Silver plunges 30% in worst day since 1980, gold tumbles
cnbc.com
cnbc.com
I started with a single 1 ounce silver medallion and was given a quote for $80. When I had checked the silver price earlier this morning it was above $115.
I questioned the buyer about the spread and he said the spot price was down, and the smelters were backed up so that was their best offer.
I brought out some other silver coins, specifically liberty head and Morgan dollars. He looked at the app on his phone and said “hold on I gave you the wrong price,” and then said “I’ll give you $35 for each of them,” including the pure 1 oz silver medallion.
I said no thank you and left, miffed, thinking he was jerking me around.
I didn’t realize the price of silver was collapsing.
Source: Am full-time professional coin dealer (who is NOT fly by night!) and have to deal with the repercussions of people getting hosed by these roadshows all the time :(
Do these coins get smelted down or something?
I'm speaking from the perspective of US coins because that's what I specialize in but this generally applies to coins all over the world as well:
Prior to (and including) 1964, US 10c, 25c, 50c, (and when they were made, $1) coins were made of 90% silver. We made A LOT of these, so in terms of outright rarity, most are not rare. Today they're referred to as "junk silver" because in terms of collectibility, they're junk, but the 90% silver content means there's some inherent precious metal value (as of this moment on Jan 30, 2026, they have ~approximately~ 60x their face value in silver content, eg $6, $15, $30, and $60 in silver respectively.)
So that's their basal value that fluctuates with the silver market. But the next layer is actual rarity / collectibility -- if a given coin is desirable enough that it surpasses its metal content, you get a different set of values.
Now to your actual question: Do they get smelted/melted down? The answer is...sometimes. They trade somewhat like financial instruments, based on the assumption that you could melt them down (and there's a cost to doing so), so that's how people value the various silver coins. In reality, there's usually enough demand from people who want to hold physical silver in various forms that they don't actually need to be melted down.
There's obviously a lot more to it, but that's the 5c version ;)
The reason is that silver itself is traded on the various international commodity exchanges and those traders are not the same supply & demand sources as the little guy(s) who likes keeping some old silver coins in their garage. So as those supply/demand curves shift, the premium over/under spot price changes as well.
In my case I buy old French 20 francs coins as they are quite "cheap": 1% above spot price of their gold content (they are 90% gold).
Other more recent coins, like Chinese or Canadian ones, sell at a much higher premium (17%, 20%) so I always wonder a bit who they are for. It's unlikely they can be resold for that much of a premium. At least the shops I use just buy them for their price in gold.
I don't know the details because I don't really care about gold as an investment, but everything I find says variations of "the 3g Gold Pandas have a face value of 50 Yuan and are legal tender in China.". It would be subject to VAT in Belgium anyway if it was not considered to have legal tender.
And that's the smallest one, I seriously doubt many people buy a 4000 € (30g) coin as a tourist gift.
Huh, none of these coins are in general use in any country because it would make no sense (their facial value is always largely below their metal value, which is basically constantly appreciating). As a French person I have never seen 20 francs coins in circulation either, and I wouldn't by my baguette with one, but they are still obviously not a "scam", even if their actual value doesn't match their face value. I mean, I should know since I actually buy them, manipulate them, and use them for their gold content.
The page you linked is quite unlikely to be a scam (except that it sells the coin for quite a premium, compared to what I can get at home like say https://www.argentorshop.be/en/gold-coin-chinese-panda-30-gr... in Belgium).
I think you don't understand how these gold coins work, honestly I don't claim I really understand why central banks produce them either, but they do exist and they seem like a convenient way to invest in real gold (and here comes my initial remark: but why choose the ones that sell for a premium as compared to the ones that sell just for their weight in gold, that I don't understand).
You can get more information on the Chinese Gold Panda coins on Wikipedia if you like: https://en.wikipedia.org/wiki/Chinese_Gold_Panda
"Legal tender" doesn't mean what you think it means.
It has nothing to do with what coins/notes are in circulation or commonly accepted.
https://en.wikipedia.org/wiki/Legal_tender
Bullion coins are typically marked as 'legal tender' (of a nominal value relative to the precious metal content) as doing so exempts them from sales tax in most jurisdictions..... because they are technically "legal tender" (coins) and not bullion.
e.g. British sovereigns are still produced and have a "legal tender" value of £1. Though the gold content of one is currently about £800 last I looked.
So you can smelt any silver coins minted by the US except for the WW2 silver nickel.
Is that 5¢ copper or zinc?
The face value of a coin may be driven down, based on the exchange value of the currency itself. A coin with a nominal value of 10 but, say, a specie value of 11, is literally worth more melted down than in exchange. This is the dynamic of the Law of Oresme, Copernicus, and Gresham (usually referenced simply as "Gresham's Law").
"The Law of Oresme, Copernicus and Gresham", Thomas Willing Balch Proceedings of the American Philosophical Society, Vol. 47, No. 188 (Jan. - Apr., 1908), pp. 18-29 <https://www.jstor.org/stable/983793>
More generally, when a product's exchange value differs from its production or use value, paradoxical results occur. Gresham's Law, Lakoff's "Market for Lemons", arguably the Jevons Paradox, the phenomena of wine and audio kit pricing divorced from any defensible consumer capacity at discrimination, and enshittification all seem to fit this with reasonable amounts of shoehorning. Also my own "tragedy of the minimum viable user".
And that means people will buy and sell it for the specie value. The specie value is the value.
Bullion coins like silver can be worth exactly what the metal is worth, or more. Never less than what the metal is worth.
Just because a gold philharmonic coin might be minted with a €100 nominal value, doesn't mean that it is worth that. If you think so, I'll gladly buy all your gold coins for their nominal value.
