March 2021
For many, spring is a time of anticipation. People, in general, tend to move around more as they shake off the natural hibernation patterns of winter. A recent report said that the TSA processed 1.5 million screenings last week at U.S. airports, the most since March of last year. One would expect that due to COVID lockdowns, there is a great deal of pent-up energy waiting to be released as people break free and begin to live again.
But what does that mean going forward? As cliche as the term "new normal" has become, the reality is, the world is not simply going to return to the pre-pandemic way of doing business. That means the investment landscape is shifting dramatically. At this time, we don't believe anyone can have a solid read on what the new landscape is going to look like once the shifting settles. There are too many variables at play, not the least of which is the global geopolitical environment.
As the world continues through its early stages of major transition, we believe that the emerging cross currents in the global markets will provide a tremendous opportunity for gold and silver to play their historic roles as safe haven and insurance assets. Still, we must understand that no market is immune from volatility, and that will include the precious metals markets.
In the meantime, get out and enjoy some sunshine and spring temps. The world moves on and we will adapt to it!
All the best,
The OWNx Team
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In 2Q21 the OWNx app will be released for both iPhone and Android!
X-cerpt
Here we are, a quarter of the way through 2021. Uncertainty in markets continues to affect so many aspects of the financial world and the precious metals are not immune. The fundamental reasons to own these assets have not changed and our goal has always been to provide a place where you can lock in and accumulate gold, silver, platinum, and palladium…either automatically or over time or with a click.
As I look at the images of the coming OWNx iPhone and Android apps (above), it’s very easy for my first thought to be much like many of you… "It’s about time!" When I consider it more deeply though, it is a testament to the level of patience our team has had for more than a decade. We are in this for the long haul. So as we launch this app and make continual improvements to it, know that we will always make decisions for this company and its clients in a calculated and patient manner.
Here’s to a great remainder of 2021! Please let us know if there is anything we can do to serve you better.
Josh McCleary
Co-Founder and COO
Gold and Silver
What Do the Charts Say?
Well, here we are again at another important level on the gold and silver charts. The price action over the last two months has not been great but is consistent with a major pause in the middle of a multi-year advance. We've said it before, and we'll say it again: because of unprecedented developments in the geopolitical world and global economy, this bull market in the metals is going to be more unpredictable and volatile than those in the recent past. We have certainly seen that play out over the last couple of months.
We expected the metals to take a pause after a sharp move upward last summer. The mover from mid-July to mid-August 2020 was unsustainable and that energy had to be worked off. At that time there was a great deal of fear surrounding the longevity and impact of global economic lockdowns. Today, we have a different story. There are COVID vaccines, global cases are rapidly falling, and there is some optimism over economic prospects going into the second half of 2021.
Yet there is another threat lurking that, at this time, appears is being ignored--or at least downplayed. That is price inflation. The price of everything from gasoline to lumber to food to housing is rising rapidly at double-digit annual rates. While at times in the past decade, the forces contributing to inflation were viewed as "transitory" (Fed speak for temporary), this time feels very different. Trillions in global money printing and long-term supply chain disruptions are combining in what could be a long and sustained period of inflation ahead of us.
So why are the metals falling in the face of these pressures? That is a good question, and in this mixed-up financial world, there is no clear or easy answer. While markets can act irrationally for longer than we think possible, they eventually sort out the truth and act accordingly. When the turn back upward in metals prices will come is yet to be seen. However, we do not see gold and silver losing their historical role as insurance against financial system instability and as an inflation hedge. Rather, what transpires over the next few months as they regain their footing could be a very good long-term buying opportunity.
There isn't much to say about the charts, as the picture is pretty clear. Both gold and silver are closing the month of March and the first quarter at or near key support levels. Gold is approaching both the bottom of its now seven-month correction channel and the key support level in the $1,670 range. Will this be where the correction ends, or will it extend into the summer? Either way, it looks like a bounce in the price over the next month or so is likely. Silver, meanwhile, is still within its sideways trading range and is approaching major support in the $22-23 range. If it should reach the bottom of the channel, it could be a very good long-term entry point.
The charts in the May newsletter will tell us a great deal about how much longer this correction/consolidation phase is going to last. The best long-term strategy during times like this is dollar-cost-averaging into the market with regular purchases over a fixed time-frame, or if you are more of a trader, buying obvious dips at key chart levels. Either way, you are enhancing your financial insurance portfolio at a time in history where such insurance seems pretty important.
A Shifting Investment Landscape
Since the first of the year, there has been a rather significant shift in sentiment in most major markets. Oil and energy prices have skyrocketed. The housing market is robust nationwide. Interest rates are rising. The U.S. dollar is falling. Trillions of deficit spending continues unabated with more to come. The Fed has said they will remain on the sidelines and accommodative in the face of rising inflation. Meanwhile, gold and silver prices have softened.
Indeed, we are in strange times. Following are the opinions of a few newsletter writers who recognize the times we are in.
Inflation is Broken
"So much of our broken economy is the result of broken monetary policy, resulting from broken data. This affects everything." John Mauldin provides us with insight in his weekly series entitled, "Thoughts from the Front Line."
Why the Silver Bull Run is Inevitable
"In the late 1990s, on the cusp of the turn of the millennium, legendary investor Warren Buffet made a big move: he purchased roughly 130 million troy ounces of silver — primarily bought off the COMEX at a price around $5 an ounce... The media covered this move, of course. Forbes Magazine did a focus piece on the silver market, featuring a chart of the inflation-adjusted price of silver along the years... Buffet was buying silver at its lowest price in recorded history. With this, people began to wake up to the undervalued safe haven. Moreover, if this chart was replicated (inflation adjusted) today, you would see that silver is now nearly as cheap as it was when Buffet bought it." David Morgan has been a friend of OWNx since the platform was founded in 2009. He gives his thoughts on the silver market, from "The Morgan Report."
The Darnold Dilemma
"I think Jay Powell and the Fed have locked themselves into a two to three year commitment to treating inflationary pressures as 'transitory', just like an NFL GM and organization lock themselves into supporting a 'franchise' quarterback they draft in the first round. Once selected, and so long as they believe it is possible that their draft pick is, in fact, a franchise quarterback, it is impossible for the organization to express ANY doubts about the wisdom of the pick. Why? Because once doubt is expressed, the quarterback is finished with that organization... This is exactly where the Fed is with their stance on inflation. " Ben Hunt examines the potential corner the Feds have painted themselves into on his blog, "The Epsilon Theory."
The OWNx office will be closed on May 31st for Memorial Day.
(but our platform never closes)