Silver Monitoring Thread £ (GBP) only.

[silversky]

My view is that if the figures start showing that 'hyperinflation has been averted', and that 'central banks have saved the world', (), then the industrial reasons for Silver (like copper) will start to look promising.

Apologies for the different type of graphs, but here is a graph of copper back to 2016 (in USD) vs Silver in ££s of the same timeframe.  They are not too dissimilar.  If the economic collapse through inflation is averted, I expect Copper will start to rise, and by extension, this will signal an increase in industrial demand for Silver again.

 

[modofantasma]

2 hours ago, silversky said:

Apologies for the different type of graphs, but here is a graph of copper back to 2016 (in USD) vs Silver in ££s

It would be a better/more accurate comparison to show both in USD to clear the currency fluctuations 

[gji25]

forget all the fancy charts imo and use basic mathamatics.

basel 3 compliant gold = 10.5% the bank has to phyically own which in reality the silver to gold ratio should be about 9 to 1

[Thelonerangershorse]

47 minutes ago, gji25 said:

forget all the fancy charts imo and use basic mathamatics.

basel 3 compliant gold = 10.5% the bank has to phyically own which in reality the silver to gold ratio should be about 9 to 1

I have a tube of silver Brits that I'll quite happily swap if you have a couple of gold ones, that's a ratio of 12.5 to 1 so you'll be quids in.

[gji25]

23 minutes ago, Thelonerangershorse said:

I have a tube of silver Brits that I'll quite happily swap if you have a couple of gold ones, that's a ratio of 12.5 to 1 so you'll be quids in.

i said should be about 9 to 1. i did not say that it is 

Whether you’re driving a car or walking into a room, your peripheral vision helps you move around safely. It lets you see things without moving your head

But some conditions can interfere with peripheral vision and lead to tunnel vision, also called tubular vision. This type of peripheral vision loss affects your 360-degree visual field.

 

 

Edited July 22, 2023 by gji25
info

[HonestMoneyGoldSilver]

I've been running around telling everyone there will be a dip this week. Yesterday the Fed hiked, as expected, and gave forward guidance they will probably hike again. So I'm sitting here yesterday looking like a twat while silver mooned. Then today it has taken quite a large dip, almost 3%, along with gold (1.25% as we speak)

I have mixed feelings. I was happy to be wrong and I'm also somewhat validated to be right. The real question though is WHAT HAPPENED? 

Why on earth did silver moon yesterday when there was a high chance of a dip if the Fed hiked? 

The only rational explanation is JPM and Friends once more were fiddling with the buttons. Did they really intentionally pump the price yesterday to increase their margin for today's dip? What utter bar stewards 

[theman73]

26 minutes ago, HonestMoneyGoldSilver said:

Did they really intentionally pump the price yesterday to increase their margin for today's dip?

Yes, business as usual

[SidS]

Has silver got to £20 yet? When we get to £25 per ounce, I will start selling some. But I'm underwater if I sell for less.

2030? 2035?

[theman73]

9 minutes ago, SidS said:

Has silver got to £20 yet? When we get to £25 per ounce, I will start selling some. But I'm underwater if I sell for less.

2030? 2035?

What kind of silver do you have that you need the spot price to be £25?

[SidS]

1 minute ago, theman73 said:

What kind of silver do you have that you need the spot price to be £25?

My sterling flatware needs to be £25 to make a profit.

My Swiss, LMU, UK pre-47, USA pre-65, Third Reich silver and MT thalers are already near or in profit - certainly so by £20 per oz. As are my cigarette cases they were in profit at £15 per oz.

My Russian silver roubles will probably need to be closer to £30 per ounce to break even. I guess my pre-1920 silver might be close to that mark - although I'll never sell my pre-1920. Same for my silver Albert chains.

I guess my pre-1816 silver needs to be closer to £50 per ounce! But I bought those cos I like them.

[theman73]

15 minutes ago, SidS said:

My sterling flatware needs to be £25 to make a profit.