When you said "a coin can never be worth less than the metal it contains", I think you meant "no matter what number is on the coin, its value is always equal to or greater than the value of the metal"; but dredmorbius misinterpreted your comment thinking you meant "the number on the coin must always be a higher value than the metal would be worth if it wasn't shaped like a coin".
AKA when carlosjobin wrote "be worth" you meant "value to sell", but dredmorbius thought you meant "value written on it".
I might be wrong, maybe it's me misunderstanding one or both of you - in which case please correct me - but I'm fairly sure you're both correctly thinking the same thing while incorrectly thinking the other person isn't.
The absolute nature of carlosjobim's claim makes it fairly trivially falsifiable, however. Since nominal value is a value, if the face value of a coin is lower than its specie value, its use as currency meets his absurdity condition, "Of course a coin can never be worth less than the metal it contains...", but that remains its legal tender face value. As money, that is, an exchange token socially recognised as having a universal value, the coin is exchanged below its commodity value.
As a commodity, that is, metal (or other material) specie, the same item may have a different and higher value, but in this case it's not one which is universally accepted within a given market, but rather is dependent on the specific local market supply and demand of that specie. The coin-as-commodity is also subject to differential valuation based on characteristics --- assayed purity, weight, etc. --- which must be assessed on an individual basis for each coin.
In practice, where specie coin was used it virtually always traded at a premium above the commodity value, known by the term seiniorage, which I interpret as the trust value imbued by the currency issuer. My (unorthodox) view is that seigniorage exists in all monies, and is efectively the total basis for value of fiat systems such as paper or credit-based financial systems. The value of such currencies is a market vote on the trust in the issuing entity (and/or the lack of viable or accessible alternatives).
But again, coin-as-money has a value equal to its notional face value. That the face value may differ from its commodity value can of course occur. My argument is that this makes the exchange one of commodity trade rather than financial trade, and that ascribing commodity value to coin or face value is a misdirection.
Some years back looking into what money is, I realised that the names for virtually all currencies can be traced to either weight (pound, peso, dinar, penny, shekel, kopek, livre, baht, etc.) or division (dime, quarter, cent); or quality (dollar, crown, royal, franc, renminbi), sometimes appears as a signifier of value, e.g., the florin, yuan, or yen. I'd classify toponymic names (e.g., afghani) as referencing quality. There are the odd exception, notably Bolivar, the Venezuelan currency named for Simón Bolívar, though that's arguably a quality signifier.
nominal: existing or being something in name or form only (Merriam-Webster)
Mind that the problem is actually the inverse of what you describe. It's not that the nominal value is greater than the intrinsic specie value which causes problems with coinage, it's where the monetary value is less than the commodity value of specie, in which case "bad money drives out good". I've already discussed that in detail.
One point worth making explicit is that the receiver of such an under-priced coin would be more than happy to receive it, it's the spender who has to weigh the loss in commodity value against the nominal transactional value, should their counterparty only agree to acknowledge the latter. This brings up the further point that in an exchange, transaction price (whether nominal or commodity) depends on the alternatives available to the parties. A spender without alternatives on price or obtaining desired goods/services might well spend a higher-commodity-valued coin at its nominal value. Should they be aware of that difference, they might well not be happy about the fact, but they'd be forced into the trade by circumstance.
So when you sell silver at a pawn shop or to a retail dealer, here's what happens in a normal market. You get an instant price, 5-10% off spot hopefully. That dealer then takes that silver and sells it to a refiner in higher volume with a lower margin (to spot). That's their profit. Refiners will convert that silver into bars and sell it to wholesalers and institutional buyers.
But instead what's happening is the refiner needs to hold onto the silver for 7-14 days before it gets smelted and processed. With high volatility, they're not paying out the dealers until it's processed and sold. That's a huge cash flow problem. Instead of instant money, it's money in 2 weeks and you have no idea how much money.
So the retail dealer has to wait and it could be 20% lower or 20% higher in the current market so instead of 5-10% they eitehr have to offer 30%+ less than spot price if they buy it at all. That money tied up has an opportunity cost.
Combine this with a shortage of physical silver to deliver on futures contracts and the refiners aren't really getting the silver they need to satisfy that demand.
So the spot price is fake. Nobody's buying anyway. Low wholesale supply means the prices continue to go up. Banks are haemorrhaging money because they have huge short positions. They have to borrow silver to meet their obligations and the silver lease rate (the price to borrow silver for a money has like 10x'ed) and this is where we are.
The entire narrative is made up and this is really just supply vs demand in terms of silver contracts and shares. I have been actively trading silver since last year and made over $100k and in precious metals (mostly gold) for 30+ years since I first graduated from college so I'm not just an idle spectator.
But of course there will be a large bid / ask spread on collectibles and small quantities of precious metals. Dealers have to make a profit. Anyone who doesn't like the price is free to sell on eBay or at a local coin show or something.
PS: eBay charges 14% or something. I also know very well that Pawn Stars is scripted, but the business side is true to life.
Wait. It "collapsed" to the price it was on the 9th of january 2026. Which back then was it's all-time high.
FWIW I hold SLV (a BlackRock/iShares ETF on silver, the biggest and most liquid silver ETF in the world) since $26. I noticed the recent craze. So I bought PUTs when it was at $102, protecting me at a strike of $96. These PUTs were pricey but, so far, worth it. But here comes the kicker: I'm financing those PUTs by selling CALLs on SLV (that simple options strategy is called a "collar").
And as I'm a silverbug, I own silver coins too. But these aren't liquid as you noticed.
When you trade paper silver (like the ETF SLV), the price of the market is the price of the market. SLV is not 100% following an ounce of silver's price, but SLV's market price is SLV's market price. It was $105 at close yesterday and $75 at close today and that's just the price of SLV.
I do like that: not getting ripped off by some side-of-the-road hustler.
That dude giving you $80 then giving you $35 is taking a more than 50% cut compared to the nearest low of day. That's quite a rip off.
