Why Gold & Silver Won’t Crash Along With The Stock Markets

When it comes to what happens during the next major market correction-crash, we can count on that “this time will be different” for the gold and silver prices.  While many precious metals investors believe that gold and silver will crash along with the broader markets, the charts and data suggest the opposite.

In my newest video, Why Gold & Silver Won’t Crash Along With The Stock Markets, I provide charts and updated information on the break-even analysis of the primary gold and silver mining industry.  According to my research, the gold market price has not fallen below the production cost of the top gold miners in the past two decades.

Some analysts, such as Harry Dent, believe the gold price will fall to $700 this year.  Dent reconfirmed his forecast in the following article, Why We Are Heading Toward $700 Gold In 2018:

Investors are fleeing to gold in a desperate attempt to weather the recent market volatility… but is this long time “safe-haven” actually poised to collapse wiping out trillions of dollars of wealth in the process?

While many economists will argue that gold is not in a bubble… and insist it will soar to $2,000, $5,000 and even $10,000, my research has said otherwise. I’ve never been more certain of anything in over 30 years of economic forecasting.

Market volatility, worries over the Europe Central Bank, negative interest rates, and China are among a laundry list of events that are driving panicked masses to buy the yellow metal. But this is only inflating the gold bubble that is poised to pop at any moment.

Mr. Dent states the due to the current market volatility, worries over Central banks, negative interest rates, and fears about China’s massive credit bubble are driving investors into gold.  BUT, according to Dent, this gold bubble is about to POP.

I find Dent’s analysis that gold is in a bubble quite interesting because if something were in a bubble, then it would have to be at least 50-100% overvalued.  If we look at the data on gold and silver, they are no were near BUBBLE TERRITORY.

Shame on you Harry for putting out bogus analysis.

Unfortunately, Harry Dent has no clue about Energy, the Falling EROI or the cost of production when he applies his forecasts.  Dent, like most in his industry, produce superficial, incomplete and faulty analysis because they are forecasting in a vacuum.  Now, when I state that they are forecasting in a vacuum, that means they are providing analysis by excluding the most crucial variable… ENERGY.

In my video below, I include the cost of production analysis of the primary gold and silver mining industry.  If Harry Dent took the time to look at one of the charts in this video, he would see that the gold price never fell below the average cost of production since 2000, and I would suggest for the majority of the 20th century.

In the video, I include two tables on the top primary gold and silver miners cost of production.  Below is the chart for the top primary silver miners 2017 Financials:

This table shows that the average cost of production for 2017 in this group of primary silver miners was $16.18.  The current silver price is $16.48.  Now, when the price of silver shot up to $50 in 2011, the average cost of production for the primary silver miners was between $25-$27.  So, if Dent were to say that silver was in a bubble in 2011, then maybe he may have some credibility if we were to remove all other negative financial factors such as the massive debt, derivatives, and leverage in the markets.

Regardless, if we were to exclude all the highly leveraged Stocks, Bonds, and Real Estate values (from the massive debt & derivatives), then it is correct to suggest that silver was in a bubble in 2011.  But, to say that gold and silver are in a bubble today when the current market prices are close to the average cost of production, is pure LUNACY.

To understand my full analysis on why I don’t see the gold and silver prices crashing along with the broader markets, please watch the video above.  Also, if you find the video informative, please consider sharing it with those who may also find it interesting.

Lastly, due to the significant drop-off of interest in the precious metals and alt-media message over the past year, advertising revenues on this website have fallen considerably.  For that reason, I offered Paypal and Patreon memberships on this website to support the SRSrocco Report.  The articles and videos take a lot of time to put together, and if you would like to support the SRSrocco Report site, please consider becoming a member via Paypal or Patreon.

I want to thank everyone who continues to support the SRSrocco Report site, and I look forward to writing and publishing more videos on how energy will impact everything going forward.  Unfortunately, it will affect most assets negatively, while gold and silver will be few of the best stores of wealth to own.

