Precious metals report

[which_chick]

Gold in 1970: 36.02 (I was born in 1970, is why we are starting there. My world did not exist before I was born.)

Gold in 2025: 4695.80 a few minutes ago

Silver in April of 1970: 1.90

Silver in 2025: 95.33 a few minutes ago

Prices are higher for both than they were in 1970, for sure. Are they the "same amount" higher for both gold and silver? No.

Gold is about 130 times higher now than it was in 1970. Silver is only about 50 times higher than it was in 1970.

If gold had increased at the "silver" increase rate, it'd be about $1800 an ounce. (This seems "legit" as a price for gold.)

If silver had increased at the "gold" increase rate, it'd be about $247 an ounce. (This seems "excessively high" for a price for silver.)

So, silver and gold are not moving in lock step. Historically, silver to gold has ranged between 50:1 and 80:1 (In that 50 ounces of silver = 1 ounce gold, or 80 ounces of silver = 1 ounce of gold). The current ratio is just under 50:1 but silver's been on a tear lately. The price of silver has gone up like a rocket since about August 2025.

Silver was $37 an ounce in August. Compared to the gold price at that time -- 3364 -- silver was running at 90:1 in August which suggests undervalued silver relative to gold. Like, if you believed that the gold price was "reasonable", in August, then you might have purchased some silver at that point because with silver at $37 an ounce and gold at $3364 an ounce, silver is a deal, relative to gold prices.

But it's easy to see that shit in hindsight.

In January of 2025, gold was running $2700 an ounce, which I thought was damned high at the time. A year later, that price looks cheap because today gold is $4695 an ounce. Lol. Insane. Analysts are predicting $5000 an ounce this year but I am not going out and buying any gold at these prices. Oof. Too rich for my blood.

Why is the price higher? Is it inflation? Nope. While there has been inflation over the last year, it's not been *that* damn much.

Gold is up because it's a thing that people buy when they are worried. It's a hedge, a store of value for when the markets are questionable and people lose faith in the country, the currency, the government. Analysts (who don't know much more than we do) blame rising geopolitical tensions and softer monetary policy for the push. They might be on to something, there. Countries are buying up gold through their central banks because they're uncertain about the dollar.

Comments

[spiffikins]

My friend's dad, in his later years, had a touch of paranoia - he ended up spending a LOT of money buying and hoarding gold. He overpaid for some of it - but a decade later, it's still worth MUCH more than he paid for it - and my friend has been selling it slowly to help pay expenses, rather than cashing in retirement funds when the market was low, and taking a loss.

The numbers are still crazy to me though!

[ranunculus]

I haven't invested in gold or silver but I am fairly certain we are on the edge of a financial meltdown. I was 100% correct with the Tech crash in 2000. We could clearly see it coming and insisted that we did NOT want a fancy mortgage with a balloon payment plan. Nope, fixed 30 year was our choice against the advice of all the financial people who were trying to "advise" us. I'm seeing the same kind of signals now, perhaps worse because the political climate isn't one that I trust to deal well with that kind of challenge. I'm very happy that the Fed Chairman is holding the line and not letting political pressure sway him.
I have a tiny portfolio of investments left to me by my mother. I've been very happy with the way my broker has invested them - but he strongly feels that the economy is fine. On my list of things to do is to tell him to transition my money into funds that can do ok, or even well in a recession. Should have done it a couple of months ago.

[spiffikins]

What kind of funds will continue to do well in a recession? I'm in index funds, but if the whole market crashes, then the index funds will crash too!

[ranunculus]

That is a question for a professional. I'm not. But I have been told that there are all kinds of investments that are "safer" and some that will even make money in a recessionary environment.

[ranunculus]

When I was young I used to haul an old portable radio out to fix fences. One of the only programs I regularly listened to (because it was the only thing I could tune into) was a financial program. It gave me the basics of how finance worked. That was about 40 years ago. Things have changed a lot since then and I'm not up with all the most recent offerings. That is why I have a financial person to actually do the investing.