Edited July 4, 2023 by gji25
typo

[EdwardTeach]

9 hours ago, gji25 said:

This cycle at the moment is a rinse cycle. give it a month or two then we will have the squeeze cycle.

Would you mind explaining what rinse and squeeze cycles are for the dumbos like me who don’t already know. I did an internet search for ‘rinse and squeeze cycle’ but it just brought up lots of pages about washing machines and dish washers.

Edited July 5, 2023 by EdwardTeach

[SidS]

13 minutes ago, EdwardTeach said:

Would you mind explaining what rinse and squeeze cycles are for the dumbos like me who don’t already know. I did an internet search for ‘rinse and squeeze cycle’ but it just brought up lots of pages about washing machines and dish washers.

I thought it was about washing machines. Is it hot fill or cold fill? 😉

[HonestMoneyGoldSilver]

Wow silver just bounced £0.25 in the time it took me to refresh the main page

[Paul]

18 minutes ago, HonestMoneyGoldSilver said:

Wow silver just bounced £0.25 in the time it took me to refresh the main page

. . . . . to da'1980-all-time-High !

[HonestMoneyGoldSilver]

1 minute ago, Paul said:

. . . . . to da'1980-all-time-High !

.... and lost it again almost as quickly 😂

I wish I understood these mini boom and bust cycles 

[monkey]

Looking like a little bear flag to me at the moment. Long term very bull though.

I think were in the midst of the last dip before the climb.

[theman73]

25 minutes ago, HonestMoneyGoldSilver said:

.... and lost it again almost as quickly 😂

I wish I understood these mini boom and bust cycles 

It's the middle finger from market manipulators

[EdwardTeach]

1 hour ago, HonestMoneyGoldSilver said:

.... and lost it again almost as quickly 😂

I wish I understood these mini boom and bust cycles 

It’s what us experts call the ‘quick wash’ cycle. It’s combines a shortened wash time at lukewarm temperatures with an extra-high-speed spin for reduced ETF and paper SLV selling times.

Edited July 5, 2023 by EdwardTeach

[HonestMoneyGoldSilver]

1 minute ago, EdwardTeach said:

It’s what us experts call the ‘quick wash’ cycle. It’s combines high speed tumbling, a shortened wash time at lukewarm temperatures and an extra-high-speed spin for reduced paper SLV and ETF selling times.

Pirates, one might say!