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41 Comments on "Why Gold & Silver Won’t Crash Along With The Stock Markets"

  1. Gold and Silver cannot crash simply because they are being managed to remain just above the cost of mining by TPTB. Since “they” have unlimited fiat “they” can easily do this as long as physical metal is being delivered at the highly manipulated paper price. I keep my physical and stack more when I can and in the meantime make fiat on the crypto sector. EOS is one example; I bought it at $ 1.90 and after the “crypto crash” is trading at $ 20.00. TPTB have instigated a waiting game that few have the resources to play. Make fiat in any other asset class you can, hold your physical PM position and survive to fight another day. I’m only here to try to help the average PM investor survive and not be destroyed by the criminal manipulation like I almost was. Fortunately I figured this out before it was too late.

  2. I agree with GLP.

    This is a waiting game, folks, just the nature of the beast. If you can’t wait, buy some wheat instead. Everyone has to eat sooner or later.

    I believe in the idea of silver going into stronger and stronger hands. Don’t get discouraged. Nothing goes up in a straight line. Just use this God-given opportunity to keep accumulating. It’s a once-in-a-lifetime opportunity.

    Two weeks ago silver went up 40 cents overnight. Yes, it was slapped back down, but a clear sign of things to come. The silver horses are chomping at the bit.

    Even if silver doesn’t go to the moon, it will still go up with inflation in the long run and your wealth will be preserved. Inflation, sovereign debt, and currency devaluation are inevitable. This crazy train is picking up speed and momentum every day. The bridge is out and just around the bend.

    Silver will be the beneficiary.

  3. Antal Fekete has his views on this Steve. Fekete talks about backwardation as the only real indicator left for precious metals, because the price is manipulated.

    Any thoughts about this?

    • Fekete is one of biggest clown of the pack (like sandeep jaitly and keith weiner) He came from mathematics, he understands nada to capitalism…

  4. “In 2013, Dent predicted the market would crash again in the Summer of 2013 and would take a further year and a half to recover”

    “In 2014, while promoting his book The Demographic Cliff in Australia, he predicted a major Australian housing market correction beginning in 2014”

    Source: https://en.wikipedia.org/wiki/Harry_Dent

    • The “Harward trained economist”,as he never forgets to qualify himself, has been sure about 700 usd gold ( and even lower ) several times in last years… since 2014, maybe? Try again, Harry…

  5. I just got done reading Mr. Dent’s article and in it he said this: ‘Market volatility, the ECB, worries over negative interest rates are among the laundry list of events that are driving the PANICKED MASSES to buy the yellow metal.’

    I don’t know what Harry Dent has been drinking, but let’s get real here. If the PANICKED MASSES were really buying GOLD, the price of physical gold would be through the frigging roof and a lot more difficult to obtain. On top of that, my shares in major gold mining companies would be far, far higher than they are. Harry Dent, at least in this specific case, sounds more like a used car salesman than a tried and true precious metals analyst. Let me be very succinct here. Fiat is fiat! The equity markets are way overvalued and way over-leveraged. Profit margin is at historical highs and the bond market is looking more and more like Swiss cheese. As a result, THERE IS NO WAY I’M SELLING MY PHYSICAL GOLD, NOT RIGHT NOW I’M NOT!!!

    “Gold is money, everything else is credit!” ~ JP MORGAN, 1907

  6. Correction to my previous post. I said this: “Profit margin is at historical highs…” What I meant to say was that margin debt is at historical highs.”

  7. It’s unfortunate to see so many people asleep to the dangers of global debt, climate change, and peak energy. We know where this is going yet humanity continues to ignore our global problems. All our leaders want to do is kick the can down the road and make a buck while they’re at it. No real effort to find solutions. It’s unfortunate because I see the world heading for a Darwinian culling. We’ve all heard about lost civilizations, Based on the news and circumstances the world finds itself in, I think I’ve got a pretty good idea how it happens.

