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What determines gold/silver prices?

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The only factor I can think of is if people lose faith in the monetary system and think some type of doomsday is going to come so they exchange fiat currency for currency with intrinsic value like gold.

Apart from this why the hell would gold/silver rise/fall? pretty confused, but it also seems volatile and a good place to try your luck
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Supply and demand
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Here's what Bernanke said in 2013:
>“Nobody really understands gold prices and I don’t pretend to understand them either."
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>>971239
XD! (laughing face)

>>971242
Do you think theres any way to make a relatively safe profit from gold/silver? May sound stupid but the only thing a person could do is look at historic prices and buy when theyre low and sell when they are near the historic high
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>>971232
Supply and demand, like any other commodity.

If you think "lose faith in the monetary system" scenario is what drives it, you're a fool. Gold. The top 4 uses for gold? Jewelry (78%,) electronics and technology manufacturing (13%,) medical devices and systems (5%,) bullion and coinage (1%.) The remaining 3% is "everything else" like gilding and such. Silver is about the same.

While dumb bastards who are hoarding gold because "fiat currency" and "muh hyperinflation," all they can do is skew the market. PM's remain a commodity, and hoarders are just another customer driving demand.
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>>971248
>Lose faith in monetary system
That was just an example, I didnt mean it as an extreme, and yes gold is basically a component for many things. The problem is, its not really possible to quantify when people demand less and more jewelry and other stuff, sure you could say "oh well the nation gdp isnt doing so well which means consumer expenditure is going down" it doesnt appear that gold reflects the national gdp historic outputs
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>>971232
Supply and demand play a significant role but other forces are at play such as over all economic condition, state of substitutes and advancements in technology. Can pretty much say demand is manipulated by the big players. LMBA takes the cake there.
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>>971246
>>>971242
>Do you think theres any way to make a relatively safe profit from gold/silver? May sound stupid but the only thing a person could do is look at historic prices and buy when theyre low and sell when they are near the historic high

Easy, become a secondhand dealer and refiner source. I buy junk coins, bullion and the like at 20% under spot, and sell them at 20% over spot. For those items, that gives me a 40% spread to maximize profit opportunity and drastically minimize risk (eg, today's close was $14.15. At this exact moment if you brought me a beater of an Eagle, I'd buy it for $11.32. Tommorow, I'd sell it for $17. Silver would have to slide to $9.48 for me to "break even" on that buy.)

I also invested in an xrf machine five years ago. Someone brings me junk jewelry (broken chains, single earrings, etc) it gets melted down and I either buy it at 60% of spot for immediate cash, OR I give them a ticket and wait until my refinery sends me the settlement (and the buyer gets 90%, I get 10%.) The reason is, if it's a cash settlement on the moment, I maximize my profit immediately (up to 38% return on gold, normally about 20% on silver.) I can afford to be more "generous" with someone who's willing to wait because that puts all the risk on the seller since I'm just a middleman, taking a cut.

For jewelry that's still in wearable, I buy it at full spot because I can easily sell it at 150-200% of spot.

The legal side depends on your jurisdiction, but the general rules are easy (normally PM dealers fall in the same group of rules as pawnbrokers, and there are us Patriot act reporting requirements.) It's the ONLY way to guarantee that you'll make money on metals.
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>>971252
So you're not a complete fool, but you actually said *exactly* what drives it. Consumer sentiment. Jewelry and demand for jewelry and other consumer goods is the key driver for it. Historical trends show that prices go down in the lead-up to Christmas. Reason? Because manufacturers have already bought and are using up their stocks. The uptick begins in February when the holiday season numbers come in and allows for some forecasting of future demand.

"Fiat currency" and "muh hyperinflation" is just one aspect in consumer confidence. People gravitate towards gold and silver, but this retail buying is largely offset because they're not buying jewelry, cars (largest use of platinum, worldwide, is in catalytic converters, not jewelry,) and other consumer goods that use these metals.
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>>971232
>currency with intrinsic value like gold.

There's no such thing as intrinsic value. People ascribe value based on properties that they desire.

In the case of gold as currency, it's scarce, divisible, durable, and transportable.

