Once upon a time, on the planet Earth, the element silver appeared. Shiny on its leading. Shadow on its trail. Then, in silvers shadow, the element gold appeared. Heavy at its ass. Yellow at its trail. Then, and finally, in the browning shadow of the yellow trail, we have You. The place in space, and the Moment in time, where the Void begins. Where Jim said: Scotty, destination Random, Warp 9!
Great research as usual Pirocco. I suppose if you are right, this understanding can benefit those who were making significant purchases of silver based on what the price of gold was doing? Is that your overall point?
This subject is new to me. As said, I just discovered it myself, after reading recently that silver tracks gold, I learnt to have the habit to check things before taking them for true, and so far, this one didn't came to my attention until a couple days ago. So at the moment, I don't know myself if this is something useful to plan silver purchases. Hence why this topic is a question in itself, the reactions of people give me potential other approaches (no matter true or false), that I can use to widen my view on it. The primary thing I'm on, is to understand what is behind it. In the end, a price goes where people drive it, so if the sequence silver peak > gold peak happens alot, then there must be a specific explanation / reason why people act that way. One theory is that central banks and their buddies buy more gold when they see that silvers price is driven up more than gold. Another theory is that this returning sequence is due to people that buy silver as inbetween step to gold. Milk the silver market to get more gold. Because how does that practically go: they see silvers price going higher and higher, then at some point they sell it, and sit with cash. Of course, when silvers price sits high, golds is also high, so it may be logical that they try to wait till after the correction finished and both metal prices dropped. So they may hesitate for some months, maybe even a year, during the downtrend, to then swap the silver-derived cash to gold. I saw several small indications during later 2011 and 2012 supporting this. And now I think about it, the cause of the sequence may be a combination of above. Because I see people that buy more gold with their silver based profits, also as stackers, and if they pay the higher gold prices after silvers peak, and thus drive golds price further up, then they lose as well due to their gold buy-high. But the fact that golds price rises to a peak in the year after silvers price rose to a peak, is weird, because in order to drive gold there, it would need ALOT silver based profits. So very likely, during the period between the silver peak and the subsequent years gold peak, others help ALOT to drive the gold price higher. And that, may well be the very reason why central banks became net gold buyers in 2011: Net Government Sales (positive means it's [SUPPLY], negative means it's [DEMAND]) (tonnes gold) Every 'delta' is the difference with the previous year. 1997 326 <- start of successive delta 1998 363 <- delta 37 1999 477 <- delta 114 2000 479 <- delta 2 2001 520 <- delta 41 2002 547 <- delta 27 2003 620 <- delta 73 2004 479 <- delta -141 2005 663 <- delta 184 2006 370 <- delta -293 2007 484 <- delta 114 2008 236 <- delta -248 2009 30 <- delta -206 2010 77 <- delta 47 2011 -455 <- delta 532 <- record change 2012 -544.1 <- delta 89.1 2013 -368.6 <- delta -175.5 See that huge difference 2010-2011. It was an alltime record, with a big distance to the second highest (293 in 2006). Well, see how well it fits in the combined of aboves theories. Very likely, the central planners and their buddies first let the gold stackers (also the temporary ones / profit seekers) drain off silvers market. Then they make gold appearing stronger, by buying gold big, as to make those silver > cash > gold people quickly receiving less gold, AND as extra luring the silver stackers into purchases as a second run up. See, this is how I try to learn things. I see something new, then I try to see if it can be given a place in a story with what I already knew, and if it all comes together, then it's bingo, another step forward in understanding what is going on. But I don't take these steps lightly, and in this case I first want to find out if there are other elements also supporting it. For ex, the gold ETF purchases showed a bottom in 2011: ETFs and similar products 1997 0 1998 0 1999 0 2000 0 2001 0 2002 3 <- delta 3 2003 39 <- delta 36 2004 133 <- delta 94 2005 208 <- delta 75 2006 260 <- delta 52 2007 253 <- delta -7 2008 321 <- delta -68 2009 617 <- delta 296 2010 367.7 <- delta -249.3 2011 154.0 <- delta -213.7 2012 279.1 <- delta 125.1 2013 -880.8 <- delta 601.7 There are some remarkable figures here. Look how in 2011, despite the high price, the gold ETF purchases were the lowest since 2004. So what drove the gold price up then? Again an arrow to central banks. So that $1500 to $1900 gold trend in 2011, after silvers $50, was probably mainly due to central banks buying that record amount / having that record delta with the previous year. Because several elements point to it. And in 2012, gold ETF's bought again more, to then have in 2012 extremely huge sales, where they sold about 1/3 of what they purchased in the decade earlier. It would be interesting in I had aboves data for earlier silver peak > gold peak seqences. But it's alot work to find it, for ex, I'm searching since months for that silver survey 2000 that once was published as a book. And that's just one of the many data elements I need, so if I'm realistic, I doubt I'll be able one day to reconstruct such longer ago storylines, as to see if they are similar as aboves 2011 draw.
As a highly uneducated reader of silver stackers, I find people like Pirocco can make some of these things interesting incluing humour and speculation and analogies. Not really boring and repetitive to my mind but reaching out to the common punter as well as the professional, well done Id say.
Well you might be onto something after all Pirocco. Sitting at my trading desk while silver tanks and gold does nothing, infact goes up a bit (over a 30 min period). Figured there must be a correction comming, so I put a gold short in and 20 mins later... like clock work. But from what I can see this delayed response with gold happens rarely and you would be lucky to spot the opportunity. Also, silver could of just as easily corrected back up with gold. I will keep my intraday eyes open for this now. Cheers.
Another repeat then: my topic uses year average annual prices, with as reasons that these reflect the amount money put in silver, and the actions that cause this sequence, thus also occur on that annual time basis and on the average price level. So your 30 minutes / intraday time frames/chopping, is just as useless/irrelevant as flypaper in the sea. So if you wanna cheer somebody, check the mirror.
who cares, your posts are 'intellectual' in nature and are guaranteed to loose people money. Like every financial asset, and yes PM are a financial asset, its really quite beautiful, when the 'intellectual' class gets shot down. Asset pricing is not a democracy, and more importantly its pricing is not the result of the cumulative 'opinion' of everyone else. That's why investing in financial assets is a pure survival of the fittest.