  8. I hope silver is in a bubble at $16. That way if it bust’s I can buy more silver for my paper bucks. If silver hit’s about 7-8 bucks, I can buy twice as much.
    Seriously, PM also had a delayed price reaction back in the 2008 crises. Gold and silver did not spike overnight hugely, but had a very healthy ascent into 2011, before the FED clammed down on metals.

    • For 10 years silver has been over 17, your hope for 7 silver is naive. That will never happen again. The long term costs are over 25.

  9. Perhaps. But that doesn’t mean they will go to the moon, either. You people are stuck in either/or thinking. Which prevented you from seeing the actual outcome. Mainly, they just meander along at the cost of production, controlled by the banks.

    Just like with black people. To you, they are either criminals, or magical super blacks that are going to entertain us and build nuclear fusion reactors. You refuse to see them as just another group of people with lives and problems of their own.

    Gold and silver are metal. That’s all. They have very little to do with anything other than some industrial applications. Nobody acquires them in large amounts as a store of wealth. If you believed that story, you were the deluded one, not me.

    • DisappearingCulture | April 30, 2018 at 5:44 am | Reply

      “Gold and silver are metal. That’s all. They have very little to do with anything other than some industrial applications. Nobody acquires them in large amounts as a store of wealth…”

      Another B.S. statement. They have been treasured as money throughout history, gold is still money/currency internationally, and several countries and central banks are acquiring gold…as a store of wealth. Russia is stockpiling silver also. China and India might be stockpiling silver also.

  10. Gann financials is now predicting a crash of gold in the next few months as current pattern looks like the 1992/1998 era. The repeated failure to break the 1360/1400 frontier and the complete lack of energy seems to open the way for the nightmare jim rogers scenario. That could perfectly fit with a sudden and brutal fall in the stock markets for instance and maybe some high yield bond markets (and emerging countries also). It stinks…

    • DisappearingCulture | April 30, 2018 at 5:52 am | Reply

      “Gann financials is now predicting a crash of gold in the next few months….”
      As GLP posts above “Gold and Silver cannot crash simply because they are being managed to remain just above the cost of mining by TPTB.”

      People wake up! The COMEX price on gold may drop briefly with a large stock market selloff, but since the COMEX price is the physical metal benchmark price, it won’t stay down long. Physical metal will not sell below raw cost to mine & refine to .999 unless there is a pre-existing contract that has to be honored.
      Wake up people. G & S will not sell below their mining & refining cost.

      • I did not write it will stay years or even quarters, but a break into the 850/950 USD for a few months is now the main probable scenario imo. Afer there will be a V sharp recovery. In fact I think this gold fall could happen side by side with a huge stocks rise rather like 3000/4000 for the SP500 followed by a quite big correction in stocks and HY credit markets thereafter which will allow gold to make its comeback.

  11. It’s only metal guy’s. For it to have value you have to convert it to a debt based currency because debt drives the system. If you don’t believe me than try this.

    The next time you fill the tank in your car go to the cash register ( notice the expression cash) and try to pay for it with equivalent gold. 100% chance they won’t accept it. Why? First of all they can’t value it so you’ll never convince them it is the same value as the gas you may presently have stollen. Secondly they can’t verify it meaning they have no idea if it’s painted lead or 24k or 18k. Now you can insist that this speck of gold is absolutely worth the value of the gas you pumped and drive away, and you’ll likely be arrested because the owner doesn’t care. The owner needs dollars to pay for the gas. If you purchase in dollars you have to pay in dollars. If you borrow in yuan you have to pay in yuan. So the only value PMs have are through brokers and agents where is the security in that?

    Now to this thought of there is no way the price can fall below production so there is no bubble. What? Oil is presently below cost of production which needs to be $120.00 a barrel but everyone would call that a bubble wouldn’t they. PMs are trading just above the cost of production because the market is absorbing them at that price. How much of that market is speculative hoarding? No matter the investment the only thing that matters is liquidity. Once people have to unwind their investments no matter what they are they will be limited to demand. Considering in the US the top employer is Walmart and millennials are underwater with debt living with mom and dad who if anyone is going to buy all this accumulated treasure? Who? The Russians? So all it takes is a sudden dump on the market with no buyers and the value will crash.