When they opened the door, they said "so many people came in and bought everything", both sweating and breathing heavy. Lied right to my face. They left out like five generic 1oz silver bars and a small gold coin.
And again, when the price was high, they don't want to pay anywhere near the spot price.
I learned this: silver/gold is definitely not something you buy to "flip", at least in the short term. It's something you buy and hold for as long as you live, if possible, perhaps passing it down to your kids.
Honestly, I don't think Warsh's appointment had much to do with it.
Side note and completely unrelated, but I got my kid a 10 oz .50 caliber silver bullet last year and kicked myself for spending that much on a gag gift (like $300). . . . Should have bought a box of them.
I have nothing to back this up, but I believe a group of investors learned from cryptobros just how easy it is to pump and dump with social media and scare tactics, and here we are. Somebody please correct me.
Meme stocks might coincide with meme coins - but I don't know if it's fair to blame crypto for everything.
I think the reality is that - for whatever reason - people are willing to take on MUCH greater risk today for reward than they were prior to the pandemic.
I don't think we can blame crypto for everything. Sure, maybe you could say crypto has been meme-ing since 2017 - 3 years before the pandemic. But we've seen plenty of speculative bubbles like that - if it even was one.
Crypto didn't really start meme-ing with clearly bullshit NFTs and meme coins until the exact same time - 2021 - when Dogecoin et al have meteoric rises coinciding almost exactly with all the meme stocks.
I think this is actually one the best meme indicators: https://coinmarketcap.com/currencies/dogecoin/doge/btc/
The Japanese Asset bubble was by far the biggest bubble of all time - and it lasted nearly 6 years. The Nifty 50 was a 7 year bubble, nowhere near this big. So, we might be in a bubble - but if we are - it's getting close to being the biggest, longest one ever.
I’ll quibble that people have no idea of the risks they’re taking. I read somewhere that amateur stock traders spent something like 4 minutes researching their purchase. Balanced portfolios are just too boring and tedious.
Yes. Because if you don't make a successful high-risk high-reward investment, you will spend your entire old age in poverty. There won't be any retirement benefits for workers.
Next week we'll find out if this was a buy on dip opportunity or if it marks a multi-year top in precious metals and the start of a deeper correction and real technical damage.
One day that will happen and the trend will reverse, but it's always more probable that a trend continues.
If gold continues growing at the same rate as the last 6 months, it will take gold all of a month and a half to get back to where it was.
https://i.imgur.com/bRAy1FB.png
Now, gold might not continue growing, but D.C. hasn't fixed its problems that are causing gold to rise, so I do have a degree of confidence that it will recover quickly.
That said, I agree with you that this feels like a bunch of prominent exits to convert paper profits into actual ones. The underlying problems remain and will become increasingly exacerbated as the year drags on.
I figure I’ll recover losses by this time next year if I just refrain from panic selling.
But if we take statements at face value and do not think critically… Also there are bad actors trying to push a direction. One cannot assume one account equals one person.
Mexico is ~25% of supply. Mexico, China, Peru account for 50%. The Top 10 countries account for 80%.
About one third of this demand (photographic film and paper) more or less evaporated in the 2000s. You don't see that on the price chart, so I don't think you can seriously argue that the price is dictated by industrial uses.
While dollars, euros, and all other currencies are all imaginary within databases and don't exist in reality.
That isn't the case with silver or gold, for the most part, and what are you really going to use them for, now that there are so many excellent rust-resistant alloys?
It would be more surprising if the 30% drop was spread out over a month.
And these signals are usually very compressed in time because acceleration is actually just an acceleration in the number of decisions being taken, which tends to blow off quite spectacularly.
Something that has changed is the large retail participation, which is making the scale of these moves quite crazy. Will be interesting to see what happens next, as with crypto the scale of the wipe seems so large that it is hard to see how that participation continues.
Healthy for markets but I am guessing this will conflict heavily with the politics.
I cashed out :)
It is amusing reading the comments on here. Silver dropped 50% in 1980. Silver is the original memecoin. I think people care less though about market events that happened before they were born. It is like the way I know the entire story of silver in 1980 even though I was a little kid but nothing about the Nifty Fifty a decade earlier.
Nothing for me with commodities will ever top -$37 per barrel during Covid with oil. That was a level of market shell shock for me that I just can't imagine being topped.
People want to get rich quick.
There's going to be a never ending list of people that will tell them how - just so they can get useless karma points on Social Media, even if they don't make any money, and just convince you to lose your money.
What about Amish people? Or Buddhists?
you mean like these trading Bros parachuting onto a yacht and placing a trade and telling me that I could do this too with the correct mindset from their exclusive Telegram group?
:-D
Is it the beginning of a longer-term down? I have no idea.
I haven't been following this gold and silver saga, but it feels like a similar situation where there were two possible Fed appointees who would have vastly different impacts on the price of the metals. Then the announcement comes and the price found the world where that was the nominee and not the other guy.
The 2024 election was a time of great uncertainty, and Trump's first year in power delivered a reality worse than the fears. Trump is still throwing random tariff threats (and actual tariffs) around without rhyme or reason, but he's discovered that threatening to invade (allied) countries can stir things up even more effectively. Choosing a lackey to replace a competent federal reserve chair isn't going to help matters. We're just one quarter of the way through Trump's presidency (assuming he lives and doesn't seek another term), and it seems like the uncertainty is just going to get worse.
However, that uncertainty is, by no means, certain. Domestic resistance and midterm elections could curb Trump's power. International resistance is starting to coalesce. e.g. The EU's threat to use their "trade bazooka" probably contributed to Trump's TACO on Greenland, as did the potential demise of NATO. Responses to Trump's international graspings will likely become more prompt and more muscular, reducing the instability Trump can cause. The system has been shocked, but now its adapting. Many nations are hedging against U.S. centred uncertainty by pivoting to China or other allies. Global markets will likely become more stable as nations learn how to work around Trump's chaos by working around the U.S.. Still, it's very possible that Trump will find new and "creative" ways to make everybody freak out again.
