3 Reasons Why 2017 Could Be Good For The Price of Gold and Silver

OWNx Team Blog, Money & Financial Technology

This spring we sent out an alert to our clients stating that we believed the price of gold had finally broken out of a four-year decline. Since then, gold has made a confirming move to over $1,370 per ounce. The recent drop to the $1,250 level may leave some wondering if this move was a false move or just a healthy pullback.

When bull markets turn, they rarely do so in dramatic fashion. The painful bear market is still fresh in people’s minds, thus initially the market climbs what long time market participants call a “wall of worry.” Where does the price go from here between now and the beginning of 2017?

The answer is, nobody knows for certain. One can draw on history to make a case for a gold to pull all the way back and retest the $1,050 breakout level. Others can make a case for the immediate resumption of the upward trend. We take no sides in these predictions. Many a gold dealer has used hype and cheer leading to drive short term sales. That’s just not our style.

Rather, we like to focus on why our clients own gold and silver in the first place and how to best use our technology platform to serve them as they seek to achieve their goals in 2017 and beyond. And as we turn the corner on 2016, there are several factors that we believe support the resumption of a longer term bull market in gold and silver.Read More

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Three Reasons to Consider Automatic Purchases of Gold and Silver Bullion

OWNx Team Money & Financial Technology

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Owning gold and silver creates different images in peoples minds. Some of our clients are active swing traders who thrive on the swings in the spot price of gold and silver. To them, “volatility” is literally gold. They live in the world of Now, and to them we say – more power to you. For the vast majority of our clients however, their reasons to own gold and silver transcend short term trading profits. They are interested in the long-term (3-5 year+) benefits that gold and silver provide.

As it is, today we live in a world where long established trends are changing. And while gold and silver bullion shine such an environment, the path is rarely a straight line up. This is more so when today paper proxies for gold and silver (such as GLD stock) and an instantaneous access to information on global financial and geopolitical events can amplify short and even intermediate term price swings.

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The Alaskan Town that Still Pans for Gold Bullion

OWNx Team Gold & Silver Market, Retirement Planning Leave a Comment

The original residents of Chicken, Alaska, were a “ragtag bunch of gold prospectors.” The town is 40 miles west of the Canadian border and 90 miles from Eagle, Alaska. It has a population of 23 residents, except for when 16 of those residents leave in the winter and the population drops to just seven people. Between mid-October and mid-March, there is no road in or out of the town.

“We’re not snowed in,” one resident told The Atlantic. “The rest of them are snowed out.”

So why does anyone besides the 7-23 residents care about its existence?

Because the people of Chicken still pan for gold bullion.

Canadians Jon Juneau and Richard Harris made Alaska’s first significant gold strike in 1880, according to the article. A little over a decade later, tens of thousands of men traveled from all across the world to Alaska to pan for the precious metal in hopes of striking it rich. In 1891, gold was found in Chicken Creek and a makeshift settlement grew up around the claims. The town had close to one hundred residents at the peak of its days, the article said.

However, it is the gold that beckons these residents to Chicken. The article explains the story of Bill Dunlevy, head of the Anchorage chapter of the Gold Prospectors’ Association of America. But the first thing you would notice about Dunlevy is the five-ounce gold nugget he wears around his neck.

Dunlevy has lived in Alaska for 40 years and has 12 claims – that is, claims to found gold. He discovered the nugget around his neck in Turnagain Pass outside of Anchorage. The article explains that Dunlevy has never cashed in on his findings. Based on the gold spot price, he estimates that he has claimed upwards of $100,000, which he keeps in his “bragging box.” He lets other prospective miners look at his treasures and says he gives “people the thrill of a lifetime.”

Dunlevy and other miners make an annual trip to Chicken 400 miles away. The article explains that he works in a drysuit and dives underwater to reach the creekbed. The water does not freeze until its temperature drops below 18 degrees due to the current’s strength. So Dunlevy and his comrades will sit in their tent while watching the thermometer with the heat on.

“As soon as it gets to 18 we get in. You gotta pan quick ‘cause the water freezes in the pan. The water gets in and runs up your arm like a knife. By the end of the day you’re numb to the knees. The first day’s okay ‘cause everything is dry. Second morning you gotta get into that frozen underwear, frozen socks, try and warm them up. It’s tough. But when we found that nugget, it was like a brand new day. We was warm as toast,” Dunlevy said. “Gold mining is mostly luck. That and choosing good placing.”

Dunlevy explained that mining is like fishing, where sometimes the catch is beyond the control of the fishermen if he casts his line in an “unlucky” place. The mining life has many ups and downs. Last year, one of Dunlevy’s members mined two ounces, which practically pays for the trip itself. He explained that “the women [usually] sit and gossip on the deck all day and tan” but that at night, they all “have a potluck, get crazy, tell lies.” However, in the same group’s trip to Chicken this year, the miners found next to nothing. The risk of mining can often be costly.

It’s not simply the price of gold that keeps these people moving. It’s the thrill of the possible claim. The author of the article asked Dunlevy what he thought the attraction of gold was, beyond the obvious monetary value.