    In addition to this the mining of PMs sets a floor not a ceiling when the mining stops and it will does this mean that the value is now infinite? The same is true with Bitcoin.

    • Well, I am not sure if people, who lost their money due to whatsoever debasement of their currency would agree with you. Just in the last 100 years there were so many cases when due to war, crime, large public deficits, revolutions etc the “cash” lost value (in many cases to zero).. So good luck with your cash then.

  12. How many million people from the working class families in Africa are waiting for the gold price below 1,000 FRN ? How many million peasants and hawkers in Asia have been living through some sleepless years waiting for the 700 FRN gold ? How would Harry Dent explain this ongoing misery ? Could he someday stand in front of a mirror and tell the truth about his gold price prediction ?

    • The doomsayers just repeat their scary scenarios for years. When a crisis hits they brag that they predicted it. Steve always claimed that the markets would crash in several years. This year he started talking about an imminent deep market correction which will benefit PMs. In this way Steve palaced himself in a difficult situation because it will be possible to verify his claims lets say this year. Other “analysts” are more cautious not providing a timeframe.

    • Indian people can buy 1000 additional tons of gold but it has NO influence on the price : zero, nada, zilch. Prices is determined by Comex major commercials. Period. And this will most probably continue for many years.
      The only option for gold longs is that commercials would decide that’s appropriate and good for them with a rising price.

  13. Exactly this is what steve not understand.His numbers how much tons one state had been bought are completely irrelevant.

    Only when the supply of physial silver is no longer available things change.Seems he doesn’t understand this.Half of the production is not necessary.It’s investment the Fed, can manipulate like they want.

    • silverfreaky,

      Unfortunately, your comment lacks insight, logic or even common sense. You tend to forget, or should I put it another way… you tend to OMIT the most important factor that determines the PRICE of most goods, services, commodities, and metals… ENERGY. Without ENERGY, there is no market. Whether that is human, animal or fossil fuel energy.

      We can always tell when the precious metals market is at a near bottom when more comments are negative than positive. So, I welcome the negative comments because it’s an IMPORTANT INDICATOR that INSANITY has completely taken over the market.

      To see Amazon’s Market Cap go up $50 billion in trading after it announced its Q1 2018 results, which they reported a 41% decline in FREE CASH FLOW, just shows how completely INSANE, STUPID and IMMATURE the market has become.

      So, the more negative comments I see on my blog about Gold and Silver, the more I realize just how SERIOUSLY INEPT INDIVIDUALS have become.

      steve

      • Steve

        Maybe this is a good space to post a link, that graphically shows what price the Shanghai Gold Exchange is willing to pay for physical gold and silver, over and above what the “Western” spot price is in real time.

        http://www.didthesystemcollapse.com

      • Don’t let your detractors get the best of you. If they are so smart they can put their money where their mouth is and short PM’s.

        • Centrist,

          Agreed. Normally I try to refrain from replying to SUPERFICIAL, ILLOGICAL and DELUSIONAL comments. But, sometimes I do it to clarify an issue. But, I would imagine those who pray to the glorious CENTRAL BANK ALTAR of money printing, debt and derivatives need to get their head examined.

          I hate to be so blunt, but there you have it.

          steve

          • Central banks have performed great work as they succeed that nothing has chnaged for 50 years (as WWIII would have been necessary in the seventies). Great job indeed !

          • All caps = tantrum font

            The problem when you lash out at your detractors with name calling and all caps is that it makes you look unstable. I have recently watched a few of your videos and to my surprise (in contrast to some of your web postings)you were a very nice mild-mannered person. Try to be that person when you edit your responses, then hit the post/reply button.

          • Centrist,

            You are free to your opinion of my writing style, but I like to do the CAPS and name calling once in a while when the Poor unworthy slob deserves it. This is not a democracy, it’s my website that I run and pay all the bills.