Bottom line, the uncertainty that's been driving gold prices up since 2024 is going to let up at some point. But when? How overvalued will gold be when it does let up?
No person shall be elected to the office of the President more than twice, and no person who has held the office of President, or acted as President, for more than two years of a term to which some other person was elected President shall be elected to the office of the President more than once. But this Article shall not apply to any person holding the office of President when this Article was proposed by the Congress, and shall not prevent any person who may be holding the office of President, or acting as President, during the term within which this Article becomes operative from holding the office of President or acting as President during the remainder of such term.
Which makes Trump's repeated claims that he was elected in 2020 doubly stupid.
The dump is proximately caused by Trump picking a normal Fed chairman. Nobody on TikTok has anything to do with that, they're just pumping everything because seeling out is their day job.
Do you have any idea how much you'd need to pump?
Gold mining dates back to ancient civilisations.
Our best estimates suggest that around 216,265 tonnes of gold have been mined throughout history.
Interestingly, about two-thirds of this gold has been extracted since 1950.
This massive increase in production has been due to advancements in mining technology and the discovery of new gold deposits.
200 Years of Global Gold Production, by Country - https://elements.visualcapitalist.com/200-years-of-global-go...
Between 1500 and 1650, the Spanish imported 181 tons of gold and 16,000 tons of silver from the New World ...
What's your estimate for the tonnage of gold "hoarded since biblical times" ?
Good question, I would say your guess is as good as mine, but looks like you have recent statistics !
Thanks for the information, it does look like realistic figures about as accurate as you can get.
I just accept that as much as possible gold has always been hoarded much more strongly than silver amounts having the same values at the time.
Enough to regard silver as a medium of exchange compared to gold as a store of value.
Gold is so tightly hoarded that I expect that there is more than one accumulation established centuries ago, that originally consisted entirely of ancient gold which is comingled with material from the 20th century and maybe newer by now.
It's also possible that before any human value was established for gold in prehistoric times, there might just have been untold megatons within reach as low-hanging fruit without need to do very much "mining" at all.
Of course cave men had no formal education but they were sapiens just like us and had plenty of progressive generations over thousands of years to shrewdly recognize the advantage of not telling anybody about "untold" amounts of anything when it's regarded as valuable. At least some of them anyway :)
And they sure had orders of magnitude more time to pursue economic interests and accumulate wealth before recorded history than there has been since then, no telling what they were keeping off the books when there weren't any books yet !
Edit: Not my downvote! Where did that come from? Corrective upvote now placed.
Spoiler: I did a few decades of exploration geophysics, some time working on the production circuit of the SuperPit, and part of a team that sold a global minerals intelligence database to Standard & Poor 16 or so years ago.
(No big deal, I'm just old and happen to have literally mapped uranium / copper / gold / et al. resources and reserves about the globe for clients in the past)
> there might just have been untold megatons within reach as low-hanging fruit
And yet the total amount of known gold in all of history is less than a quarter of a single megaton .. you're suggesting mega tonnes of gold from from before the Roman Rio Tinto mining days have lasted more than two thousand years stacked up as nuggets in many many many caves and structures without being found.
That's an interesting hypothesis.
> Of course cave men had no formal education
Interestingly nor did my father (born 1935) and he's still walking about
> recognize the advantage of not telling anybody about "untold" amounts of anything when it's regarded as valuable.
Can you expand upon the value of megatons of gold to cavemen ?
> no telling what they were keeping off the books when there weren't any books yet !
Oh, you know, gravitometers, ground penetrating radar, seismic surveys, etc. are all means of exploring for things not yet on any ledger.
> Edit: Not my downvote!
I don't fuss much about those, not on my comments, and I see no reason to downvote yours - just ride it out, they mostly even out over time.
All of this is in light humour, your comment caught my eye as I wasn't sure if you were serious, jesting, hadn't thought through the physical implications of a perhaps throw away comment, etc.
I think cave men are interesting because almost nothing is known about them.
Except that they were just like us.
If you go back far enough they could be in a cave lined with gold and not care about it at all.
Sooner or later though people coveted it so much they would kill for it. Maybe even Neanderthals too ;)
Meanwhile right there in Colorado there were many kilos of gold sitting at the bottom of a lonely river, still just waiting millennia for people to come along and gather it up. By the time settlers got there and were finished sifting out the gold, a whole city had been built on the spot, and Denver has been there ever since.
I would expect there were a lot more places like that which were never recorded, and by the point that biblical times got here had been tapped out and forgotten for millennia.
Sorry about seismics but my only exposure is from petroleum and I was not one of the geologists so not very involved.
But Trinidad is a major example where you didn't need subsurface imaging to find petroleum since there was so much of it floating on top of the water when foreign explorers arrived at the islands. Some people made plenty of money after its value was recognized from just the amount that was coming out of the ground by itself, before any drilling for the mother lode.
First come, first serve though. If an exorbitant amount can be controlled early it can provide an outsize hoard before anyone else has a comparable chance, and the relative advantage in financial strength so there is no threat to the accumulated wealth.
I would think that once gold was deemed desirable in prehistoric times, it didn't take that many more generations for some to appreciate the advantage of keeping the hoard together so they could retain more "critical mass" and power relative to adversaries.
When there is any adversarial situation, lots of times modern man didn't want anybody to really know the depth and type of their assets for strategic reasons. Other times they may have wanted the opposition to think they have way more resources than they actaully do. I guess plenty of people ever since have been no different, so anything is possible.
