# Gold and Silver continues to go down?



## goldenchild (May 16, 2012)

Overall prices of consumer goods hasn't gone down. The dollar hasn't gotten any stronger and things don't seem to be getting any better, yet gold and silver continue to go down. Any speculation on why this is? 


P.S. I know the price of crude oil per barrel *has *gone down but not gas prices. Straight up greed?


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## philddreamer (May 16, 2012)

Hi Mario!

From what I understand, the dollar has gotten stronger when compared to the Euro, according to this chart, (last 12 mos.):
http://www.dollars2euro.com/

I compared it with the price of gold for last 12 mos. chart for gold from Kitco, http://www.kitco.com/charts/popup/au0365nyb.html and there seems to be a correlation in the price of gold and the dollar getting stronger, (or weaker).
I'm sure that several other factors are involved.

Phil


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## Palladium (May 16, 2012)

Come on $750 oz gold. :mrgreen: 

I guess its not good for the long term investor but my profit margins are the same wither it's $2000 oz or $750. I think the market needs a shake up to help thin out some of the Johnny come lately people and get rich quick gold buyers. So many people have their hands in the cookie jar it's making it where a cat can't hardly make a living. Just like every other market it just needs to cleanse itself.


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## Geo (May 16, 2012)

when i sold my first refined bar gold was around $1,425 and i thought it could never go any higher than that. if it drops back to below a thousand, i may stop refining for awhile to see if it goes back up.


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## nickvc (May 16, 2012)

Geo said:


> when i sold my first refined bar gold was around $1,425 and i thought it could never go any higher than that. if it drops back to below a thousand, i may stop refining for awhile to see if it goes back up.




You don't want to stop refining just selling 8)


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## acpeacemaker (May 16, 2012)

That would be nice to see gas go back to .70 and .80 cents to the gallon. I remember my Dad used to throw a fit if he ever had to get it at .99 cents.


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## DONNZ (May 16, 2012)

Cost of refining doesn't go down. Nor does your overhead. Buying scrap must be adjusted.

Direct correlation between the price of Gold and the dollar.

A strong dollar buys more Gold, weak dollar buys less Gold. 

Then add the Euro (Greek) problem, China weakening. Sorry China, you can't own the US this year but please come back next year and try again. 

Use this a a buying opportunity. Scrap Gold, scrap Silver, Lead. 

Lead? Wait a minute, lead is not a PM. What the heck are you thinking about?

It's not a PM but here's something to be aware of.

http://www.bloomberg.com/news/2012-05-14/lead-shortage-looms-in-13-on-record-demand-for-batteries.html

Lead Shortage Looms in ’13 on Record Demand for Batteries (Update 5)


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## jimdoc (May 16, 2012)

DONNZ said:


> Lead Shortage Looms in ’13 on Record Demand for Batteries



Don't forget bullets!

Jim


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## DONNZ (May 16, 2012)

"Don't forget bullets!"

Well stocked.


Gold shows the strength or weakness of the dollar.

Right now buying the dollar is the least risky of all the risky currencies. 

Wonder what the Greek's will be buying with all the billions their removing from the banks? 

Some under the mattress, most going out of country. But not in a Greek Bank. It's a run.


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## MMFJ (May 16, 2012)

jimdoc said:


> DONNZ said:
> 
> 
> > Lead Shortage Looms in ’13 on Record Demand for Batteries
> ...


but, that's what powers the batteries!  
http://en.wikipedia.org/wiki/Artillery_battery


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## element47.5 (May 16, 2012)

> The dollar hasn't gotten any stronger



Not so. The dollar has strengthened quite a bit on Euro weakness, and the market is expecting massive Euro weakness to come, via printing over there, to fix the Greek and Spanish problems. The dollar has gotten noticeably stronger in the past month or so, and that is where we have seen PM weakness. Also showing up in oil and soft commodities.


