Why The Prices of Gold and Silver Are Flat

[Smaulgld]

https://smaulgld.com/gold-and-silver-trading-range/

[Brian4Liberty]

Unfortunately, what we have is gold being relatively flat as measured by inflating fiat currencies, which really means that gold is losing value.

[timosman]

Unfortunately, what we have is gold being relatively flat as measured by inflating fiat currencies, which really means that gold is losing value.

Despite the claims of Ron to the contrary.

[Brian4Liberty]

Despite the claims of Ron to the contrary.

Ron is not making any claims to the contrary. Monetary inflation is a tricky thing, that does not "trickle down" very evenly. The price of gold is not inflating right now, which is a good thing for gold investors. Housing is inflating. Just wait until that bubble bursts. The other common avenue for investment for the Chinese is gold. The governments discourage purchases of gold so that they can continue their orgy of debt and monetary inflation.

At some point gold will be seen as an alternative to fiat currency and other investments (to the public in general), and then the price will reset to higher level, just as it did when it went from 750 to 1300 (with a bubble driving the reset). There will be another gold bubble, after which point it will level out to a new level that adjusts to monetary inflation. And if the fiat currencies completely collapse, you'll just have to price your gold in other commodities rather than useless fiat dollars. Eventually gold will be priced in a new global crypto-currency.

All of that is fairly certain, but the timing is unknown. Anyone that holds their breath waiting is a fool.

[Zippyjuan]

Gold tends to move up or down with the economy. Good or improving economy, gold is flat or falling. Bad economy- gold tends to rise. There have been two major peaks in the price of gold in the last 50 years. The first was in 1980. Inflation and unemployment were both double digits. As they came down, so did the price of gold- for the next 20 years it drifted down. The second peak was during the Great Recession. Gold peaked at $19,000 an ounce in 2011. The economy has been pretty stable lately and so has the price of gold.

[Smaulgld]

Unfortunately, what we have is gold being relatively flat as measured by inflating fiat currencies, which really means that gold is losing value.

That is counterintuitive but correct. Isnt the way they accomplish that is by using the inflated dollars to sell gold short?

[Brian4Liberty]

That is counterintuitive but correct. Isnt the way they accomplish that is by using the inflated dollars to sell gold short?

And sometimes fail to deliver if anyone pushes them. That plus tax laws and other government disincentives against gold.

They probably don't have to be terribly active in controlling the price right now as they have shaped current sentiment enough. But it will take off with a vengenence eventually. Probably after the big boys buy up enough on the cheap.

[devil21]

The paper metals markets are keeping prices of physical as low as possible, despite inflation/devaluation, so eastern powers can buy physical as low as possible. Physical gold and silver does not change value. Only currencies and other paper instruments denominated in those currencies change value.

[Zippyjuan]

The paper metals markets are keeping prices of physical as low as possible, despite inflation/devaluation, so eastern powers can buy physical as low as possible. Physical gold and silver does not change value. Only currencies and other paper instruments denominated in those currencies change value.

So supply and demand do not apply to gold and silver?

[devil21]

So supply and demand do not apply to gold and silver?

In paper metal markets, there is as much supply as one banker can print up and as much demand as another other banker can buy with more paper. That is what constitutes supply and demand relative to spot prices. If you look at the PHYSICAL markets, demand is huge yet the paper spot prices stay range-bound. Obviously, that means there's something else going on. But no, physical metals do not change value. Gold does not devalue. Only currencies change value relative to each other and metals. That economic law was figured out long ago and again in "modern" times when FDR attempted to raise the price of gold. He failed. Instead, he devalued the dollar to change the nominal dollar price of gold.

[Zippyjuan]

In paper metal markets, there is as much supply as one banker can print up and as much demand as another other banker can buy with more paper. That is what constitutes supply and demand relative to spot prices. If you look at the PHYSICAL markets, demand is huge yet the paper spot prices stay range-bound. Obviously, that means there's something else going on. But no, physical metals do not change value. Gold does not devalue. Only currencies change value relative to each other and metals. That economic law was figured out long ago and again in "modern" times when FDR attempted to raise the price of gold. He failed. Instead, he devalued the dollar to change the nominal dollar price of gold.

In the paper markets, a seller must actually have the gold put up for sale. There must actually be that supply. They don't actually have to sell it (the contract purchaser may opt not to take physical delivery and then a new contract is issued against the same gold again but the gold must be available for physical delivery in order for a contract to be made on it).


If the price (value) of silver and gold never change then the ratio of the price of silver to gold must also never change. X ounces of gold should always equal y ounces of silver.

[devil21]

Harvey Organ has already thoroughly explained the trickery behind the paper metals markets so no point in me rehashing it further.

http://www.harveyorganblog.com

If the price (value) of silver and gold never change then the ratio of the price of silver to gold must also never change. X ounces of gold should always equal y ounces of silver.

I didn't say that the paper markets can't temporarily distort the physical markets. They always return to their rightful places eventually though.

[Zippyjuan]

Harvey Organ has already thoroughly explained the trickery behind the paper metals markets so no point in me rehashing it further.

http://www.harveyorganblog.com

I didn't say that the paper markets can't temporarily distort the physical markets.

But no, physical metals do not change value. Gold does not devalue. Only currencies change value relative to each other and metals.

I didn't say that the paper markets can't temporarily distort the physical markets. They always return to their rightful places eventually though.

What is their "rightful place"? The ratio is all over the place.

[devil21]

What is their "rightful place"? The ratio is all over the place.

Their rightful place? As money, while paper returns to its intrinsic value of zero. Btw, price and value are two separate things but you knew that.

[oyarde]

What is their "rightful place"? The ratio is all over the place.

Rightful place is with me of course .

[oyarde]

A tenth ounce US gold coin should cost you about 130.00 , but they really cost closer to 160.00 . That is a real gold coin and not paper shares traded on a market .