The key event that caused the collapse is sometimes called Silver Thursday [1]. The exchange changed the liquidity rules, forcing a margin call the Hunt brothers couldn't make, forcing a selloff. This was arguably to bail out banks with large short positions in silver.
Well, pretty much the exact same thing happened this week when COMEX massively increased the margin requirements [2]. It's worth noting that the market is in a state called "backwardation" where the spot prices are higher than future prices. Refiners aren't buying silver, even at the inflated spot price, because of price risk. But also, the COMEX spot price is increasingly being viewed as "fake" because foreign exchanges are paying significantly more for physical silver thna the paper COMEX price [3].
Basically, this whole thing looks like another GameStop ie a short squeeze. There's not enouugh physical silver to meet contract demands. There's like 300oz of futures silver contracts per 1oz of physical silver.
If you followed the original GameStop short squeeze, the price tumbled there too but didn't solve the short squeeze. You even have exchanges closing people's options positions (eg RobinHood) despite them being in the money.
Banks still need to cover their significant short positions and it really looks like the exchanges are trying to crash the silver market to do it.
[1]: https://en.wikipedia.org/wiki/Silver_Thursday
[2]: https://www.bloomberg.com/news/articles/2026-01-28/cme-raise...
[3]: https://seekingalpha.com/article/4861917-why-silver-prices-i...
That ends badly. It ends badly for the lenders. So when it starts to look like that's what's happening, a perfectly reasonable response is to change the margin requirements. When the circumstances are normal, use the normal margin requirements. But when the circumstances are abnormal, of course they should adjust.
Silver crashed because China halted trading on the only public silver and gold ETFs Friday. There are videos of HK police arresting guys freaking out because they couldn't cash out beforehand: Apparently the fund had been operating as some kind of pyramid scheme and was not solvent at those prices.
Also on Friday, China urged investors to "invest responsibly" or some such (source: FT) and froze a bunch of suspicious accounts. I believe those accounts were behind the pump and dump social media ("AI Asian Guy" videos on Youtube, investment subreddit spam) with the help of plenty of useful idiots.
There's a ton of good coverage of the precious metals run up in FT this past week.
That's my point: they're intentionally trying to crash the market. The analsysi that they're defending the banks from a short squeeze seems to fit the available data [2].
As for China, the government is ensuring their local industries have sufficient silver supply, which is particularly important for solar.
The US government has a lot of power to do similar to this but refuse to use it because it would hurt profits. I'm thinking specifically of the Defense Production Act, which could've been used to lower oil and gas prices in 2020-2022. Instead we passed on the costs to consumers, let oil companies export to the world and let them make record profits.
[1]: https://www.linkedin.com/posts/ryanlemand_this-chart-is-wort...
[2]: https://finance.yahoo.com/news/everything-investors-know-his...
1) the market was looking for an excuse and the new Fed chain nominee was as good a reason as anything.
2) The margin requirements on metal futures changed THIS MONTH. Instead of having daily limits, they changed the margin requirements for futures contracts in real-time throughout this move. Futures brokerages calculate margin requirements every second, so what happened was as silver dropped today, the margin requirements got more strict and then people were being liquidated out of their positions immediately. This caused the markets to crash the way we did all day.
Previously, what you would see are circuit breakers kick in and the contracts would stop trading for a certain amount of time. You never used to see down 30% days ever, because circuit breakers would limit is. You would see limit down days, and the contracts would stop trading for the rest of the day and then reopen the next day. In the 70s and 80s I think there was a time when some contracts would open at limit down for 15+ days in a row and wouldn't trade for the entire day and people were financially ruined because they couldn't get out of a position for weeks on end.
So finding an excuse to sell on top of forced liquidation is what you saw today. It's a classic volcano top and I think silver is going to drift lower for the rest of the year.
https://markets.financialcontent.com/stocks/article/marketmi...
SP500 with reinvestment for comparison is 72%
NVidia without reinvestment 900%
This has happened multiple times. You may not be able to guarantee it, but I strongly suspect precious metals are a repeating pump-and-dump scheme. It could be money waiting to be made by those that see the pattern, or maybe it won’t happen, who knows?
The event I'm betting on is Silver shortage and the removal of ETFs from chart price calculations. Though this price drop may be a delay... Or maybe lower prices could hasten demand, leading to that scenario.
Precious metals is a weird market I guess as price rises can drive demand just as well as price drops.
Gold is usually invested in as a hedge against inflation. It's not really the gold that goes up and down in value, it's the dollar that goes down and up.
I'm pointing this out because I have seen a lot of sentiment recently about how the dollar is crashing, just look at the price of gold. Yes, the dollar is decreasing in value faster than usual, but it also isn't crashing in the way that gold is spiking.
This sentiment I think drives speculative gold demand, from standard speculative investing FOMO as well as from emotionally driven inflation fear well beyond what is realistic. The same thing happens to the stock market.
So like some of the increase in gold price is due to the decrease in dollar value, certainly, but it isn’t all of it, and at the present time I don’t believe it is near to most of it.
(I know about the commenting about downvotes rule but I don’t feel this fits the pattern of what that rule wants to prevent)
In a theoretical scenario where there are many competing substitutable currencies it should work like that, but we are not in that theoretical scenario, are we?
It is the miracle of modern capital markets that enables almost anyone to quickly and easily invest their savings in productive assets, but of course capital markets aren’t perfect. The availability of “none of the above” options (like gold) that remove savings from the pool of active investment capital is the essential feedback loop that balances risk and return.
People buy it and sell it. I don't see any difference between bullion, iron ore, frozen concentrated orange juice, and Pokemon cards. You buy a thing, you pay the sales tax.
Iron ore is similar physically, but it's really just a raw input material/ingredient used for heavy industrial manufacturing and production, it's never been intended to be an appreciating asset/hedge against inflation.