My Swiss, LMU, UK pre-47, USA pre-65, Third Reich silver and MT thalers are already near or in profit - certainly so by £20 per oz. As are my cigarette cases they were in profit at £15 per oz.

My Russian silver roubles will probably need to be closer to £30 per ounce to break even. I guess my pre-1920 silver might be close to that mark - although I'll never sell my pre-1920. Same for my silver Albert chains.

I guess my pre-1816 silver needs to be closer to £50 per ounce! But I bought those cos I like them.

So you bought your silver with premiums which you intend to sell it in the future at scrap price?

I'm pretty sure you will recover your money even today at the £18.91 spot price.

If you buy with premium you will sell with premium, right?

[SidS]

22 minutes ago, theman73 said:

So you bought your silver with premiums which you intend to sell it in the future at scrap price?

I'm pretty sure you will recover your money even today at the £18.91 spot price.

If you buy with premium you will sell with premium, right?

My theory is not as mad as it may first seem. Yes I bought collectable and historic/numismatic silver as I wanted exposure to two markets - silver and numismatic/antique.

My approach goes, wait until the scrap price reaches what my premium was at purchase (which it should), then that gives me a base floor price which is what I paid. The premium will then be pure profit. This has worked well for me in the past. Of course with cost averaging I am probably close to some profits, as a lot of the silver was purchased at $5-$12 per oz. But to max my profit margins, I'd be quids in at £25 per ounce and then I would switch back to gold.

There was some thought that went in when I purchased. All my silver is priced up at scrap price - actually all mine is on the books at £12 per oz. Which is why I think I'm underwater.

[Stacktastic]

14 hours ago, HonestMoneyGoldSilver said:

The real question though is WHAT HAPPENED? 

Why on earth did silver moon yesterday when there was a high chance of a dip if the Fed hiked? 

A hike was factored in by the markets - nothing shocking happened so nothing changed.  
Silver is industrial so if there is less sign of a recession it will do OK. 
Recession then it will tank as demand will go down. Forward thinking of course.

We are going into one within 12 month anyway I think. 

Edited July 28, 2023 by Stacktastic

[silversky]

I think the rise in the US, before the drop, was just traders testing the market.  Finding out whether bad news is now irrelevant or not.  The rate rise was very much expected, so whether the rise was a reluctant one, (just because they promised to keep raising etc), is actually all that traders care about.  The price is determined by the perceived future, (obviously I know ), but it's worth remembering that it's a future discounting mechanism, hence 3-6 months out, if rates are going to go into reverse, this is what is being assessed.

I'm reading now that mortgage lenders in the UK are actually lowering their mortgage rates right now.  Didn't see that splashed everywhere yet, but the msm are usually late to any party, and by the time they're hyping a narrative to the masses the change has already happened.  The drop in inflation which I pointed out a while back, was more than expected, and HSBC has now led the way in reducing rates slightly.  This goes against the media narrative of hyperinflation and a mortgage crisis (and everyone running out of money for food etc).  I've had a feeling for a while that the talk has been a bit overblown. 

This would appear to be the first indication that the squeeze is passing, or at the least evolving.  Whether it will be the same in the US is what really matters to the global price for Silver, but the market gave an appearance of wanting to rise against the backdrop of a rising US rate.  To me, when bad news such as a rising rate can't immediately crush 4% off the price of an industrial commodity, this is an indication that the market is far more balanced than it appears.

Overall I'm ambivalent on the price for the next few months, and I think it's most likely that a trading range continues to be fought over for a while before any stellar rise takes hold. I might have to sell some of my stack in the coming weeks to fund another project, and it would certainly be nice to see a return to May's prices before that, but I'm not holding my breath.

Edited July 28, 2023 by silversky

[silversky]

Moneyweek has an article on their website discussing the slight reduction.

Edited July 28, 2023 by silversky

[HonestMoneyGoldSilver]

5 hours ago, SidS said:

Has silver got to £20 yet? When we get to £25 per ounce, I will start selling some. But I'm underwater if I sell for less.

2030? 2035?

