Saturday, August 27, 2016

Diversification and the dollar overhang.

Precious metals are notoriously difficult to trade. Even traders turn out to be right, knowing when to place and press your bets won't be easy. Gold and silver are small, fairly illiquid markets relative to the kinds of positions the biggest "macro tourists"  non-professional investors  have on. If you want to know what is happening in the money supply, look to the lending portions of the economy, not base money, to get the real story.
The Fed wants to see lower prices of stocks and commodities and it seems that they will. The situation for gold is also rather bearish for the medium term as the gold-to-bonds and Dow-to-gold ratio charts suggest that another decline may be in the cards.
While the physical silver market goes far beyond APMEX, both domestically and especially internationally, the buying habits of the (large) APMEX client base could be considered a decent proxy for the overall retail market. The APMEX Top 40 Best Sellers page lists several silver coins and rounds, along with gold, palladium, and platinum products. Disregarding fractionals, the silver coins and rounds were listed in the following order, as of May 25:
1. APMEX Silver Round (Legally, issues by private minters are not considered "coins" at all and must be referred to as "rounds.")
2. Silver American Eagle
3. Silver Canadian Maple Leaf
4. Silver Mexican Libertad
5. Morgan / Peace Silver Dollar
Gold prices Silver prices