I'm unfamiliar with whatever tax is being referred to in this specific comment thread, but I'd be curious how something like $SIVR is handled, considering it's backed by actual silver in vaults. That could lead to some unintended consequences if the investment plans of a lot of money suddenly changes how it's being allocated.
Gold is not intended to be an asset/hedge against inflation either. Market participants believe that gold has value and that it can hedge against inflation. The belief is what gives life to gold being as a hedge against inflation.
Gold is not an asset, it’s a commodity, an industrial input, and material for jewelry, and for some reason I fail to understand, people buy and hold it because they believe it is an asset that will appreciate in value, but it’s just an elementary metal that is useful for being easy to work with (jewelry) and because it doesn’t oxidize. It does not generate income, you can’t eat it, and in a post-apocalyptic scenario, it’s useless. I suppose the density of gold would allow some very small, very high mass slingshot balls you could defend yourself against people with?
Off topic and this might be apocryphal, but I heard on the internet a good reason to keep “money” in the form of gold chains and other jewelry, is that it counts as personal property, so if you’re arrested during a drug bust or trafficking women, your cash and bank accounts may be seized, but whatever you wear to prison gets put in a ziplock bag and returned to you when you leave :)
Do you want less investment?
Its price reflects that utility and like any modern asset, a lot of speculation. You can speculate on whether it's more or less useful given current events -- nothing wrong with speculating that it is only going to be increasingly useful.
Speculation is not the same as investment, and it is still completely non-productive.
Investment is a weird term because most people would consider keeping cash or cash equivalents (gold) to be investments, even if they don't generate wealth. Cash is also an opinion, in terms of the market.
How is this any different than buying a house? Buying a house that's already been built is pretty damn close to the same thing as buying gold. No new "work" is being done into the economy, you're just exchanging dollars for an asset that will likely appreciate a bit faster than inflation but less than $SPY.
The person you bought it from can do something else with that money, sure, but that's also true of the other person in your transaction to buy gold.
Maybe you'll say a house has more utility than bars of gold, but all of this at the end of the day, seems to come down to your specific views and judgements of what it means for capital to be used productively. So to circle back to the beginning, what is it you're advocating for here? That because you don't see gold as a low risk hedge against inflation as being "productive" it should face more taxes to incentivize it not happening?
It relies on the greater fool theory to produce excess returns. It is bad for the economy when money idles in non productive speculative assets.
In this case 1/2 of the trade is a dead end. In another hypothetical transaction we might see that the money was instead used to pay for services, and that profit was then spent on food, and then it was spent on fertilizer, and then it was spent on chemicals, and then it was spent on mining, and then it was spent on energy, and then it was invested in.... You get the idea. You can follow a single dollar around the world for years. The money is exchanged, and then exchanged again and again generating profits and adding value to the economy with every exchange.
With the purchase of gold that half of the transaction is instead just... dead. The money is no longer in the economy, it's locked in some dudes junk drawer or a safe instead. Worse, it's not being used to generate excess returns like all of the items above are.
Gold is just... useless. Except of course as a store of value, but even then it's only good if you think the dollars value will decrease and don't care that it's not great for the world around you to extract money from the economy and render it effectively dead.
The TLDR being that the money exchanged for that useless rock is now wasted. It could have been used to provide genuine economic value, instead it was used to participate in another silly, wasteful, "greater fool" game.
If you are hoarding an unused house we should heavily tax that to make it unreasonable to do so.
I mostly agree with you, but I don't think the house comparison is good. Houses require lots of maintenance, and to hold their value (comparable to other houses) they often need remodeling every decade or so. If instead of houses we just said "land" then I think the comparison would hold up more.
How do you apply this to housing?
You want investment in housing. You don’t want slumlords ramping up prices for slums. Presumably somewhere has got the balance correct. I haven’t been to that place.
Not a whole lot once legal tender certificates can no longer be redeemed for the same amount of metal year after year.
Taxing wealth, property, wage income, or just plain existence has always sapped productivity like few other things.
It's foolish to try and tax "wealth" when you should instead be taxing the creation of wealth as it's in progress and nothing else. When actual ongoing business operations are going forward is the only time anybody can truly afford to pay any significant tax at all. Even if they are billionaires, and I say this as someone at the complete opposite end of the spectrum.
Ordinary wage income doesn't even make sense to tax whatsoever when you want max productivity, unless income is excessive enough to reach so far above average that greater capitalist profits can be earned on the surplus. Then maybe more than just those gains should be taxed.
https://www.ballardspahr.com/insights/alerts-and-articles/20...
It's incomplete, it doesn't list the gold tax.
They're also applying a tax to monetized bullion. That's more more like taxing currency exchanges and it's a bit weird since currency exchanges are normally taxed on appreciation.
If you were to turn that bullion into an actual product like jewelry, then it would be taxed.
When a firm with tank capacity takes delivery of an oil contract they secured via the CBRE, do they pay sales tax on that? No, because it’s intended for resale.
Unmonetized gold bullion is similarly generally intended for resale. Generally no one is “consuming” gold bullion.
"Monetized" gold has only existed for 50 years since gold futures started being offered in 1972. But the real "retail era" of "gold but only on paper" started just ~20 years ago with gold ETF's in 2003 (Australia) and 2004 (USA). So in just 20 years, we're now arguing that the norm from the past 3,000 years of gold trade is completely invalidated.
That said, you're not completely out of line with the views of the USA federal government. Gold has fascinating history of regulation. There was the 1933 total ban on private ownership when U.S. citizens were given until May 1, 1933, to surrender all gold coins and bullion. That lasted until 1974. Or that gold bullion is not subject to FinCEN Form 105 (currency) but rather CBP Form 6059B (goods).
The question I'm asking is why it's unreasonable that bullion that we've agreed isn't currency isn't being treated differently than these other things?
Bullion isn't a finished consumer product, it's the packaging format for the raw material.
