Silver dips below $14.00

TheCoinKid

TheCoinKid

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Apr 16, 2013
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Just noticed that silver briefly dipped below the $14.00 line earlier today. Been quite some time since I've seen prices in the $13s, although, as I'm writing this, spot sits at $14.01.

Buying opportunity?, or my classic buying mistake of "trying to catch a falling knife'?

Noticed APMEX currently has an EBAY special, selling 2015 BU silver eagle rolls for $339, or $16.95 per coin. Also the lowest I've seen in awhile.

Any thoughts?

TCK
 

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We are in an up and down faze in the metals and I'm buying every dip that comes along. Just bought some 1/10 gold EA's $118 each from a guy on BulionStackers. Great time to be buying if you have the funds. Keep Stacking

 

TheCoinKid said:
Just noticed that silver briefly dipped below the $14.00 line earlier today. Been quite some time since I've seen prices in the $13s, although, as I'm writing this, spot sits at $14.01.

Buying opportunity?, or my classic buying mistake of "trying to catch a falling knife'?

Noticed APMEX currently has an EBAY special, selling 2015 BU silver eagle rolls for $339, or $16.95 per coin. Also the lowest I've seen in awhile.

Any thoughts?

TCK
Click to expand...

As far as $$$ needed per unit, yes, quite low compared to the past few years. However, premiums asked are relatively unchanged so as spot falls we see that we are being asked to pay more and more premiums. $3 when spot was $30=10%, $3 now is over 20%...premiums should fall as price declines....if we hang out in this range for another 6-8 months we might see that.
 

Good observation SilverHoarder.

I do think, however, that there is a fixed component to premiums that will always be there no matter how low silver prices go, ie, if silver were to go back to the $4 level like we experienced in the early 2000s, I don't think we would see silver eagles going for, say, $4.40 each (a 10% premium).

In general, as silver prices decrease, premiums, as a percent of the spot price, will tend to increase.

TCK
 

TheCoinKid said:
Just noticed that silver briefly dipped below the $14.00 line earlier today. Been quite some time since I've seen prices in the $13s, although, as I'm writing this, spot sits at $14.01.

Buying opportunity?, or my classic buying mistake of "trying to catch a falling knife'?

Noticed APMEX currently has an EBAY special, selling 2015 BU silver eagle rolls for $339, or $16.95 per coin. Also the lowest I've seen in awhile.

Any thoughts?

TCK
Click to expand...

TCK,

On my Ebay watch list, I use the memo box where you can leave yourself a note. Except, I put "11/30...$339" and this way I keep a visual note of how a vendor like APMEX or SILVERTOWN changes their Buy IT Now sales as silver market prices change during the day and during the week. APMEX wrote me when I asked why their BIN auction changed, and said their EBAY accounts are set up to change their listed prices "every 10 minutes if the market changes".

What just floored-me happened about two weeks ago. I saw APMEX was selling silver in lots/rolls of 20 eagles. At the last of their sale, the Ebay page showed 39,000 rolls were sold!!! They must know something we don't. If silver was projected to go up before the end of December, why would they sell such a huge number of silver rolls? Even since then, I've seen APMEX sell over 1,000 rolls of silver eagles in one of their BIN offers. Wish I knew what was going on.....

The only thing that keeps me looking at the silver bullion is when I realized what I missed out on after 9-11's twin towers' tragedy. In the following weeks, I well remember that gold went below $300 an oz. and the memories of what "IF" I'd taken $10,000 out of my IRA and bought gold still haunts me.... But, everybody was scared to do much else other than stop spending and watch as much and as many newscasts in the following days. The car companies went crazy trying to sell their 2001 and 2002 vehicles with low/no interest loans and large sticker credits. My aging vehicle made me question the need for gold as to reliable transportation in case something else happened to cause prices to skyrocket or if there were shortages in all types of manufactured goods. Common Sense weighed-out and I didn't buy gold.

So, over the years I've taunted myself as to what I should do about buying PM's. I've come to the conclusion that buying precious metals is identical to buying car/homeowners' insurance. You are going to spend the money on insurance because it's required by your Mortgage Company or State Law for your auto. Most years all you get is the ability to buy your license plates, safety sticker your auto and lots of "Peace of Mind". But, I've realized something! There has not been a single time where when the insurance was needed to repair damage roofs to my home and out buildings, I've always come out ahead. The grand total collected by the insurance company of $2,000.00 a year has been well UNDER the amount paid out. Between major storms' damage by golf ball size or larger hail over a 15 year timespan, this last repair claim totaled just over $52,000 of checks paid by the insurance company.

Like any expenditure, it's going to take a good and a creative look at the monthly household budget. But, it might mean just a shorter vacation or keeping the lawn tractor a few more years; major or minor trade-offs can be found. I'm thinking that buying/finding silver and gold compares the same way as buying household insurance. In 15 years from now, how much profit can be made by then, or between now and then by spending $200 to $2000 a year solely spent on PM's? Plus, physically having PM's offers "Peace of Mind", too. You've got to start somewhere; now is better than two years ago.

I'll keep stacking...:wink:
Bill
 

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billjustbill said:
TCK,

I've come to the conclusion that buying precious metals is identical to buying car/homeowners' insurance. You are going to spend the money on insurance because it's required by your Mortgage Company or State Law for your auto. Most years all you get is the ability to buy your license plates, safety sticker your auto and lots of "Peace of Mind". But, I've realized something! There has not been a single time where when the insurance was needed to repair damage roofs to my home and out buildings, I've always come out ahead. The grand total collected by the insurance company of $2,000.00 a year has been well UNDER the amount paid out. Between major storms' damage by golf ball size or larger hail over a 15 year timespan, this last repair claim totaled just over $52,000 of checks paid by the insurance company.
Bill
Click to expand...

