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Ryan Jordan has been blogging about the precious metals since 2010. However, his interest in the precious metals markets spans nearly 20 years as both a coin collector and private trader. Ryan believes there is a lack of serious discussion of how undervalued precious metals like silver are, and... More
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  • Regardless Of Stocks' Direction, Don’T Forget Gold And Silver

    With global equity markets finally showing that they can go down as well as up, it is worth asking what this negative movement in the equity markets has to do with the future of gold and silver prices. I think the idea that the stock market is going to collapse while the precious metals recover all of their losses since 2011 is more than a bit premature. In fact, going back to 2009, I really felt that most investors should be at least agnostic on the future of the conventional stock markets, with central bankers trying to levitate financial asset values for all of the reasons made clear to us with policies like quantitative easing. But, at the same time, by trying to ensure that no one loses money in the conventional markets, I suspect that will also take away any explosive returns from these investments. I'm thinking here of what happened nearly 80 years ago once bank deposits were insured- their real rate of return declined.

    Of course, since I haven't actually seen central bankers come out and tell people that stock investments are risk-free, I'm not so convinced that central bankers are not willing to at least start the process whereby some of the exuberance is taken out of the broader stock indices. Might gold and silver catch a bid if people realize that the central bank put under stocks that don't exist?

    On the other hand- and looking out longer term- whether or not central bankers are able to control the direction of the markets, it certainly seems as though they are hell-bent on creating inflation- something that we have had very little of recently. Are gold and silver prices reflecting this long term desire for inflation? I don't think so.

    Jan 28 11:10 AM | Link | Comment!
  • Future Catalysts For Higher Silver Prices

    This morning, with silver once again holding above the June lows- but with price still 60% of its peak- future catalysts for the price of silver may seem hard to find. Commodity prices are also sharply lower from their 2011 highs, and sentiment for the metals is negative. Most hot money players in the silver market would rather play things from the short side, while searching out any other asset besides the precious metal to ride to new all time highs. It is at times like these that investors have to look at the larger picture and understand that to be successful as an investor, you need to buy the lows (amid the fear) and sell the highs (amid the euphoria.)

    Positive news for silver still exists. More data out of India, for example, confirms the idea that silver imports into that country will likely reach all-time highs this year, due to import restrictions on gold. Understand that it literally only takes a fraction of gold demand to be diverted into silver (since the market is nearly 1/100 the size of the gold market) for the price of silver to skyrocket. Then we have more news from another North American mint- this time Canada- showing once again an impressive increase in sales of one ounce silver Maple Leaf coins over last year's numbers. In conjunction with the record setting sales seen by the American mint last month, it looks as though someone understands the need to buy the dip in silver.

    But there are other signs that may point to higher silver prices next year. For one, the price of oil- notwithstanding all of the pom-pom waving over shale oil- is quickly marching back towards 100 dollars a barrel. We are closing in on record territory for oil on an annual average basis, by the way- something almost no one whom I read has mentioned. What is good for oil will be good for all commodity futures (even as I remind people repeatedly that silver and gold are more than mere commodities.)

    And, finally, near record levels of bulls in the conventional US stock market should be read as a contrarian indicator- meaning that when too many people are on one side of the trade (in this case believing prices are going higher) that the exact opposite move is more likely in the offing. If we finally get some people moving money out of equities and back into the much beaten down and beleaguered precious metals markets, it may further set off a strong short squeeze among all the commodity futures players who have had an easy ride this year shorting metals and going long the DOW.

    Time will tell, but I don't believe that negative real rates for savers, quantitative easing, concerns about the status of the US Dollar reserve system, bank bail ins, or any of a number of other bullish fundamentals for higher silver prices have changed. The only thing that has changed is the price.

    And Santa is giving you a great holiday discount as we speak.

    To view my blog please visit

    Dec 06 12:51 PM | Link | Comment!
  • Examining Silver And Deflation

    Silver and other precious metals just can't seem to get a break. There are several reasons one can think of for their lackluster performance on days like today: 1) the supposed FED taper 2) a skyrocketing stock market seemingly indicating all is well with the world, and 3) a sense that the US dollar represents the "cleanest dirty shirt," as they say. When you add to this that commodity futures across the board are lower on the year, you get a sense that some sort of strong disinflation or deflation is in the cards. Now, if falling prices were occurring with a genuinely strong real economy, I might be inclined to agree that gold and silver are in deep trouble. However, when I look at the economic data globally, I actually see a re-emerging deflationary threat, one that could damage bank balance sheets and- if not handled properly- bring about a return of the headaches of the 2007-2009 period.

    During those years, as you should know, gold and silver remained among the best-performing asset classes. I might add that gold and silver also managed to hold much of their gains into 2009, even as the broader commodity complex (following oil's lead) got absolutely crushed. This happened because gold and silver are recognized at least by some as money- and not merely as commodities. This distinction is an important one- and is part of the reason why foreign central banks continue to accumulate gold, by the way, even if that buying has slowed down this year.

    If we think historically, even many mainstream economists understand gold and silver primarily as deflation hedges. Although the example of the 1970s is the most recent example of gold and silver as inflation hedges, throughout history, whenever a depression appeared, premiums for gold and silver coins increased above their fixed monetary value. This history is often forgotten by some, especially those who focus only on the fact that the precious metals trade as commodity futures, or financial assets, even as other market participants view gold and silver as real assets.

    As my coin dealer once told me, "there is always money for gold and silver." This is all the more true of silver (along with platinum and palladium) where above ground stocks could be easily purchased by a couple of billionaires. The only question is what the catalyst will be to send prices higher.

    The release of the Fed's minutes- and more importantly, the way that the market obsesses over these minutes- speaks to the importance of the FED in getting things right with a monetary policy that is the sole driver of this stock market led "recovery" - that really is not a recovery at all for most people. Even Ben Bernanke understands the role of FED credibility in maintaining strong asset values. But as we all learned in 2008, the FED is very much a human institution, often finding itself responding to crises that it never saw coming. In other words, you should be careful leaving the future of your savings entirely in the hands of experts who are no better able than you or I at times to manage the complexities of the global economy.

    The deflationary threats still remain. Ask yourself, can the average consumer handle rising interest rates? Can bank balance sheets handle a further drop in housing values? On the other hand, will the FED be able to taper if it senses that the animal spirits on Wall Street are getting out of hand? At what point will the credibility of the FED, or other central banks, be questioned if there is a widespread acceptance of the idea of a liquidity trap? Isn't a rising stock market without a strong real economy precisely the kind of situation we think about when we remember crashes like 1929? You get my point- it seems to me that a lot of people are making light of real challenges out there in the real economy.

    Yes, broader commodities may continue their trend lower- and so might silver and gold for the next several months or a year. But always remember what sets the precious metals apart.

    And also remember how few people- especially now- really own them.

    Learn more about Ryan Jordan at

    Nov 21 11:39 AM | Link | Comment!
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