Sales tax applies to finished consumer products. The intermediary stages are traditionally exempt, i.e. the person who buys bullion in order to make silver forks doesn't pay sales tax, the person who buys the fork does.
It's at least a distinction though, unlike the other arguments.
I mean, it's not a coincidence. For example, the US government has laws against using gold as currency, and they take those laws seriously and enforce them with vigor. They don't want dollars to suffer the competition.
Given the laws, it is necessarily the case, by definition, that gold is not currency.
I don't think that's true, or I can't find any evidence of it. If you want to buy a car and the seller agrees to accept 50 gold coins instead of $100,000 cash, that is perfectly legal. Hell, the US makes currency out of pure gold that are currency at face values of $5-50 (but the gold in the coins is worth 100x more than the face value).
Are you talking about the Gold Reserve Act of 1934 and Executive Order 6102? That banned private ownership of gold and demanded that citizens turn in their gold. But it was lifted in 1974.
You're free to barter in general. 50 gold coins, though, would probably be illegal even though 50 marble statues is fine.
https://www.law.cornell.edu/uscode/text/18/486
Using gold (or any metal) as currency ["current money"] is specifically illegal if the metal is coined.
You'd need to establish that it never crossed the seller's mind that he might later exchange those coins for something else. As an isolated incident, you'll have a fairly strong defense. If there's been another transaction in gold coins in your area recently enough that either of you might have known about it, you won't.
This is nonsense. If you'd like, you can absolutely sell your house for gold bullion. (Or Japanese yen or bails of peanuts.)
There is a reason the coins have the emperor's face on them. They are what he will accept as payment for the taxes he requests, and in assessing taxes according to his power, he dictates their value by fiat.
That's the fantasy, not the reality.
> The metal in the coin makes it expensive to counterfeit said coin, with punishment by death doing the rest of the disincentive.
What actually happens is the government declares a dollar value for the coin, and then alloys the gold with cheaper metals. This results in inflation. The usual content of counterfeit gold coins is less than the gold in the government issue, which is where the death threat comes in.
Only one counterfeiter ever put more gold in the coin than the government, that was Baraha. The government got mad at him because a Baraha sovereign was worth more than the government issue.
> he dictates their value by fiat
Governments always try that, and it never works. Governments are always alloying the precious metal with cheaper metal, but nobody is fooled, and the result is inflation.
Why do you think the government no longer issues gold coins? why there's no silver in a dime anymore?
Inflation.
Because it became self evident in the 1800s and first half of the 20th century that a commodity backed currently is not a good idea in any non static economy with a reasonably stable government?
Deflation and constant boom and bust cycles (something like the 2008 crisis would have been pretty mild back in the gold standard days) are somewhat of a drag on economic productivity.
In a fiat currency system there is no meaningful constraint on the supply of money. We’re experiencing the effects of that feature of the fiat system currently. Tying the supply of money to a rare commodity like gold may create other problems, but it completely solves the issue of currency devaluation.
For the record, the world was on the gold standard when the agricultural and industrial revolutions occurred. It’s not at all obvious to me that the gold standard prevents productivity growth.
History has plenty of examples of governments debasing their coinage and resulting drops in those coins values.
It isn't.
There is a widespread belief that jewelry is a durable investment, that if you fall on hard times you will be able to sell the jewelry for an amount similar to what you paid for it, or more.
It's fair to say that many people have this idea in mind when they buy jewelry, and that it pushes up the price.
But it isn't true; if you resell your jewelry you're going to get basically nothing compared to what you paid, unless you like to wear gold chains. The resale value of new jewelry is more like the resale value of a new car.
If there was any significant demand to resell jewelry, everyone would know this. The fact that they don't is sufficient to demonstrate that they have no intention of actually reselling.
And for what it's worth, people buy things for different reasons. It's very common for Indians to explicitly value jewelry as a wealth store (among other reasons), to give one example.
Yes, of course. Didn't you see my aside?
>> unless you like to wear gold chains
But you can't buy jewelry for the price of the precious metal content. You get charged for the jewels too, and they have very limited resale value.
Jewelry is the single biggest usage of gold, worldwide. It makes for nearly half of all the gold's reserve and usage. Jewelry alone represent as much gold as all the gold held by central banks and hoarded by individuals (be it bars or coins). There's also some gold use by various industries but that gold is often lost.
So it's fair to say that jewelry does, indeed, push gold's price up.
But maybe I misunderstood your comment.
(1) Many people believe they can sell jewelry for something approximating the purchase price;
(2) This belief is false;
(3) But the false belief that the money they are spending is recoverable makes those people willing to pay more for jewelry, pushing up the price of jewelry compared to what it would be if people knew they couldn't resell it effectively.
This entirely depends on the type of jewellery and the premium you pay for it over the price of raw materials.
I know for a fact that there's quite a lot of jewelry that trades at a fairly tight spread around the price of weight in gold (10-20% between bid and ask). Losing 20% isn't getting "basically nothing"
Of course, if there's a brand name involved you're not really paying for just the gold content anymore so there the resale value sucks.
Huh? Gold bullion is an input to hundreds of industrial processes. If it weren't, why would gold have any value?
Now? Gold is a great conductor of electricity (of course silver is better) and some people still like wearing lots of flashy jewelry.
I have no earthly clue why people find it valuable to invest in other than it’s like bitcoin: it’s valuable because everyone else also thinks it’s valuable.
Never once have I read a quarterly progress report from the CEO of the element “gold” outlining profit strategies for the next year.
Unlike bitcoin there is a price “floor” because of its use in jewelry and industry. Even if no one hoarded it, it would still have some value.
One can argue that until they're blue, but it'd still be wrong. Gold is a commodity, and if you're buying it shell-packed at Costco you probably should be paying sales tax on it.
If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful.