Interesting observation, Bill.

I, too, buy PMs, partially to act as a hedge against other investments, as well as unknown future events. Pretty much the same concept as buying insurance.

Also, your comment on weighting gold purchases with maintaining reliable transportation is, in my book, right on point. No reason to believe that PMs will singularly solve whatever problems the future may hold. Providing for life's other necessities, including transportation, is also important.

The best way to prepare for an uncertain future is to diversify, both in investments, and in providing for future contingencies. For me, PMs play a small, but important, roll in both.

What part of the state are you in, Bill?

TCK
 

$13.75 this morning. Wouldn't mid buying a little at this level, but premiums around here and online are just way too high. Guess I'll stand pat.

TCK
 

I have two side bets going:
1. Silver will hit $12 before hitting $18
2. Oil will hit in the $20s before back to $40s.
Meanwhile, after dumping silver in the low $40s, I bought stocks averaging 5% cash dividend--and have now waited years as silver is closing in towards $12--when I will reenter that market. I've lost about 10% on the stock value (offset by 5% dividends); a lot less than if I had held or been stacking silver for the last 5 years. No doubt, inflation has eaten most if not all of that 5% dividend over the years. Had I bought one rare coin instead, I probably would have been further ahead. (Something about hindsight being 20-20.)
Don....
 

billjustbill said:
What just floored-me happened about two weeks ago. I saw APMEX was selling silver in lots/rolls of 20 eagles. At the last of their sale, the Ebay page showed 39,000 rolls were sold!!! They must know something we don't. If silver was projected to go up before the end of December, why would they sell such a huge number of silver rolls? Even since then, I've seen APMEX sell over 1,000 rolls of silver eagles in one of their BIN offers. Wish I knew what was going on.....
Click to expand...
eBay actually subsidizes some large sales and writes the expense off as a marketing cost. APMEX is one of the sellers participating in these eBay sponsored sales events. I'm unclear how much eBay throws into the event, but you could imagine, what they offer, e.g. reduced or no final value fees, a free listing allotment, free paid placement on eBay, etc.

This is the "Deals Page" where eBay features these sales events. eBay Daily Deals: Best Deals of the Day - Plus Free Shipping!
 

As an eBay Associate we earn from qualifying purchases.
So I was wondering would now be the time to buy shares in oil? You know it will bounce back and we could be the next millionaires......
 

Kingskid,

Personally, I don't think it's a bad idea to add some oil stocks to your portfolio. Be careful to make sure you're buying into a financially stable company, as fallout in the industry is underway now. The big boys, such as Exxon Mobil are certainly stable, but won't get the price movements you're probably looking for upon recovery. I would look a little farther down the size ladder.

Disclosure: I'm in the oil biz, but that doesn't make me a stock expert. These are just my thoughts. Be sure to do your own research.

Now back to silver.......Current price is $13.76, with the Fed decision on rates looming. Anyone want to guess how a rate increase will affect silver prices? Historically, silver has been considered a hedge against inflation, right? I'm not so sure about that action these days. My guess is that couple of rate increases has already been priced into the current level. That doesn't mean that we won't see a price movement (up or down, albeit probably temporary) upon announcement of the Fed's decision. Guess we'll just have to wait and see.

TCK
 

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C C, the last time I looked, Exxon was paying 5.6% dividends....that's quite good considering that a one year C D MIGHT pay 1%.
 

Goose-0 said:
C C, the last time I looked, Exxon was paying 5.6% dividends....that's quite good considering that a one year C D MIGHT pay 1%.
Click to expand...

Goose,

It looks like XOM is paying $2.88 annually, which translates to 3.65% at the current price. Still a far cry from CD rates, so your point is well taken.

I guess you could look at investing in XOM in a couple of different ways. On the positive side, the dividend would allow you to enjoy reasonable returns, and then look for a price increase when oil prices recover. On the negative side, many energy stocks have cut their dividend recently, and they could as well. Also, interest rate pressures (the fed has now started raising rates) tend to hurt relatively high-yield stocks in the same way you see an inverse relationship between interest rates and bond prices. Interesting dilema.

Based upon Kingskid's post, I am assuming he is looking for an oil stock that is poised to "pop" when prices recover. XOM is more of a "Steady Eddie" (has only lost 17% in the last year, while many in the industry are down over 50%). That's why I suggested he look for a smaller company with more upside potential. Really depends on the risk/reward relationship one is looking for.

Just my thoughts,

TCK
 

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My apologies C K. I was thinking the 5.6% dividend was for XOM whereas it was actually for AT&T. (I have a little of both)
 

"The past 4.5 years have seen this precious/industrial metal trend sharply lower and lose over two-thirds of its value. In 2015 silver prices dropped below $14.00, and it appears there is still more downside price potential in the coming months. The longer-term monthly continuation chart for nearby silver futures shows strong chart support does not show up until around the $10.00 area. For the bulls to gain some significant longer-term technical strength they would have to push prices back up to the $18.00 level, which would break the longer-term price downtrend in the silver market."
Source: Forbes Magazine (quoting Kitco) here:
http://www.forbes.com/sites/kitconews/2015/12/21/gold-and-silver-2016-fortunes-tied-to-price-trend-in-crude-oil/
Don.......
 

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