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## element47.5 (May 16, 2012)

And by the way, gas prices, which have risen quite noticeably here in CA while falling lower in most of the other parts of the country, have been affected by the closure of I believe 3 west coast refineries. Plus, we have these boutique blends of gasoline which are mandated over season changes here in Lotusland. 

I would therefore not use the displayed pump price of gas as an indicator, even though I fully recognize that when you pull the twenties out your pocket, those are just about the most real indicators there could be, LOL, I would use the futures price of WTI intermediate crude, or RBOB gas, or heating oil. Not sure where you are located, but CA gas prices have bumped about 15 cents in less than a month. Looked like they were headed down there for while. Nope.


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## Geo (May 16, 2012)

price per gallon on independent gas here is $3.31 a gallon today, down $0.10 from last week.


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## element47.5 (May 16, 2012)

Sure, Gulf Coast, where the refineries are, where many fuel deliveries occur, where the intense air regulations AREN'T is going to be a price leader on the downside. Here in CA, where we have to add Chanel No 5 and some Patron Tequila to our gas and have Barbara Boxer bless it before it can be pumped, anything can happen. CA usually has the most expensive gas in the US, outside of tough delivery zones like NYC and Hawaii on center-city in the largest half dozen US cities. Nominally, CA is 35-50 cents higher than average prices elsewhere. Gas was trending down towards the $4.20-$4.30 zone ten days ago. Now, blammo, even the cheapo stations are $4.39-4.45...no mercy.


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## Palladium (May 16, 2012)

I drive back and forth to Birmingham from where i live. My average gas cost for a week is $150-180 just to get to work. That don't even include wear and tear or my time for driving (2-3 hours round trip)


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## nickvc (May 17, 2012)

Don't know why you guys are moaning about the price of gas over here in the UK the cheapest I can find is....wait for it....$9.65 a gallon :shock:


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## Geo (May 17, 2012)

nickvc said:


> Don't know why you guys are moaning about the price of gas over here in the UK the cheapest I can find is....wait for it....$9.65 a gallon :shock:



i have a nice travel trailer i can rent to you by the month when you decide you want to move to the cheaper side of the world. :lol:


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## nickvc (May 17, 2012)

Geo said:


> nickvc said:
> 
> 
> > Don't know why you guys are moaning about the price of gas over here in the UK the cheapest I can find is....wait for it....$9.65 a gallon :shock:
> ...




A good offer Geo but I can't afford the petrol to get to the airport :lol:


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## NobleMetalWorks (May 17, 2012)

Ever wonder why, out of all the precious metals, gold fluctuates as much as it does? Specially when very little fiat currency is backed by gold?

And then to say that the Euro or Dollar back gold prices? Now that seems a little off to me.

I think of it like this, the gold market is so tightly manipulated that whenever it goes up or down, it's more than likely that someone is in the background somewhere, artificially manipulating gold prices. Either by selling off or undermining a currency while promoting another, everything that you see gold doing currently is a direct result of being manipulated.

So don't worry, those people will want to take their profit soon enough, and gold prices will again, continue to go up.

I would also suggest if you are processing e-waste, that you follow the trend down, so long as gold is going down, harass your suppliers to sell you e-waste for less. This is a dream, it's like a gift being handed to us. Take advantage of the down trend and buy as much high grade, cheap, as you can. Scrap yards still have to pay the bills.

Scott


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## glondor (May 17, 2012)

nickvc said:


> Don't know why you guys are moaning about the price of gas over here in the UK the cheapest I can find is....wait for it....$9.65 a gallon :shock:



That is unbelievable. Oil companies the world over are rapeing all of us. Their greed is hammering world economies, stifling growth, raising inflation and generally bringing many institutions and industries to ruination. How can they possibly justify over 9 dollars a gallon in Britain? Don't you have large oil fields? Yes you do. Same here in Canada, Some say the largest reserve of oil on the planet in the tar sands in Alberta, (depends on whether the Saudis are lying about what they have left) And prices continue to rise. 

