This is a wee update on an older post. What has changed recently?
- I amended my label for the upper range from "sell gold and buy silver" to "hold gold and buy silver" for a couple of reasons; 1. I hold gold mainly as a hedge against local currency and USD devaluation generally and also increasingly in light of increasingly obviously un-serviceable levels of sovereign debt / quantitative easing that started September 2019. Also 2. Because now that I have some gold, I will be unlikely to part with it just because its price is up in fiat currency terms. You don't cancel your insurance policy when times are good, neither will I sell my gold for a fiat profit. 3. These things are really hard to time and the most important factor; general loss of faith in paper assets will likely result in a significant re-pricing of gold (and silver) to much higher levels (I likely won't sell either if gold goes up 200- 400% but will reduce or stop regular purchases). While I am a big believer in silver, as borne out over the past 2 months (although there was a spike in premiums while the silver futures price dipped - which made 'buying the dip' difficult) I do not want to be a long-term holder of silver - given how volatile it is and the greater storage costs. So, silver I will sell when the G/S ratio hits some key levels.
- The economies throughout the world are in significant turmoil, a lot of mines are shuttered still (the North and South American silver miners seem in for a long-haul). Seeing as silver is primarily an industrial metal, I have been impressed with is relative performance of late. It seems that silver demand has been brought forward and is, at least, counter-acting what may be lower industrial demand. As gold hangs out between USD1650-1750 it is quite possible that a significant portion of investment demand has turned away from gold and towards silver as people may "see" more upside for silver as well as possibly more value for money.
Another amendment, "So, silver I will sell when the G/S ratio hits some key levels." To clarify, some of my silver holdings I will seek to convert directly to gold at G/S ratio of 40 or below (fingers crossed) without having to liquidate into fiat, the rest I don't have the same option, so I will sell for local currency and then buy gold with the proceeds. My aim is to use the delayed upswing (the general consensus last year was that silver would follow gold with about a 6 month delay - it turned out to take a little longer) and the larger volatility of silver to end up with more gold than I would have been able to buy with my money when I initially bought my silver. So, its a swing trade, but not for currency, its a swing trade for more money (gold and silver). I didn't end up putting all my eggs in one basket and have 75% gold and 25% silver with the hope that the silver will enable an outsize gain in gold holdings.
Silver purchases started mid-2019 with a 3-5 year trade expectation (with very low storage costs of 0.63%pa). For additional leverage, I have also invested in small gold miners. One I am positive about is a small miner, yet to progress to production but with audited accessible gold reserves of $1.8 billion but with a market cap of $20 million, a low production cost (when they actually produce), and production permitting in place for the next 17 years. While miners are riskier, I decided to pivot to undervalued miners / developers when the gold price approached its all-time-highs in the full awareness that it was a speculative play (permits can be cancelled, mines can have serious issues etc). If I can receive fiat gains that will enable me to buy relatively more gold I will also be very satisfied. If you would like any details on the low storage cost bullion Company or the gold miner, please DM me. I am not involved with, or seeking to promote either but am willing to share info on a direct basis.
Holdings geographically diversified across 3 jurisdictions.
Silver purchases started mid-2019 with a 3-5 year trade expectation (with very low storage costs of 0.63%pa). For additional leverage, I have also invested in small gold miners. One I am positive about is a small miner, yet to progress to production but with audited accessible gold reserves of $1.8 billion but with a market cap of $20 million, a low production cost (when they actually produce), and production permitting in place for the next 17 years. While miners are riskier, I decided to pivot to undervalued miners / developers when the gold price approached its all-time-highs in the full awareness that it was a speculative play (permits can be cancelled, mines can have serious issues etc). If I can receive fiat gains that will enable me to buy relatively more gold I will also be very satisfied. If you would like any details on the low storage cost bullion Company or the gold miner, please DM me. I am not involved with, or seeking to promote either but am willing to share info on a direct basis.
Holdings geographically diversified across 3 jurisdictions.