Copper vs. Silver vs. Gold

[rexmerdinus]

I posted this in the silver/gold forum too:

There's been a lot of talk about the traditional ratio between the prices of silver and gold, and whether it will ever return to something close those levels. Has anyone addressed the same issue but instead in terms of copper and silver? To state it a different way, let's go back in time, say to 1920--a circulating silver dollar (with 0.7735 troy ounces of silver) is worth a dollar, and a penny is worth .01 times that dollar in terms of commerce. Fast-forward to today, when silver is worth about $30 per ounce, making that silver dollar's metal content worth about $23.20 of today's dollar. Following the ratio of yesteryear, that would make a single 95% Cu penny worth about 23 cents.

Obviously I'm not taking metal supply and demand into account here, but we are certainly relegating some of our copper supply to landfills in one form or another, just like with silver. I'm interested in hearing everyone's thoughts (particularly those who understand the markets better than I do!), on whether we are likely ever to see price levels between copper and silver come back to anything close to these levels. Or the levels associated with 90% silver coinage (.7234 ounces per face dollar, or about $21.70 in today's dollars)?
Thanks!

[Market Harmony]

I have done a study on it. Bottom line is that in today's values against 1920's data, copper is fairly valued, while silver is undervalued, and gold overvalued.

Based on today's spot prices:
Gold - 1.49x
Copper - 1.01x
Silver - .50

Take current price for each metal and divide by their respective numbers and you will get what would be the equilibrium values in 1920's terms... so $29.29 silver divided by .50 = $58.58 (what price of silver should be)

Gold should be $1386 divided by 1.49 = $930
Copper should be $3.10 divided by 1.01 = $3.07

So, if gold was $930 today, silver $58.58 today, and copper $3.07 today, then this would represent the same ratio as it was in the 20's...

I hope that helps

[misteroman]

lookslike silver has the most room to grow!!!!

[Rodebaugh]

I have done a study on it. Bottom line is that in today's values against 1920's data, copper is fairly valued, while silver is undervalued, and gold overvalued.

Based on today's spot prices:
Gold - 1.49x
Copper - 1.01x
Silver - .50

Take current price for each metal and divide by their respective numbers and you will get what would be the equilibrium values in 1920's terms... so $29.29 silver divided by .50 = $58.58 (what price of silver should be)

Gold should be $1386 divided by 1.49 = $930
Copper should be $3.10 divided by 1.01 = $3.07

So, if gold was $930 today, silver $58.58 today, and copper $3.07 today, then this would represent the same ratio as it was in the 20's...

I hope that helps

I like it BUT......there always seems to be a but in the crowd.

One must take into account reserves above and below ground, extraction tech, consumer demand, industrial consumption, reclamation of scrap, costs of refining, economic strength or weakness, and a bunch of other variables that have changed over the past 90 years.

AKA....D11 dozers working an open pit mine the size of which can be viewed from space today is a far cry from the "mule and hand labor" used to recover minerals in the 20's......therefore values this old are quaint but not relevant enough alone to construct current market derivative price points.


(wow did I just lecture MH about the cost of refining and production?) yep, I played that butt.

[Market Harmony]

I like it BUT......there always seems to be a but in the crowd.

One must take into account reserves above and below ground, extraction tech, consumer demand, industrial consumption, reclamation of scrap, costs of refining, economic strength or weakness, and a bunch of other variables that have changed over the past 90 years.

AKA....D11 dozers working an open pit mine the size of which can be viewed from space today is a far cry from the "mule and hand labor" used to recover minerals in the 20's......therefore values this old are quaint but not relevant enough alone to construct current market derivative price points.


(wow did I just lecture MH about the cost of refining and production?) yep, I played that butt.

Hey Rodebutt

I agree 100% with what you have written before you even wrote it... that is why I framed the entire post in a "today vs 20's price structure"

There are a multitude of variables which affect the supply and demand economics of these 3 commodities, and not all of these variables act upon, or are evenly distributed among, these commodities. So, prices are not expected to remain in lockstep ratios to one another. But in a sense of comparing 20's ratios to today, then my initial post is "spot" on