£25/oz is in 2024 I'd guess Q2 onwards

4 hours ago, Stacktastic said:

A hike was factored in by the markets - nothing shocking happened so nothing changed.  
Silver is industrial so if there is less sign of a recession it will do OK. 
Recession then it will tank as demand will go down. Forward thinking of course.

We are going into one within 12 month anyway I think. 

Sure I get it, but if that hike was factored in on Wednesday then why did the arse fall out of it on Thursday? It seems odd to me. I'm gonna check the price action on Fed day for the past few years. I'm pretty sure (happy to be corrected) that the major price action happens on the day or overnight trading, not when JPM come in to work the next day, with markets going crazy for a few minutes then back to calm waters since

37 minutes ago, silversky said:

Moneyweek has an article on their website discussing the slight reduction.

If my mortgage was 7% I'd be having a fit. The highest rate I paid on mine was 1.99% and I felt robbed

As for the article you quoted I'm shocked they can call 0.03% a cut while keeping a straight face. Let's see if UK lenders cut or hike the week of August 3rd

Edited July 28, 2023 by HonestMoneyGoldSilver

[flyingveepixie]

5 minutes ago, HonestMoneyGoldSilver said:

£25/oz is in 2024 I'd guess Q2 onwards

Sure I get it, but if that hike was factored in on Wednesday then why did the arse fall out of it on Thursday? It seems odd to me. I'm gonna check the price action on Fed day for the past few years. I'm pretty sure (happy to be corrected) that the major price action happens on the day or overnight trading, not when JPM come in to work the next day, with markets going crazy for a few minutes then back to calm waters since

If my mortgage was 7% I'd be having a fit. The highest rate I paid on mine was 1.99% and I felt robbed

As for the article you quoted I'm shocked they can call 0.03% a cut while keeping a straight face. The Fed raised rates, not the BoE. Let's see if they cut or hike the week of August 3rd

Why do you think silver will hit £25/oz in 2024..?  Genuine question.   I can't keep up with all the manipulation that goes on.

I predict 0.25- 050 % up the way on August 3rd.

Edited July 28, 2023 by flyingveepixie

[silversky]

4 minutes ago, HonestMoneyGoldSilver said:

£25/oz is in 2024 I'd guess Q2 onwards

Sure I get it, but if that hike was factored in on Wednesday then why did the arse fall out of it on Thursday? It seems odd to me. I'm gonna check the price action on Fed day for the past few years. I'm pretty sure (happy to be corrected) that the major price action happens on the day or overnight trading, not when JPM come in to work the next day, with markets going crazy for a few minutes then back to calm waters since

If my mortgage was 7% I'd be having a fit. The highest rate I paid on mine was 1.99% and I felt robbed

As for the article you quoted I'm shocked they can call 0.03% a cut while keeping a straight face. The Fed raised rates, not the BoE. Let's see if they cut or hike the week of August 3rd

I agree that a big rise is coming. And your timescale is realistic as things stand.

I agree that it might not seem like much to see such fractional mortgage rate cuts.  But those fractions are not SVR.  They are the two year fixed deals, so there's some jiggery pokery magic to work out with perceived future rate drops.  This means that some bankers are seeing it as having topped at least.  Perhaps it indicates only a reduction of their risk premiums against further rate rises by the central bank.  I'm really just pointing it out as an indicator that not all is doom and gloom hyperinflation as the media would have us believe.  When rates are known to be constrained and falling (ie in the rear view mirror), industrial demand for Silver will already have taken off....

[HonestMoneyGoldSilver]

  

3 hours ago, flyingveepixie said:

Why do you think silver will hit £25/oz in 2024..?  Genuine question.   I can't keep up with all the manipulation that goes on.

I predict 0.25- 050 % up the way on August 3rd.

