What's going on with silver?

What's going on with silver?

Hello again, Internet! It's been way too long since I've posted!

In case anybody wonders where I've been, the answer is that I've been learning, reading, and to a lesser extent actually making some transactions in precious metals and collectible coins, including going to a major coin show. More about that in another post, coming within a couple weeks.

So I haven't really had sufficient bandwidth to deal with work, learn more details about the collecting market, keep track of spot prices, look for good opportunities, and write for the blog all at the same time, along with regular activities of daily life.

A silver round; one troy ounce of .999 fine silver. Property of the author

Consider also that these have not been normal times in the precious metals market!!!

One year ago today was Feb. 15, 2025. On that day, gold was $2883 per troy oz, and silver was $32.15. Here's a source: https://goldprice.org/gold-price-today/2025-02-15.

• Sure, this site doesn't provide the bid/ask spread, but in my observation, this website usually quotes a price that's between the two. So it's good enough if you want to quote a single number.

As I write now, it is late on Sunday morning, Feb. 15, 2026. Of course, trading markets are closed on the weekend. But the current spot price, as of market close on Friday, is $5041.80 per oz of gold, and $77.41 for a troy ounce of silver.

And just think - that's actually down from the peaks in January! Gold climbed to a peak of $5608.35/ozt in late January (I believe that's an intraday high, not a closing price, if my recollection is correct), and silver hit a whopping $121.64/ozt! Both are currently down quite a bit from those elevated levels, obvserved only a couple weeks ago!

6-month returns on gold have been +47.6% and 6-month returns on silver have been +99.39%. 12-month returns have been 70.84% on gold and 135.93% on silver. These returns come even after the ~7% drop in gold and 32% drop in silver in recent weeks! Think that explains why my attention has been elsewhere recently?!

That's a lot of excitement for one person to handle - hence why I didn't have much bandwidth to write for the blog.

So what's going on with precious metals? Are the usual explanations (geopolitical chaos, supply shortage, AI-driven demand) sufficient? Remember, silver more than tripled within a year's time [that was before it dropped like a rock, of course], and gold doubled in the same timeframe [before the slight pullback to the price we see today]. Were speculators and institutional investors really under that much pressure? Were they that scared?

Maybe. But color me skeptical of the usual narrative.

https://www.msn.com/en-us/money/markets/chinas-silver-weapon-could-hit-investors-and-prices-hard/ar-AA1TFmDU

https://vongreyerz.gold/alasdair-macleod-how-silver-has-been-suppressed

Never thought I'd have reason to thank the People's Bank of China for anything. But if these links are to be believed, looks like I owe them a hearty 'thank you!'

Not that they'd ever admit to suppressing the price of silver. Or gold. Or any other commodity...

Should you have precious metals in your IRA?

 Should you have precious metals in your IRA?

You may have seen those commercials (like this one) advocating the use of a gold IRA or precious metals IRA. So...is it a good idea? Should you put your money in one?

The short answer? No. At least not more than a small portion of your money.

But why not?

Ah, now that is an interesting question!

1) Fees.

An important part of the Froogal Stoodent-approved investing method is to use low-fee options.

Storing your gold, silver, and platinum in an IRA is not a low-fee option. Some are better than others, but in every case, the company administering your IRA has to make money. That's not easy to do when they have to buy precious metals, pay for storage lockers and security, plus rent on the building, plus keep records of who owns what, and file reports with the government.

2) Performance.

Precious metals have a dismal performance record, even next to Treasury bonds. Stocks and REITs absolutely blow gold out of the water, in terms of performance over the past (pick a term - 20 years, 50 years, 100 years, or more).

3) Shenanigans.

You'll have to do some digging to make sure your claims are actually backed by physical gold. Otherwise, you're left holding worthless paper claims to a precious metal that doesn't actually exist.

At the risk of sounding like a conspiracy theorist, the paper claims on precious metals greatly exceed the actual amount of precious metal in the world: https://silverseek.com/article/paper-vs-physical-amazing-amount-leverage-silver-market

I'd guess that a significant amount of these paper claims come from commodities traders (not so much from unscrupulous providers of precious metal IRAs), but that's only a guess.

Just in case you think that link above seems a little sketchy (it strikes me that way, too, though I find the analysis believable), here are various other sources saying something similar: Link 1, Link 2, Link 3, Link 4

4) Inconvenience.

