Bullion Dealer Reacts to Silver Price TRIPLING in 5 Years

Summary

In this conversation, experts discuss the rising price of silver, which is approaching $40 an ounce. They reflect on past silver crashes and share insights on the current market, where a slow, steady increase contrasts with the more volatile spikes of the past. The panel talks about buying and selling silver and gold, with many customers coming in to trade old jewelry for precious metals. Concerns about silver's potential to crash are tempered by strategies for managing inventory and minimizing risks. They also discuss the broader economic factors influencing silver prices and the possibility of even greater price surges.

Takeaways

• 😀 Silver is approaching $40 per ounce, with expectations that it could hit that mark soon, either today or by the end of the month.
• 😀 The current price surge in silver has been relatively gradual, avoiding the dramatic spikes seen in previous market shifts.
• 😀 The increase in silver prices has been linked more to paper trading and speculation than a strong demand for physical silver.
• 😀 Many people are selling silver and gold jewelry, often because they are unaware of its value or are looking to liquidate assets.
• 😀 Dealers have to stay cautious about buying large amounts of silver, especially given past market crashes, like the 1980s Silver Thursday event.
• 😀 The market for gold and silver sees a lot of action, with dealers buying and selling quickly to avoid holding onto inventory too long, which could result in financial loss.
• 😀 Although silver is nearing $40 an ounce, there is still uncertainty over whether it will stay at that level or continue to climb.
• 😀 Some dealers are optimistic about the price of silver potentially surpassing $40 and even moving toward higher levels like $50, as seen in the past.
• 😀 Older generations, particularly those who lived through the 1980 crash, remain cautious and prudent, not wanting to repeat past mistakes of holding too much silver or gold.
• 😀 While silver prices are climbing, some customers are selling to get out of positions where they may have bought at higher prices, such as in 2011, hoping to minimize losses or make a profit.

Q & A

Why is there a focus on silver hitting $40 an ounce in the script?

The script highlights silver's potential to hit $40 an ounce, reflecting the significant price movement and the reactions of the industry and customers, as well as concerns about market trends and risks associated with buying and selling precious metals.

How does the market react when the price of gold and silver increases?

When the prices of gold and silver go up, people are motivated to buy more, especially those looking to trade or sell their old jewelry or silver. It creates a cycle of both buying and selling, with customers often surprised by the value of their items when they come to sell.

Why are people selling their silver and gold during the current market situation?

People are selling their silver and gold for various reasons, including paying off debts, purchasing homes, or other financial needs. Some are also looking to minimize losses, especially those who purchased silver at its peak prices in previous years.

What was the significance of the 1980 silver price crash, and how does it relate to today's market?

In 1980, silver prices soared to $50 an ounce before crashing dramatically on 'Silver Thursday'. This event taught dealers the risk of holding large quantities of silver without quick turnover, a lesson that influences current strategies to keep silver and gold moving, especially in volatile market conditions.

What is the difference between the current silver price increase and past parabolic rises?

Unlike past silver price surges, the current rise has been gradual and steady, rather than a sharp spike. This organic increase is attributed to various factors, but it hasn’t been driven by speculative events or major crises, making it less likely to result in a sudden crash.

How do refiners affect the silver market and the buying decisions of dealers?

Refiners play a crucial role in the silver market by buying large quantities of silver, often at a price lower than the spot price, which affects dealers' buying and selling decisions. Dealers must manage inventory carefully, ensuring they do not accumulate too much silver without a buyer, to avoid potential losses.

Why is it important for dealers not to sit on large amounts of silver or gold?

It’s risky for dealers to sit on large quantities of silver or gold because the prices can fluctuate dramatically, as seen in past crashes. Dealers must keep inventory moving to avoid significant financial losses if the market turns against them.

What are the challenges when buying silver at higher prices?

The challenge with buying silver at higher prices is the potential for a market downturn, as history has shown that precious metals prices can drop unexpectedly. Dealers need to manage their inventory and lock in sales quickly to mitigate risks.

What are the predictions for silver prices if they surpass $40 an ounce?

If silver surpasses $40 an ounce, the price could see significant daily increases, similar to the behavior of gold. Dealers predict that silver could jump by substantial amounts per day, making the market more volatile and creating a potential rush of retail buyers once silver breaks new price levels.

Why do some people continue to sell their silver, even with rising prices?

People continue to sell their silver despite rising prices because they may need cash for specific purchases, such as paying off debt or making other financial decisions. Even if the price is increasing, individuals often sell for practical reasons rather than purely for profit.