The most important factors are probably DXY and BXY, which are linked to the Fed Funds Rate/BoE Base Rate and wider macroeconomic conditions

The CBs (Fed, BoE, ECB) are due to pivot (skip, pause and CUT) either Q4 of 2023 or Q1 of 2024, possibly Q2 of 2024. The majority of money managers are predicting Q1 2024 with some predicting Q4 2023 and a roughly equal number opting for Q2 2024

Gold and silver are not acting as they "should". That's stating the obvious, they should have hit the moon by now 😂, but seriously, gold and silver should not be going on bull runs while the central banks are hiking rates, all else being equal. The fact PMs are priced where they're at, suppressed as the price may be, is hugely encouraging for a long-term stacker. When the CBs start cutting rates towards the 2-3% zone, the price of PMs should/will increase with inverse proportionality if not asymmetrically 

There are several other major factors like global geopolitics - conflict between the west and certain BRICS countries and affiliates, interactions within BRICS nations (BRICS gold/silver-standard currency, etc)

Outside the BRICS there are movements in various countries to issue gold-backed currencies or gold and silver-backed digital currencies - of particular interest are US states like Texas along with 14 other states and counting IIRC. They are going to make it a legal requirement for their state to hold physical precious metals in local (state) vaults. The digital currency (gold and silver-backed) in Texas would be fully transferrable to precious metals and illegal for the federal government to freeze/seize without a seriously good reason. Legislation like that will build public awareness within Texas and the USA as a whole. The USA isn't quite the behemoth it used to be but it's still the most important country (continent) in the world. If the USA goes in a particular direction the rest of the world will follow to at least some degree

There is the draining of physical precious metals from the COMEX and to a lesser extent, the LBMA. When physical supplies run out the price of the existing physical silver can only increase. That would be a major event like a silver short-squeeze that could temporarily spike silver to Pluto, never mind the moon. Hard to know what exactly will happen in that regard but the gap between the metals produced and sold (roughly equivalent to the paper-to-silver and paper-to-gold ratios on the US Debt Clock) looks set to continue to widen. At some point there will be a reckoning that the virtual market can't paper over (excuse the pun), and that will be when reserves at the COMEX and LBMA are depleted or nearly depleted. 

U.S. National Debt Clock : Real Time (usdebtclock.org)

Every month that passes we are getting closer to all of the above coming to fruition

There are numerous factors (I wrote an essay about many of them in this thread somewhere):

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

I won't go into AISC, ESG and cost of finance again, but TL:DR they are only going in one direction - UP. If it costs more to mine, refine, ship and manufacture silver products in particular, the price of physical silver can only go up

I understand silver is an industrial metal and most believe a recession is negative for silver. I fully understand and somewhat agree with those sentiments but it's not quite that simple. If/when/as there is a recession that will reduce demand across the economy as a whole but it's not uniform. Some sectors will crash, others will meander along and some will even boom during recession. It's like our cost of living crisis. It doesn't really matter how high the price of rent, mortgages, fuel and food go, the demand is inelastic (especially with food), that is to say an increase in price won't lead to a proportional decrease in demand or consumption. In the case of the economy it means other non-essential sectors will decline while the sums spent on essential sectors will increase. Perhaps staycations become really popular (as happened in Japan) and various enterprises around the UK will boom while Spain and France have a sharp decline

Anyway, recession or not I predict demand for silver will only increase. A lot of that is due to legal requirements, ESG, green drives, climate change, yada yada. You can't make a mobile phone, a solar panel or an EV without silver. The next generation of perovskite and iterative PV cells will require more silver, not less. If the global governments, including developing and 3rd-world countries who are yet to get on board with the green energy drive, keep their legislative push towards "green" energy, then demand for silver is going up regardless of recession. Again demand from developing and 3rd-world countries for electronics that require silver is trending in only one direction - to the moon

Sure, there may be peaks and troughs, lags and roundabouts, the time horizons are certainly not fixed, but we can count dozens of sound reasons why silver and gold should go up in price while counting very few reasons why it should decline in price. As soon as the Fed pivots then silver is going to $30+ which is roughly £23.32, so give it a month or two after the pivot, "rear-view mirror interest rates", and the price of silver is likely to reach and exceed £25/oz. Of course just my opinion, numerous complex and dynamic variables are involved. 

 

[gji25]

12 hours ago, silversky said:

Moneyweek has an article on their website discussing the slight reduction.