Imagine a situation comes where you'll have to use your gold, because some sort of disaster (or series of disasters) makes ordinary banking impractical.

In this disaster scenario - the only time you'll actually NEED that gold - how quickly do you think they'll send your gold after you call for a redemption? When, of course, everybody else is ALSO calling them for a redemption?

The custodian will be overwhelmed, at the very moment when you need a quick response.

5) Distributions.

Once you reach a certain age - as of 2023, it's age 73 - you will have to sell some of your holdings, whether you want to or not. Whether the price is up or down. [In fairness, this applies to any holding in a traditional IRA or 401(k), including stocks and mutual funds.]

It's called an RMD, or required minimum distribution, and it's a government mandate, so that they can finally start collecting those taxes you've been putting off during the past 40+ years.

6) Requirements.

You can't just hold any type of gold or other precious metal. No, the federal government specifies certain purity requirements. They also penalize you if you hold collectibles, such as coins, in your precious metals IRA, even if the coin meets the purity requirements!

Royalty-free image from https://pixabay.com/photos/gold-ingots-treasure-bullion-513062/

No, IF you want gold or other precious metal, you're probably better off having some physical coins or bars in your house, or in a safe-deposit box nearby. But, of course, each of those options comes with its own issues and challenges (and expenses).

What do I do? Me, personally?

Well, I've collected coins since I was in elementary school. Recently, I've been taking a small amount of money and buying older coins that interest me, as well as the occasional silver round or tenth-ounce gold coin. I keep the more valuable ones in a safe-deposit box.

But these purchases only amount to a very small portion of my net worth. Like, 0.4% of my net worth.

I think it's an interesting hobby, and also a way to preserve some purchasing power, in the event of some sort of economic collapse or hyperinflation. But the odds of those disasters are pretty small, so I only commit a relatively small amount of resources to the pursuit. Because, in the end, it's mainly a hobby.

In my own IRAs, I use index funds - low-cost stock, bond, and REIT funds. I, personally, do not have precious metals in my IRA. I prefer to have my precious metals within easy reach.

Don't believe some random blogger? That's okay, I don't blame you. Here's Investopedia's take on the matter: https://www.investopedia.com/articles/personal-finance/091814/analysis-should-you-get-gold-ira.asp

Investopedia has a list of some of the best custodians to consider, if you're still interested: https://www.investopedia.com/best-gold-ira-companies-5087720

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Want to learn more? Check out my book reviews, including Ray Dalio's Changing World Order: https://froogalstoodent.blogspot.com/2022/04/the-changing-world-order-froogal.html

Gold The Once and Future Money: A Froogal Stoodent review

 Gold: The Once and Future Money by Nathan Lewis

A Froogal Stoodent review

Seventh in a series of book reviews by The Froogal Stoodent

If you're interested, you can find this book at Amazon.

When I picked up Gold: The Once and Future Money, I thought it was going to be 400 pages on why gold is the only real form of money. *rolls eyes*

Instead, it was a 400-page macroeconomics textbook in disguise.

The Best-Performing Asset Classes

 The Best-Performing Asset Classes

If you’re like me, you’re wondering what the best investments are.

It’s easy to find a lot of opinion, but not a whole lot of hard facts.

Articles abound on websites like Forbes, CNBC, and even Morningstar—but they ended up confusing me. They compare only a couple asset classes, and they frequently refer to different timeframes. For example, they look at the past 10 years for the S&P 500, the past 7 years for value stocks, and the past 13 years for growth stocks.

How am I supposed to make sense of that gibberish? I’m not looking for a load of blather; I want facts! Comparable, unbiased, non-cherry-picked facts. Is that really so hard?

Apparently, it is!...

I’ve had to do a lot of research to find some reliable numbers that can be compared. I got a great start with Paul Merriman’s excellent website, especially this set of charts [PDF].

While Merriman’s data was very helpful, I wanted data on more asset classes than the ones provided on that set of charts. I want all the asset classes!

How else are you supposed to make an informed decision?...

Should You Invest In Bitcoin?

Should You Invest In Bitcoin?

I've spent a while reading about Bitcoin, blockchain, and the underlying philosophy of cryptocurrencies.

Everybody's got an opinion, so I might as well weigh in and hopefully provide some perspective!