There are a number of reasons that silver should revert to the long term historical mean but the two primary ones are the fact that geologically in the earth’s crust there are fifteen parts of silver to every one part of gold. The other reason is that silver is used in many industrial, technological and medical devices and applications today and since the Industrial Revolution a huge amount of silver has been used up. Silver is like oil in that respect, and unlike gold, a lot of silver has been consumed and is gone forever.
Today’s AM fix was USD 1,226.50, EUR 902.50 and GBP 747.37 per ounce.
Yesterday’s AM fix was USD 1,237.50, EUR 907.92 and GBP 754.44 per ounce.
Gold fell $6.50 or 0.52% Yesterday, closing at $1,232.30/oz. Silver slipped $0.30 or 1.49% closing at $19.87/oz. Platinum dropped $3.01, or 0.2%, to $1,409.74/oz and palladium rose $3 or 0.4%, to $738.25/oz.
Gold edged down in London for the second day ahead of the release of the U.S. Federal Open Market Committee minutes. Strong support is at $1,180/oz which could turn into a double bottom and resistance is at $1,250/oz and $1,270/oz.
FXStreet.com’s Dale Pinkert interviewed Research Director, Mark O’Byrne on Monday about the current state of the gold and silver markets, the history of paper currencies, a global currency reset, the amero currency, the gold silver ratio and silver rising to $150/oz in the coming years.
Another topic looked at was bail-ins by banks of individual creditors becoming one of the most under appreciated risks of our time and noting Poland’s recent government confiscation of pensions.
They discuss how the gold silver ratio throughout history has been 15:1. Today it is at over 60:1 (see chart) and GoldCore believe it will revert to the mean.
There are a number of reasons that silver should revert to the long term historical mean but the two primary ones are the fact that geologically in the earth’s crust there are fifteen parts of silver to every one part of gold.
The other reason is that silver is used in many industrial, technological, medical applications today and since the Industrial Revolution a huge amount of silver has been used up.
It is for this reason that we are more bullish on silver than on gold in terms of price. We continue to believe that silver will surpass its inflation adjusted high of $150/oz in the coming years.
It was noted how international storage of coins and bars is becoming a popular diversification for U.S. citizens in Zurich, Singapore and Hong Kong.
Dale asked some good questions and had a great expression that we had not heard before “Don’t wait to buy gold and silver. Buy gold and silver and wait.”