 

[silversky]

3 hours ago, gji25 said:

 

The supposed drop was on Thursday, after the 25th....  I guess that the drop will be reflected next week in the stats you're posting.

[silversky]

I see that most of Thursday's drop has been retraced.  I wonder what this week will bring?

I'm not convinced that this is ready for the big move upwards yet.  I think a good few more months are required before the kind of base that can support a big move has been built.  And I think that the central bankers hold the key for now.  Until the threat of them continuing to raise rates declines, we'll probably see little battles in this sort of range for a while.   And probably a big flash crash is required as well, just to clear out a load of longs.  I see that IG says that 81% of their clients are long.  That seems a bit one sided to me and liable to disappointment.

I don't see the BoE pausing in their rate rising quite yet.  But I do think the accompanying speech might talk of slowing the pace of future rises, just to cushion the blow a little.  They're pretty much following the lead of the US and ECB, so they're the ones to watch for a reduction in the pace of rises.

[silversky]

I think that another round of inflation is coming, and hence by extension further rate rises could be on the cards.

My reasons for this are the little reported hit on the chemical tanker near the port of Novorossiysk by Ukrainian / British ship drone.  To be fair to the BBC, they are now reporting it, but it happened a good 12 hours ago.

The purpose of these Western supported attacks, despite the media saying that Western allies are nervous about expanding the conflict to Russia itself, is to cripple Russia exports from the large black sea port of Novorossiysk.  If ship insurance from this port becomes unavailable, 2% of world oil supply will be shut down.  15% of wheat supply will also be shut down.  This is far more than any loss of supply from the Ukrainian grain deal, and the result will be a return to price inflation in energy (spreads to many other products) and wheat.  This inflation can be comfortably blamed on Russia ending the grain deal and most will not realise.  If this comes to pass, be prepared to pay a lot more for fuel again in the coming days and weeks.

Monday futures will be interesting....

Anyway, back on point, what will this do to other commodities including Silver?  Energy intensive mining for Silver could see temporary closures again, and a rise in price might be on the cards.  Or perhaps the threat of further headline inflation over the coming months might focus the fear in investors minds of even higher interest rates dampening down the PM sector.

Hard to know what to expect. (Edit): But further rate rises will definitely come if these attacks succeed in shutting down Novorossiysk through shipping insurance denial.  On balance, overall,  I think this could be neutral to bearish for the PM's, despite the political instability.

 

Edited August 5, 2023 by silversky

[CazLikesCoins]

3 minutes ago, silversky said:

I think that another round of inflation is coming, and hence by extension further rate rises could be on the cards.

 

Does it matter? Has anyone got enough gold put away to retire on? Not here, nothing much past a hobby for me and I wonder for how many others too. Nope, it's the good old state pension for me when I retire, if there's anything left in the pot. And if not, well, I've invested in ruddy good tent. Maybe spend the last of my days by a camp fire under a tarp watching the heavens and the stars. Maybe not. Probably be in an old folks home getting beaten to death.

[silversky]

8 minutes ago, CazLikesCoins said:

Does it matter? Has anyone got enough gold put away to retire on? Not here, nothing much past a hobby for me and I wonder for how many others too. Nope, it's the good old state pension for me when I retire, if there's anything left in the pot. And if not, well, I've invested in ruddy good tent. Maybe spend the last of my days by a camp fire under a tarp watching the heavens and the stars. Maybe not. Probably be in an old folks home getting beaten to death.

Only in as much as anything matters.  I'm simply musing on the implications for price as this development becomes clearer to investors over the coming weeks.  If shipping insurance is denied, the world's number one fertilizer hub would be taken offline.  It all depends on whether this new approach is condoned or condemned by our illustrious leaders.  If our ally is allowed (or even quietly encouraged) to continue this new course of action, inflation (and by extension further rate rises) is the most likely outcome.  Perhaps there are some who would wish their national debts inflated away, all the while blaming others for the inflation....

As you say, most of us here are just into gold or silver as a hobby.  But the price does matter, and I see turbulence coming if this development isn't immediately halted.