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When the drop in silver ends where will the price be. Any thoughts. Most of the junk I have was bought at $19.

A succession of interest rate hikes looming on the horizon should continue to fuel the dollar and place pressure on PMs. We may see $12 silver $900 gold next year.

I really, really thought 12 would be this year if not late last year. But I'm still waiting for 850/12

$4

How much is it costing to get it out of the ground? I think that will make the floor to what the silver spot price will be. All companies will be different I'm sure but if the average price is say $12 an ounce to get it out of the ground then that'll have to be the floor, right?

pennypicker wrote:A succession of interest rate hikes looming on the horizon should continue to fuel the dollar and place pressure on PMs. We may see $12 silver $900 gold next year.

^^^This

nero12345 wrote:How much is it costing to get it out of the ground? I think that will make the floor to what the silver spot price will be. All companies will be different I'm sure but if the average price is say $12 an ounce to get it out of the ground then that'll have to be the floor, right?

You'd think. But a quick research look on the internet shows for:
Freshillo, (HL) Hecla, (RVM) Revett Minerals and US Silver in 2010 avg was from $11.37 to $19.09/T oz
(PAAS) Pan American Silver Corp. 3rd Q 2012 was $26.54/T oz
another reports for 12 top mining companies in 2014 was $24.05/T oz

Not to many of the above seem to be able to do it below $14.50/T oz where we are as I write.

Prices keep going down less efficient (profitable) mines of all types will be closing as prices for mined commodities slump. Can't be in a hurry when dealing with PMs unless you are buying or obtaining at a significant discount.

nero12345 wrote:How much is it costing to get it out of the ground? I think that will make the floor to what the silver spot price will be. All companies will be different I'm sure but if the average price is say $12 an ounce to get it out of the ground then that'll have to be the floor, right?

One of the problems with using the cost to get it out of the ground is that much silver is the byproduct of zinc, lead, copper and gold ("zlcg") production. I think I've read a few places that more than half of all silver produced is a byproduct of "zlcg" production.

For instance, a copper miner might say, "Oh here is some silver we ran across when we mined all these tons of copper." My understanding, and I'm definitely not an accountant, is that this production often gets valued at a cost basis of zero, so whatever they receive for it is a bonus. This money could come from a streaming company. Unfortunately, when cost is zero you can sell something pretty cheaply and the more desperate you become the cheaper you will sell it. If someone is real good at reading financial statements and can find some examples, that would be much appreciated.

Another problem is this (and again I'd like others to chime in as appropriate)- you would much rather cut way back on production than shut down a mine. Shutting down a mine isn't like turning on and off an electric switch in a home or office. My understanding is that a mine which is shut down could face new rounds of permitting and protests from environmentalists before it is allowed to reopen. Since this could take years, a miner is more likely to cut way back on production to show some level of activity, even if it is at a modest loss. That way the mine is allowed to stay open.

One thing that would be interesting is if base metals (especially zinc, lead and copper) get to the point where their production isn't profitable. If those mines shut down, then that could result in a sizable reduction to the amount of silver produced over time.

I sure am glad I'm not the person who decides if mines all around the world stay open or not...

It's possible for the price of anything to go to zero, if people change their perception of value in something. Even if something remains valued, it is possible for it to drop significantly below production cost in the short term.

That said, the point of any exercise of estimating the cost of production (which is multi-faceted, as it includes by-product mines as well as primary production, and recycle, and therefore there is no "one" production price, but an average price, or a series of averages for several categories) includes assessing whether or not a given price is sustainable in the long term. If mine production can't be sustained at a given price, then eventually supply will drop, or the price must move higher. By-product mines do not assign silver a cost basis of zero; they count on the sale of silver (and gold) to finance their overall production of copper, zinc, and lead production and include that in their financial evaluations. So there is a symbiotic effect, and the depression in the price of silver adds further pressure to the by-product mines, in addition to the overall drop in commodity prices.

Provided demand remains intact (and demand for silver is high and growing, both for industrial use as well as coin), a commodity price that is below the cost of production of a large portion of mines means that the price will eventually rise. But it doesn't say how long that will take.

For the mines I mention above that are silver as a byproduct producers the numbers above are supposed to take that into account.
But, back to the original question.

Right where it is now give or take a buck or two. Otherwise, under $10. My best guess.

Which price are we talking about, the paper price or the price of an actual ounce of silver?

Like Camaro68 said, the price (especially paper) can go to zero. Metals have already taken their licking the last few years, but equities have not corrected yet even though they tried to recently. While I expect an eventual stock market correction if not outright implosion at some point in the future due to massively leveraged derivatives and a lot of cooked books, with paper metals likely to experience additional downside if and when that occurs, I don't see nearly as much downside overall in metals since they already took their licks. I think we might see $11 or $12 paper silver at some point, but anything lower than that would probably be a brief dip spike.

The reason I don't see it getting any lower than that is because of the physical market. We saw supply chain constraints last time the price got to where it is back to now. We'll likely see that again in if it gets into the $13s, and anything lower than that ought to only put things further on backorder. I don't think the elite would want this, because it could compound the issue if that sparks more buying interest from those who wouldn't have otherwise paid attention.

I doubt we'll ever be able to buy a BU silver eagle for $15 out of pocket, ever. It could happen, but I doubt it.

I'm actually looking forward to a possible interest rate hike due to Gibson's Paradox: positive interest rates are positively correlated to the price of goods. All the free money being printed and stuffed into bank coffers is actually decreasing the velocity of money because it isn't doing anything. All the artificial inflation we've had has created a deflationary kickback. ZIRP and QE is the reason why the global economy is stalling. The reason they were good for prices before is because people had inflationary expectations: speculation of future price inflation due to monetary inflation which has not happened due to the lack of velocity - but the potential velocity still looms. By raising rates a nominal amount it should stabilize things a bit and sate the deflationary kickback which is only seeking equilibrium. They'd have to pull a Volcker for it to be bad for metals in my mind, and that would be suicide with current debt levels.