>>971246
>>Supply and demand
>XD! (laughing face)

What the fuck are you laughing at? Are you one of those idiots that believes in the labor theory of value?
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>>971232
fed policy
which affects supply/demand
but also realize that when price is lower, demand is naturally higher.
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>>971983
>What the fuck are you laughing at? Are you one of those idiots that believes in the labor theory of value?
The labor theory of value is important, it's what allows quality goods to be sold and in many cases runs counter to supply and demand. But the key word is quality. When a product is mass produced shit, the value is lessened. If a man puts skilled labor into his product, he can improve its value overall. This is why a hand-crafted table set made of solid oak can retail for thousands when an equally functional but mass produced particleboard product will only go for a few hundred.
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>>971280
> sell them at 20% over spot.

Sell them where?
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>>972368
on thu screets, nigguh
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>>972351

I hope you're joking.

Compare apples to apples: a hand crafted oak table to an exactly identical mass produced oak table.

They *might* sell enough hand crafted oak tables to yuppies who want to brag to their friends that they have a hand crafted table to stay in business. Likely not, though. It's much more likely that the hand crafted table maker will go out of business.

All value is subjective. How much work you put into something is entirely irrelevant to how much someone else values the finished product. You could spend a year working on a single table and find that not one person values it at more than $1.

The labor theory of value is entirely discredited and has been for a long time.
https://en.wikipedia.org/wiki/Criticisms_of_the_labour_theory_of_value
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>>972368
I have a small storefront. Enough to be comfortable, not really rich (last year, after taxes and overhead I made $78k. Back in the boom year of 2011, I brought in almost $390k, but that was a high-water mark by a long, long way.)

>>972384
Not joking in the least, and you haven't compared apples to apples. You've compared apples to applesauce, or gummi fruit snacks that have apples as an ingredient, or "apple flavored" syrup that's made of corn and petrochemicals. You're espousing utility theory. To you, a hand crafted oak table, made with the loving care that only a 105 year old Amish guy can do has the exact same value as a high quality but mass produced (say, Broyhill or Magnusson made) table, has the same value as a Ikea flatpak, has the same value as a $15 folding cardtable from Walmart.

Nothing is further from the truth. While each product has identical utility, it does not mean each has identical value, and each exists in its own market segment. A man who wants the quality and craftsmanship that only 80 years of woodworking experience can impart will spend the money if he has it. Alternately, the guy who buys all his furniture from Walmart's housewares department will find no additional utility in an expensive table (but he will find much less value in it.)

Marx was wrong, no amount of unskilled, unqualified labor will add to value, but skilled labor will always add value to a product.
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>>972442
>Not joking in the least, and you haven't compared apples to apples. You've compared apples to applesauce, or gummi fruit snacks that have apples as an ingredient, or "apple flavored" syrup that's made of corn and petrochemicals. You're espousing utility theory. To you, a hand crafted oak table, made with the loving care that only a 105 year old Amish guy can do has the exact same value as a high quality but mass produced (say, Broyhill or Magnusson made) table, has the same value as a Ikea flatpak, has the same value as a $15 folding cardtable from Walmart.


Are you listening to yourself? You're the one comparing apples to applesauce. You're comparing an oak table to particle board.

I'm saying, if there's no difference in quality between hand crafted and mass produced - and for many products there isn't - the hand crafted version is going to lose out, because not many people will pay up for an IDENTICAL (apples to apples) product.
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>>972455
>I'm saying, if there's no difference in quality between hand crafted and mass produced - and for many products there isn't - the hand crafted version is going to lose out, because not many people will pay up for an IDENTICAL (apples to apples) product.
But they're *not* identical products. That's the thing. A high end, mass produced table is not going to have the same workmanship as a high end one off. It can be close enough, but the two products still exist in different markets.

A hand-made 1936 Martin D-45 is physically identical in all practical aspects to a 2006 Martin D-45E (the current mass market version.) If you were right, then the 1936 D-45 would cost the same (perhaps a slight premium because of the age and scarcity.) They're not. A D-45E runs about $9,000. A D-45 (if you can find one, and there's only 91 ever made, all by hand) will be at least $300,000. They're physically identical.

So, what's the difference? The first run D-45's are all hand-made. One luthier would take it from start to finish. Each piece of wood was hand selected. The first D-45, made for Gene Autrey, took 6 months to make. A current D-series? About 5 days. Do you think Martin has the time to put one guy on each guitar they make now? Nope, because they're no longer in the hand-crafted, one off guitar market.

Again, utility and value are NOT one in the same. If they were, a $300k D-45 is the same as a $10k D-45E, is the same as a $40 "First Timer" kids guitar. Utility wise, they're all playable guitars. Value wise, completely different markets, different customer bases.

How hard is it for you to acknowledge that two similar products does not mean two *identical* products?
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