You know, There is a conspiracy theory about one world government, If you think about it, we already have it.....Oil companies. They can make or break any economy in the world. And with that leverage, they get what they want, when they want it. He who controls the energy... controls the world. Just a rant......Sorry.


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## NobleMetalWorks (May 17, 2012)

Gas prices go up when the oil companies need to actually discourage consumption of gasoline/petrol. The reason being, there are not enough oil wells to pump enough oil, fast enough to supply the demand if gas prices were where they actually should be. If you can imagine, oil companies are trying very hard at times to discourage the purchase of fuels. That's why you don't usually see commercials of gas station chains trying to sell gas, but instead focus on their stores, oil, or just a commercial with some guy standing in the middle of a field talking about the environment and how much his oil company cares.

Anyway, that's my story and I'm sticking to it...

Scott


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## nickvc (May 17, 2012)

Oil like gold is the same price the world over perhaps excepting transport costs, the real thief in our gas prices,well all energy prices, are the government and their huge tax take from them, we even now pay a green tax to help cut emissions.... :roll: :shock:


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## DONNZ (May 17, 2012)

And to top that off:

Miles per Gallon

According to "Ethanol Explained," when using ethanol to fuel an ethanol-ready vehicle in place of gasoline, fuel economy drops 20 to 30 percent.

If it's mixed in with gas your mileage also goes down. Costing $$$$


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## martyn111 (May 17, 2012)

nickvc said:


> we even now pay a green tax to help cut emissions.... :roll: :shock:



Or for them to waste (sorry did I say waste when really I meant spend for our benefit :roll: ) it on whatever else they want to.


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## DONNZ (May 17, 2012)

I was wondering: 

What charts do you prefer, Kitco or pmbull?
pm changed 4 charts to 1 and made it interactive. I like the change and moved it to the top of my list. 

http://www.pmbull.com/gold-price/
http://www.pmbull.com/silver-price/


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## glondor (May 17, 2012)

Sbrown. Generally it is an artificial shortage generated by the oil companies them selves. They have been closing refineries for decades, limiting their own capacity to supply. Contrary to popular belief, there is plenty of oil, but a limited capacity to refine and store it. I spent 15 years removing all the regional storage capacity in Ontario for all the major oil companies operating in Canada. It is easier to "create" a shortage if you have no fuel stored. I pulled hundreds of 10 and 20 thousand gallon tanks that were used to buffer and supply areas all over Ontario. Social manipulation at it's finest.


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## NobleMetalWorks (May 17, 2012)

I will agree with you that there is a lot of oil in the ground, however, you can only pump so much, so fast out of the ground. Currently, if demand is allowed to run rampant, all the oil wells in the world couldn't pump enough oil, to refine fast enough, to supply the actual demand. We have already exceeded peek oil.

I have a cousin that works for Chevron, he is involved in the future need for fuel in the US any given year. It's a complicated mathematical equation he uses that requires information on how many drivers at whatever given age are driving in whatever given year. So lets say for example that most drivers are between 25-35 years of age, then he would figure out how many people were born who would be that age, and how much fuel they would consume, then you consider market share, expansion, there are a ton of variables but you get the idea. The oil companies know when they need to raise gas prices to discourage consumption.

These numbers are different for each state, take California for example, we have the most expensive gas prices in the Unites States, but I also believe that's because we have the highest population, and we consume more gas.

Refineries are closed down for many reasons, for the most part existing refineries are using newer technologies that allow them to increase their output so they can eliminate other refineries they no longer need, saving the company money. They do not close down a functioning refinery because they want to play with gas prices. Remember, gas is produced to replace our reserve of gas, what you pump out of a gas pump came from a reserve tank, not from direct production. As the reserve goes down, the prices go up, this is true. However, the prices are going up to discourage consumption of gas because the reserve is going down and cannot be replaced fast enough to keep it at a null change. Conversely, when the reserve of gas isn't being used fast enough, and the production is more than consumption, gas prices go down to encourage purchasing of gas.