InfleXion wrote:I doubt we'll ever be able to buy a BU silver eagle for $15 out of pocket, ever. It could happen, but I doubt it.

This is getting real close @ $15.33 as I post: https://www.firstfidelityreserve.com/st ... lowout.php

Thanx to Shinno!

Looks like a telemarketer - actual is 2.55 over if you dont "join". Best read that fine print carefully.

Also miners have stashes of zones. When the profits are good most go after the hard to get. They only go after the easy stuff when they get in a bind and when it really gets bad they put the mine into maintenance mode.

With interest rate hike coming, an election year on the horizon, Congress unable to control spending, shadiness on Wall St, etc. I would not be shocked if we get the chance to buy $10 silver and $800 gold in 2016 and 2017. Just my hunch and why I've waited several months to start buying again. I think the next 16 months are crucial to not just commodity prices, but the American economy and our country.

agmoose wrote:With interest rate hike coming, an election year on the horizon, Congress unable to control spending, shadiness on Wall St, etc. I would not be shocked if we get the chance to buy $10 silver and $800 gold in 2016 and 2017. Just my hunch and why I've waited several months to start buying again. I think the next 16 months are crucial to not just commodity prices, but the American economy and our country.

What a incredible gift that would be.

Mr Paradise wrote:$4

That's when I started collecting so it would go full circle for me. I'm going to watch on the sidelines and watch this negative streak for a little while longer before making those bigger purchasing just so I can follow the movements after we break this street to evaluate. this hammering could continue straight through Q4 and early 2016.

It'l we interesting what Impact out not China has on the PM market when they set their own price in 7 weeks.

Only clouds it up even more

Now through March 2016 will be a very interesting sequence of pricing events as we progressively go down to $800-$900 gold By then . IMO of course.

The harder they fall... the bigger they are (eventually)

All the schemes and machinations of TPTB are only accelerating the advent of the end-game for the metals. Suppressing the price only enhances
the allure in the eyes of most who have the discretionary income to stack and will bring on resource depletion that much sooner. While I hope we have another
five years of prices at this level, I won't gripe if we have TRUE price discovery enter the picture sooner than that.

Now is the time to continue to dollar cost average into the metals. No one can call a bottom, and when we reach one, no one can predict how much
retail stock will be available for purchase, nor at what premium. The point will be reached, someday, when those who pronounce that premiums always
revert to the mean, and waiting to buy is more sage than chasing product to have in hand, will be proven wrong. When all the black swans/dominoes fall
that need to, in order to bring us to that future point occur... silver and gold will go no bid.

beauanderos wrote:The harder they fall... the bigger they are (eventually)

All the schemes and machinations of TPTB are only accelerating the advent of the end-game for the metals. Suppressing the price only enhances
the allure in the eyes of most who have the discretionary income to stack and will bring on resource depletion that much sooner. While I hope we have another
five years of prices at this level, I won't gripe if we have TRUE price discovery enter the picture sooner than that.

Now is the time to continue to dollar cost average into the metals. No one can call a bottom, and when we reach one, no one can predict how much
retail stock will be available for purchase, nor at what premium. The point will be reached, someday, when those who pronounce that premiums always
revert to the mean, and waiting to buy is more sage than chasing product to have in hand, will be proven wrong. When all the black swans/dominoes fall
that need to, in order to bring us to that future point occur... silver and gold will go no bid.

Even though people here will be vindicated and proven correct someday, this is not something I look forward to. Water, ammo and cans of beans will also go "no bid".

Some scary sh*t is on the way. It's going to be very hard on everyone, even if you are well prepped.

Cu Penny Hoarder wrote:

beauanderos wrote:The harder they fall... the bigger they are (eventually)

All the schemes and machinations of TPTB are only accelerating the advent of the end-game for the metals. Suppressing the price only enhances
the allure in the eyes of most who have the discretionary income to stack and will bring on resource depletion that much sooner. While I hope we have another
five years of prices at this level, I won't gripe if we have TRUE price discovery enter the picture sooner than that.

Now is the time to continue to dollar cost average into the metals. No one can call a bottom, and when we reach one, no one can predict how much
retail stock will be available for purchase, nor at what premium. The point will be reached, someday, when those who pronounce that premiums always
revert to the mean, and waiting to buy is more sage than chasing product to have in hand, will be proven wrong. When all the black swans/dominoes fall
that need to, in order to bring us to that future point occur... silver and gold will go no bid.

Even though people here will be vindicated and proven correct someday, this is not something I look forward to. Water, ammo and cans of beans will also go "no bid".

Some scary sh*t is on the way. It's going to be very hard on everyone, even if you are well prepped.

or we can just experience what Paris is going through.

johnbrickner wrote:

InfleXion wrote:I doubt we'll ever be able to buy a BU silver eagle for $15 out of pocket, ever. It could happen, but I doubt it.

This is getting real close @ $15.33 as I post: https://www.firstfidelityreserve.com/st ... lowout.php

Thanx to Shinno!

I must of gotten super lucky. Took advantage a risk on first fidelity's offer and got 5 ASEs at the purchase price of . . . $15.28. So far no follow up telemarketing, no joining for a membership, no fine print "gotcha". But, I got a ton of marketing literature in the box with the product. Next to the occasional at "spot" ones I got about a decade or more ago, none with less premium.

Thanx again Shinno!