Following the guidelines is the best solution of course :)
1. Geopolitics. Globalization is dying. See 3.
2. Debt. Countries refuse to tax or do austerity. The only thing left is to destroy their currency by printing away their debt.
3. Preparation for a new global war which requires massive spending.
4. Basel III which made gold tier one. Unallocated gold does not qualify as a tier 1 asset
We're actually paying a premium for risk-averseness in the very nature of Gold, an asset that produces no dividends other than holding its own intrinsic value.
This time the bullish-on-Gold news outlets are right: there are fundamentals driving the madness that is the Market.
Something about Japanese rice futures candlestick school of days past predicting sell-off after 8 to 10 sucessive record highs...
Summing it up, the volatility specially of Gold (Silver is a bubble may I remind you) doesn't discount the possibility of an overall upward trend of years for Gold and a respectable USD$4000 for the spot troy ounce does not seem crazy at all, as momentum builds for regime change in Iran.
It's a plain analysis. Trump may not TACO on this and after hell on Earth is unleashed, Gold will actually see action to unprecedented levels. Maybe. Maybe not, but USD$4000? I doubt very much it would break through that support level.
This is a mid term investment. Probably see $70 and a slow build to $200 a once in two years.
[1] https://www.jpmorganchase.com/institute/all-topics/financial...
[2] https://www.morningstar.com/funds/8-charts-us-fund-flows-202...
In general, over the long term most amateurs do better investing in real-estate rather than the stock market. This is a well proven fact true for over a century, and making it some sort of personal argument is bizarre behavior.
You can spend 30 seconds looking it up, or continue to shovel your BS. =3
Not telling the spouse is pretty bad though.
At least we can afford nice things again
Incidentally Warsh's father in law is billionaire Ronald Lauder who is trying to get Trump to capture Greenland. Sounds like father-in-law got him the role.
https://www.theguardian.com/us-news/2026/jan/15/ronald-laude...
How independent will he be? Who knows. But folks believe he is at least knowledgeable and competent. Which is not widely believed of all the president’s appointees.
Unless you have physical metal you are just gambling on a videogame playing against the dev studio.
Did the market consider Powell the cause of a weak dollar and not Trump? I thought Powell was what was standing between the dollar and complete recklessness.
/s
Looks like atleast for Silver, that gets completely thrown out of the window now for some time.
I also thought Gold was a safe haven but I checked and it seems that it lost (10%?)-ish as well.
I have some complex thoughts and reasonings but I really liked Gold as an idea but looks like it is vulnerable to volatility at times too.
I used to think that maybe banks can have gold itself and gold usually does or ~ equal to inflation itself rise and I mean theoretically net I think even this year it does definitely beat Inflation (I mean it grew double I guess in 1 year) but for banking concerns especially supposing someone got money this time and let's hypothetically assume they get into this gold bank, then its still volatile & they could've lost 10% and then tried to withdraw money and more short squeeze so the idea has a major flaw after this incident.
I wonder how swiss franc is doing. I looked at it and it looks like its doing fine (1% down but I do feel like that's really okay) given how Swiss franc (seeing another cnbc article or yahoo finance ig) grew what 13-14%
Although the problem with people holding swiss franc is that when I searched swiss franc I found this article (from CNBC itself) which actually shows how a strong swiss franc might be/is bad for swiss economy
https://www.cnbc.com/2026/01/28/swiss-franc-us-dollar-price-...
I do wonder, then what's the ideal solution of "safety"
I am scratching a lot of options now & I am either thinking US inflation protected assets or World Equity are the only two stable/(really valuable) because the whole essense of value behind gold/silver was its stability which especially for silver feels broken but gold isn't that far behind either.
Although atleast in my original context of banking, I later came to know about the concept of narrow banking and how there was a bank which actually wanted to invest in TIPS itself but that was blocked off by the feds for many reason.
I do feel like TIPS might protect inflation protection but they don't really protect the erosion of wealth because I feel like (I am not sure I can be wrong I usually am) but the pricing of houses and other assets are rising higher than inflation rises & inflation itself can vary depending (so housing rent inflation might be higher) & depending on your lifestyle. Maybe TIPS really wouldn't be able to help you to say.. save to get house or really have you give the ability for money to do what it actually does. To me the idea of inflation includes buying houses too so if say someone with some salary was able to buy a house 20 years ago then imo when I consider inflation protection or investing or anything in general, I expect that my wealth could be able to buy me things ~generally at a good amount & that's the point of good investing to get good returns at understandable/ your own risk profile.
I guess now I am personally more inclined towards world index funds in general I guess as a form of real stability where value gains are still backed by real gains (Something which I feel is core philosophy of the bogle philosphy & the reason why people should invest in first place)
I may have gotten a bit off topic here but coming on the point again here about Silver.
Would this be considered as (expected?) or is it a black swan event especially considering the 30% fall off.
From the headline, it feels like a black swan event (especially when they compare it to 1980's) but I am curious to know what others think too. I do feel like these black swan events really shift how we think tho & we can have it in our better judgement for future ig imo.
Well technically speaking gold rose so much in terms of $ for so long so technically if we were on gold standard, the value of $ would've lost too (and become volatile too)
So I get that part I guess but still I do feel like swiss francs are a more safe haven while not being volatile but looks like switzerland really doesn't want its currency to de-inflate.
It's an interesting thing for sure to find out I guess. I mean long term, gold is definitely hedge against inflation but so do other investment options for the most part.
This universe doesn’t guarantee safety, but you can mitigate risk via a diversified portfolio.
I guess you are right but I don't think its the universe itself but rather the people's speculation which can technically be considered universe.
Personally, I really love diversified portfolio as well.
What I don't understand is why, when there appear to be signs of a supply shortage, market forces appear to want to drive the price down and cause any remaining inventory to flow towards China where there is a $30~/oz arbitrage to be made.