Precious Metals

Comments

• DrVenture

  January 13

  @rono
  
  Appreciate the timely update. Been wondering about all of it.
• Old_Joe

  January 13

  Thanks @rono. Appreciate the info.
  OJ
• hank

  January 15 edited January 15

  Not into the metals. Just don't hang on to anything that's already appreciated so much. I did a lot of trading in physical silver bars in the late 70s. One day a pair of jerks who were parked in the coin dealer's lot surveying the clientele trailed me home. Enough said. Mostly cured me of physical stuff. To this day I don't like be out in public wearing a watch worth over $100.
  
  Got bored during the winter of 2017 and assembled a collection of about a dozen Morgan Silver Dollars. ISTM silver was trading around $15 back then. Used reputable online sellers. All except 2 are securely encased with an ID number from PCGS or NCG the top grading agencies. Most have been "imaged" so potential buyers can access the site, enter the coin's ID and pull up photos. Coins are not bullion. Big difference. But my experience from the 70s is that they tend to run together.
  
  Few months ago found a tarnished 1-ounce silver bullion coin in a junk drawer. No idea where it came from. With silver over $70 I walked into a small local coin shop. A young fella ahead of me cashed in a newish looking stack of silver bullion coins. Took quite a while. He received a bit over $1600 cash. Then I offered up my sole coin to the proprietor who offered $60 - far below spot. I accepted. He copied down my DL# on a form I was required to sign "to confirm this for my boss". I dunno. It didn't appear to be for tax reporting. Took a photo for my records.
  
  Yesterday with silver north of $90 I returned. While not professionally graded / certified like the rest of my collection (which are kept in a bank vault), the two Morgans I had with me are gorgeous and would grade MS 60 or better. Fair value around $120 - $130 each. (A Morgan Dollar contains a bit over .77 troy ounce silver.) He declined to make an offer, but instead asked for my "bottom line". I said $200 for the pair. He quickly handed them back without even taking a close look. I mentioned each contained more than $70 worth of bullion. His reply - "Yes, it's so expensive no one is buying it."
  
  Why the run up? All the reasons @rono and others have cited have validity. I'd say at this point the main driver is the prospect of civil instability across the U.S.as the election nears. I hope that doesn't happen, but many probably view the metals as "last resort" survival money. I expect a hard correction someday. But that could be months or years away. I limit my gambling to $1 wagers on DraftKings!
  
  
• hank

  January 15 edited January 15

  d
  
• rono

  January 15

  Howdy Hank,
  
  You kids have any snow up there?
  
  Civil instability is one of many reasons for increased demand. Geez, it's the perfect storm for a bull market in silver.
  
  Industrial demand is huge. Silver is the best conductor and reflector and a great antibiotic. Solar paste goes into every solar panel. It's in all EVs and AI electronics. Also used in photography and medicine. None of these users gives a rats ass about price. No silver - no production.
  
  You have enormous debasement and de-dollaring trade. Ever since Russia invaded Ukraine and we seized their dollar denominated assets, every other sovereign country has been diversifying out of the dollar. Buying gold, silver, Euros, crypto, etc. in order to reduce their outsized holdings of dollars. As to debasement, there are many folks no trusting fiat currencies in light of the huge deficits, continued spending, low interest rates and the restart of quantitative easing.
  
  Now we can chat about the civil unrest/survivalist demand. Yeppers. Hell, I started going to the mattresses when that Cheeto POS go reelected. Now I'm trying to reduce my holdings in and of the dollar. Foreign hedged bond funds, what. A pot-full invested in the miners (silver, gold, and now, copper).
  
  All this demand faces a restricted supply. Artificially low prices over the past several decades have discouraged exploration and expansion of silver mining. Seventy percent of all silver comes a a byproduct of lead, zinc and copper. A new mine is 7-10 years out. And unlike gold, silver gets used up in industry. Gold never goes away. Silver does.
  
  So, you've got a supply/demand issue that central banks cannot resolve. They can print more fiat currency but not silver.
  
  The GSR is now 49 to 1 and 50 is a huge threshold. Silver is about to go thru $100 an ounce. A silver 1964 is now worth $17 in bullion.
  
  BTW, in the past year, silver is up 208% and YTD it's +30.75%.
  
  and so it goes,
  
  peace,
  
  rono
• hank

  January 15

  Great summary @rono. You've done incredibly well in the metals over many years. Snow up north? More than we care to talk about!
• bee

  January 15 edited January 15

  @hank, @rono:
  
  You inspired me to rummage through a few junk drawers today.
  I rolled $57 in coins...hope the bank still takes them!
  I separated out my pre-1982 pennies... heard they have doubled in value just seating there...hope to net 50 cents and the 25 coins... again if I can find someone who will part with 50 post-1982 pennies... aren't all pennies on the chopping block?
  
  Feeling Lucky today, thanks!
• hank

  January 15 edited January 15

  @bee - Never disrespect the penny. Franklin's famous proverb probably appeared in his 1732 Poor Richard's Almanac. If allowed to compound annually at 5% interest over the 294 years since then, his penny would be worth nearly $17,000 today.
  