Production of gas increases every year in the US, if closing down refineries was meant to jack up the price of gas, then our production would be down.


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## glondor (May 17, 2012)

Some interesting charts. Production flat to declining http://www.indexmundi.com/energy.aspx?country=us&product=gasoline&graph=production

http://205.254.135.7/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGIRIUS2&f=M
Consumption up.
http://www.ixvivxi.net/wordpress/chart-of-the-day-2010226-u-s-gasoline-consumption

All refineries in the U.S. are with in a hair of operating at full capacity. Except for 11 operable refineries that are idle. 

http://205.254.135.24/petroleum/refinerycapacity/table1.pdf

Draw your own conclusions.


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## eeTHr (May 17, 2012)

In 1960, if you had three dimes, you could buy a gallon of gas.

Today, if you had those same three dimes, how much gas could you buy?


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## Oz (May 17, 2012)

eeTHr said:


> In 1960, if you had three dimes, you could buy a gallon of gas.
> 
> Today, if you had those same three dimes, how much gas could you buy?


In my part of the country I could now buy close to 2 gallons of gasoline with those 3 dimes, instead of the 1 gallon of gasoline they would buy in 1960. In 1960 dimes were 90% silver, weighed 2.5 grams, and contained 2.25 grams of fine silver each. At today's $28.00 silver spot price those 3 dimes are worth $6.08.

Oddly enough gas prices have gone down when you take monetary inflation into account. It is not that the value of goods are getting more expensive, it’s that the value of money is getting lower.


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## goldenchild (May 17, 2012)

Oz said:


> It is not that the value of goods are getting more expensive, it’s that the value of money is getting lower.



This is very well worded and what I was trying to get across. Of course prices of goods will never go down. It's the purchasing power of the dollar that is diminishing.


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## NobleMetalWorks (May 18, 2012)

glondor said:


> Some interesting charts. Production flat to declining http://www.indexmundi.com/energy.aspx?country=us&product=gasoline&graph=production
> 
> http://205.254.135.7/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGIRIUS2&f=M
> Consumption up.
> ...



First, consumption and demand are two totally different things. The mechanism that keeps them different is prices. As consumption nears production, prices are driven up to discourage consumption. The number of refineries has just as much to do with the amount of available oil to refine, as it does for demand of refined products. If 11 refineries are idle, that only proves that the technology is more efficient because production really hasn't slowed too much.

So to clarify, the demand is higher yet the consumption is flattening out which means there is some mechanism in place that is discouraging the purchase of gas. To put it more plainly, the price of gas in this country has nothing to do with how many refineries are producing gas, a more efficient refinery outputting more gas because it is so, has lower operating costs and therefore should be able to sell their product for less, but they do not. The reason, again, is that gas prices are used to discourage consumption. More refineries would only mean higher gas costs. I have heard the oil refinery argument many times before, but it just simply is finger pointing with no data to back up the claims.

Your graphs do prove however, that even though there are more people in the United States now than ever before, even though there are more licensed drivers in the US, than ever before, gas consumption is starting to flat line. The only reason that could be is that gas prices are so high, people have been discouraged to drive. If the oil companies wanted to make more money, and they really did have an endless supply of crude to refine, then consumption would be skyrocketing upward, but it's not. More refineries would be built, but more are being shut down. Do you see now the trend and why it's not being caused by oil companies shutting down refineries?

Scott


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## Geo (May 18, 2012)

i remember when mexico went into hyper-inflation. their money was worthless in any denomination. my father was a driver for S.O.S. (southern ohio steel) and made several trips to mexico city picking up container loads of mexican coinage sold to american refineries for the metal value. most was cupernickle with some brass and silver. the paper currency wasnt worth wiping with and for two years they ran on the barter system of exchange.


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