            So, while I am very easy going, even when I am replying to a few that disagree with me or the occasional NITWIT or GADFLY, I don’t plan on changing my style.

            Actually, most of my followers let me know that I am too easy going with some of these individuals as I do allow a lot to roll off my back.

            Anyhow… you won’t find a CRYING CLOSET anywhere near my website: https://www.usatoday.com/story/news/nation-now/2018/04/26/cry-closet-utah-university-library/553082002/

            Unfortunately, a lot of the world today is becoming truly pathetic.

            steve

          • lol@ the crying closet.

            I do enjoy your website and your videos and sincerely want you to succeed. Sooner or later stackers will be rewarded.

            Please keep up the great work!

  14. I believe Steve is right on target with his analysis. I am hoping PMs drop some more and I will back up the truck and buy all I can this one last time because I think this could possibly be the last low ( if it does fall ) we will see for a very long time.
    I am not bad mouthing Harry Dent when I say : If he listens and acts on his own analysis and does not purchase PM’s he will end up having a bunch of hurt heaped on him just like most of Americans and he should know better.
    I have been talking to my adult daughter whom is visiting me for a few days and I have been saying buy PM’s while you can at this low price. I think she is finally listening.
    I hope more people take this advice while they can. Get it done folks because bad times are in site. Good Luck

  15. JT Roberts,

    Its’ absurd to make a claim that the cost of production of “oil”
    is $120.00. Contrary to most stuff I’ve read, if memory serves. Please substantiate this.

    Steve, seems like addressing these kinds of claims would be more effective then continually answering silverfreak, etc. Like a higher eroi for you???

    Yet you seldom do so. Now wonder why that could be?

    • Frank,

      LOL… yeah, I should follow my own advice on EROI of replying to NONSENSE. By the way, the Marginal Cost of production for adding New Oil Projects is now $120.

      Thanks,

      steve

    • Frank

      The cost isn’t the drill rig. It’s much more complicated. The easy stuff is gone so oil needs to reflect the cost of new development not legacy.

  16. The cost of energy increases.That’s true.But this have nothing to do with the overproduction.Again, half of the procution is not necessary for the industry.
    The FED don’t want PM back as money.Each year about 10000 tons of new silver as investment.

    What do you think what happens when the price spikes again 10 dollars more.The pour silver souls want to get rid of silver as soon as possible.
    The next 10 year waiting time for a spike, most of them would not experience.

    The only way to see some light at the end of the tunnel for silver is a new currency.
    But is this wishful?
    I think it’s in no interest to see high silver prices.Even the chinese don’t want that.
    The reason is simple.When USA fails finacially the whole world falls in a big depression.

    The german aussenminister altmeyer was creeking in Trumps…
    It’s not so easy to eliminate the green poison.
    A long time ago an american financial politician spoke to waigel(german minister):” The greenback is our currency and your problem”.And totay the dependence is much higher.

  17. Russia made it through a financial crisis by requiring everyone to show up for work( whether your employer was able to pay you or not) or face jail time. In exchange the govt issued coupons for food and prevented evictions from residences. This kept society afloat until things were resolved and a new currency was issued.
    A number of banks went under and people had to “start over” but they made it through without mass starvation.I don’t have all the details of what all happened but, I got this info second hand years ago.

  18. silverfreaky | May 1, 2018 at 12:57 am | Reply

    http://didthesystemcollapse.com/

    Difference 1.64$.At 2 $ something maybe changes?If we only had numbers how much of this physical silver goes to the east.Did anybody has news about this?

  19. Thanks Steve! Also, people should not forget to take a look at the copper report provided by Marin Katusa via macrovoices.com Great insight, copper mines, supply, demand, new mines, copper needed per ev, even energy used by mining, and much more. If you go through the report, to me it looks impossible to get all the energy /copper needed for the EV Revolution.
    https://www.macrovoices.com/396-marin-katusa-copper-uranium-the-ev-revolution

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