  Calculator
  
  
• bee

  January 16 edited January 17

  @hank:
  I always thought of the following advice as a great way to think about saving in the short term (do as much as you can to save your pennies) and investing over the long term (if you leave the invested pennies alone they become dollars):
  
  "Watch your pennies and your dollars take care of themselves"
• Old_Joe

  January 16

  Some six weeks ago @rono woke me up to the special situation in silver. As most of you know, we, being in our 80s, have all of our serious money in Treasuries, CDs, and US govt MMKT funds. This may (or actually, given our current government, may not) be very safe, but it sure as hell is very dull.
  
  So I said to myself, "what the hell, let's play with silver a little."
  
  In six weeks I've spent $7177 on SLVR & SILJ, and it's now "worth" $9318.
  
  I like this thing!  
• Observant1

  January 17 edited January 17

  "In six weeks I've spent $7177 on SLVR & SILJ, and it's now "worth" $9318."
  
  A 29.83% gain in six weeks—not too bad!
• Sven

  January 17

  Great job, @Old_Joe! I too earned a few dollars too on gold, silver and their mining stocks. Any thought on uranium due to energy demand from data centers?
• Old_Joe

  January 17 edited January 17

  "A 29.83% gain in six weeks—not too bad!"
  
  Thanks, @Observant1, but all the credit goes to @rono. I did have the guts to increase my original couple of thousand original stake on a couple of pretty good dips, but other than that rono is The Man.
  
  @Sven- Thanks for the compliment, but as I just said, it's all rono's doing. I know less than nothing about the uranium situation, but as I'm sure that you also know from general news reporting there is consideration of re-starting one or two decommissioned generating reactors, and in a few years hopefully there will be a few new simplified design reactors coming on line. If there's money to be made on the uranium fuel side I would be very surprised if major insider long-term money has not already been active on that. Very good question, I think.
• rono

  January 17

  Howdy folks,
  
  Thanks for the kind words, Dan.
  
  I bought Sprott Physical Uranium SRUUF back when Trump was elected after he dissed solar and wind. Feh, what's left?
  
  Pulled back a little on Friday, but still up 27% YTD and 199% for the past year. With the paper price at $90.88 the issue is that in Asia, real silver is going at over $100. That, my friends, is the divergence. Gary always said, that's where you find the action - at the divergence.
  
  What I plan to continue to do at this point is shift what little paper silver I own into silver mining stocks. If they could pay the bills at $20/oz, think what their profit looks like at $90.
  
  Physical bullion is first, mining stocks second, paper bullion a distant third and be nimble my friends with paper bullion. They can issue more contracts and print more money but they can't print silver.
  
  and so it goes,
  
  peace,
  
  rono
  
  
• Old_Joe

  January 17

  @Sven- Well, there's rono's take on uranium. He's our "metals" man on MFO.
• Observant1

  January 17

  “Last year’s blistering rally for silver has gone into overdrive, with prices breaching
  $90 an ounce this week and, despite a pullback on Friday, still up by around one-quarter this year.
  The metal has now tripled in value over the past 12 months amid wild price swings.
  Dealers say stocks of silver coins are selling out in record time,
  while precious metal traders warn of a global shortage.”
  
  https://archive.ph/eWPmS
• Old_Joe

  January 17

  From the above: "Nobody sees this as a rally drive by the fundamentals,” said one market participant in London. “It’s more of a retail investor bandwagon.”
  
  I dunno... that sure isn't @rono 's take:

  Industrial demand is huge. Silver is the best conductor and reflector and a great antibiotic. Solar paste goes into every solar panel. It's in all EVs and AI electronics. Also used in photography and medicine. None of these users gives a rats ass about price. No silver - no production.
  
  All this demand faces a restricted supply. Artificially low prices over the past several decades have discouraged exploration and expansion of silver mining. Seventy percent of all silver comes a a byproduct of lead, zinc and copper. A new mine is 7-10 years out. And unlike gold, silver gets used up in industry. Gold never goes away. Silver does.
  
• Observant1

  January 17 edited January 18

  The article suggests that speculation by retail investors coupled with a supply deficit
  has led to the strong rally in silver.
  
  "The eye-popping gains — eclipsing even gold’s historic rally — have come as a surge of speculation
  by retail investors has collided with a five-year shortfall in silver supply.
  At the same time unusually high silver stockpiles in the US and China have drained supplies of bullion
  from vaults in London, where global prices are set.
  'It is the perfect storm,' says Philip Diehl, former director of the US Mint.
  'We have been in a long-term supply deficit, and it is just getting worse.'”
• Sven

  January 18

  Thanks @rono and @Old_Joe, I gonna need a bigger truck.
• sma3

  January 18

  Uranium has been rising for over two years with all the hype about nuclear power.
  
  A Sprott ETF is certainly one idea but less risky might be a general energy and natural resources fund like GRHAX which has chunks of Uranium silver Gold and Energy
  
  As I have mentioned before SII Sprott Common Stock is also up dramatically but does not depend on one of these markets as they have ETFs in all of them
  
  NLR a "nuclear" ETF has Uranium but also power producers and even some utilities
  
  Probably less of a volatile ride until Trump pulls the plug
• Sven

  January 18

  Thanks everyone for the great suggestions.
• Crash

  January 18

  Great tips! i'm going to investigate the OEF.
• DrVenture

  2:38PM edited 2:38PM

  I waited for a breather. None came.
  
  I tend to fear retail speculation. True demand and retail speculation are not mutually exclusive.