Precious Metals: $1660 Au, $31.50 Ag = CHEAP

[Market Harmony]

It is my opinion that $1660 Gold and $31.50 Silver are cheap cheap cheap! They are not living up to their namesake of "precious" But, that is about to change.

I don't think these prices will last long. If ever there were a time to load up with a 4-6 month time horizon, then I believe that time is now. The 2013 Silver Eagles are selling quickly. When the dealers need to replenish stocks, there will be another large purchase of silver in the market. That will make 3 large purchases that will severely deplete the 207 million tons that Nadler report as overhanging supply that has been affecting (suppressing) the market.

I'll be buying some gold today. I've already bought silver at this price.

Study this chart, live (and prosper) by it:

[misteroman]

Couldnt agree more. Ive been buying hand over fist and just cant imagine how it wont be $45+ by years end

[TXBullion]

[Thogey]

:shock:

Jack you are a bad BAD man!

[TXBullion]

:shock:

Jack you are a bad BAD man!

I was just checking through some old posts and just wanted to bump it. I didnt mean anything mean by it but checked the date and almost 6 months since

[shinnosuke]

Today is the first time for me to see this thread, too. If I had read it on Jan. 25th, I would have agreed with MH's sentiments. Since then I have come to the firm conclusion that I am unable to predict anything. Or, like Treetop wrote: I don't know what I'm doing. All I know is that silver is shiny and heavy and Federal Reserve Notes are paper promises from liars.

[theo]

Today is the first time for me to see this thread, too. If I had read it on Jan. 25th, I would have agreed with MH's sentiments. Since then I have come to the firm conclusion that I am unable to predict anything. Or, like Treetop wrote: I don't know what I'm doing. All I know is that silver is shiny and heavy and Federal Reserve Notes are paper promises from liars.

I did read this in January and I wholeheartedly agreed with the sentiment. I didn't think silver get would below $30 much less $25 or $20.

As I consider my meager stash I realize that; One, My percentage of .999 Ag is way too small and two, my collection of AU is truly pathetic. Today's lower prices affords me the opportunity to address both issues.

[Market Harmony]

I can be wrong. I am not afraid of it. Being wrong sometimes can be a blessing. If I did not believe that was correct when I wrote it, then I would be a liar. I have had to fight out of a losing position on metals for months now. Reading the OP, I am reminded of the market mood even then. Those prices did seem to be cheap, and I think today's prices are cheap. But being wrong in the past helps me to govern the risk I take today. That is called experience. And tuition at college cannot pay for that. Sometimes the hard knocks of life turn out to be better than the education you can buy.

If you are not making mistakes, then you are not doing anything at all.

[68Camaro]

cheap is relative. I agreed with MH in Jan, didn't expect the drop, but it's not a normal market either. So it's "more cheap" now. Five years from now both prices will look cheap. If you waited to enter the market until now then you went ahead of me in terms of bang for the buck, but I'll take the security of having it in hand over the risk of waiting for the bottom.

[TXBullion]

I can be wrong. I am not afraid of it. Being wrong sometimes can be a blessing. If I did not believe that was correct when I wrote it, then I would be a liar. I have had to fight out of a losing position on metals for months now. Reading the OP, I am reminded of the market mood even then. Those prices did seem to be cheap, and I think today's prices are cheap. But being wrong in the past helps me to govern the risk I take today. That is called experience. And tuition at college cannot pay for that. Sometimes the hard knocks of life turn out to be better than the education you can buy.

If you are not making mistakes, then you are not doing anything at all.

Well said

[misteroman]

Remember you dont lose money if you dont sell.It will hit thosr numbers again soon enough.

[Mr Paradise]

My guess is metals go even lower from here.

[theo]

My guess is metals go even lower from here.

Emotionally I want to disagree with this statement, but the fact that both PMs failed to breach their respective resistance points is not great news. The market for silver has chosen to accept the 18 - 20 price range for the time being, despite the fact that it is apparently below the cost to mine for most companies. However, the bullion bank seem to have gotten out short positions and are, therefore, no longer in a position to benefit from lower PM prices.

I would expect gold and silver to both challenge, but not breach, their earlier lows; and be range bound until some large event either sends them lower (like a market crash) or higher (like a U.S. credit downgrade).

[Rosco]

I fear the Credit down grade thats my reason for being. A small stack is still fun to fondle

[Verbane]

My guess is metals go even lower from here.

My guess is that there are only two ways for it to go, so you've got a 50% chance of being right

cheap is relative. I agreed with MH in Jan, didn't expect the drop, but it's not a normal market either. So it's "more cheap" now. Five years from now both prices will look cheap. If you waited to enter the market until now then you went ahead of me in terms of bang for the buck, but I'll take the security of having it in hand over the risk of waiting for the bottom.

Well said.

[JobIII]

Nice post, Geek!

[InfleXion]

I still agree with this post. $1660 gold and $31.50 silver are cheap to me. They're just cheaper now Since I approximate fair value gold at $10,000+ and fair value silver at $1,000+ I will be hard pressed to think any price is not cheap. Of course markets can stay irrational longer than I can stay solvent, but that doesn't mean that they must.

I do consider this to be the bottom for the following reasons
- Consolidation has occurred at the current price level
- As occurred at the bottom in 2008, the monthly chart of silver is now bouncing off the lower bollinger band
- Current prices very close to all-in cost of production
- Strong support at this level from 2008
- JP Morgan is now long instead of short