“The attraction? It’s just… gold. It’s like liquid sun or something.”

This same astonishment is what drove, raised, and at times corrupted others just like Dunlevy throughout history. But what is even more fascinating to some is that this way of life still exists today, and the gold spot price has little to do with what motivates them. 

Click here to read the full article by The Atlantic.

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The Cultural Shift from Bargain Hunting to Buying Things that Last

OWNx Team Retirement Planning

things-that-lastWe’ve all thrown away the cheap frying pan and the broken umbrella that initially seemed like a great deal in the store. Whether it was the buy-one-get-one-free, the red price on the tag, or the pressure of a friend telling us “it’s only $10,” somehow we’ve all been maneuvered into buying things that break, wear, tear, and honestly just weren’t worth it. This article will explore why bargain hunting can lead to excessive accumulation and the psychology of why viewing purchases as investments eliminates noise, rush, and clutter in our lives.

The first problem arises in the craze of bargain hunting. While finding a great deal can sometimes be fun, this concept has been sensationalized to form a community of coupon-cutting and barcode-scanning fanatics. Entire financial blogs, apps, and even television shows are dedicated to fueling this lifestyle of price-matching and finding the best deal. Yes, taking advantage of coupons or finding less expensive alternatives can be a convenient way to save money. But the bargain hunting habits have the potential to consume time and energy that could be spent in more meaningful areas of life. And many times, the bargains can be deceiving or unnecessary purchases anyway. So why all the attention on coupons and bargains and great deals? One word: control.Read More

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A Look into Our Nation’s First Coins

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Leading up to the year of 1792, the United States experienced great confusion concerning the value of different coins and currencies in circulation. Spanish silver and English shillings were two of the most common mediums of exchange, but the intricate conversion tables led to burdensome trade and commerce.

Congress – led by Benjamin Franklin, Thomas Jefferson, and Alexander Hamilton – promoted the decimal system as a means of breaking from the past and establishing US currency as its own entity. Several years later on April 2, 1792, the Coinage Act of 1792 (also known as the Mint Act) established this monetary system and set the stage for some of our nation’s earliest and rarest coins.

Henry Voight was one of the first designers of U.S. coins. He applied for a job at the United States mint in 1791 sooner after the institution was newly installed. Though his personal life proved to be a bit scandalous, Voight’s exceptional experience with machining and coining opened doors for him. Less than one month after the Coinage Act was signed into law, Washington appointed Voight as the Acting Chief Coiner of US Mint on June 1. He was a primary designer and engraver of some of our nation’s first coins. And a little over one more month after Voight’s installment as Chief Coiner, Thomas Jefferson reported that there were 1500 half dimes of new coinage.

Let’s take a look into some of our nation’s oldest coins and rare designs. All photos courtesy of USA Coin Book.

Flowing Hair Liberty Large Cent with a linked chain on the reverse side of the coin. 

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Voight’s design of Flowing Hair Liberty Large Cent with a wreath on the reverse

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These cents contain eleven penny-weights of copper.

 

Liberty Cap Half Cent design officially made by Joseph Wright, but some believe it was designed by Henry Voight.

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Voight also created and produced several rarer and uncommon coins, including the 1792 Silver Center Cent and the 1792 Half Disme.

1792 Silver Center Cent designed by Henry Voigt

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The 1792 Silver Cent was designed to help maintain intrinsic value by inserting silver metal in the center of the copper coin. The coin consists of the flowing hair liberty and the words “LIBERTY PARENT OF SCIENCE AND INDUST” with a wreath on the reverse side of the coin. However, this coin was too much work to reproduce and was disregarded and replaced by the pure Copper Large Cent.  One of these coins sold for $414,000 in 2002 and PCGS offered an uncirculated MS61 grade silver center cent for over $1 million, according to the USA Coin Book.

The 1792 Half Disme

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Voight played a key role in the production of the 1792 Half Disme. According to the Coinage Act of 1792, half dismes were to each “be the value of one twentieth of a dollar, and to contain eighteen grains and nine sexteenths parts of a grain of pure, or twenty grains and four fifth parts of a grain of standard silver.” These silver coins were fashioned in the basement of a local saw-maker shop in Philadelphia before the actual mint buildings had been completed, according to USA Coin Book. The article continues to explain that only 1500 of them were made and only 200-400 of these silver coins still exist today. One of the uncirculated coins was sold in 2006 for $1,322,00 and another for $1,500,0 in 2007, according to the USA Coin Book article.

From Copper to Gold Value – Today’s Investments Came From Yesterday’s Coins

The gold price and coins such as the American Eagle is what drives investment interest today, it is good to sometimes step back and understand the history of our money. It brings to light the timelessness of gold’s value and why gold and silver coins continue to be highly sought after.

Click here to read more on Henry Voight and early US coins.

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Gold demand at record levels in Q1 2016

OWNx Team Gold & Silver Market, News & Current Events Leave a Comment

The World Gold Council reports that gold demand surged in the first three months of this year. That would certainly help explain why the price of gold has surged from $1,060 to nearly $1,300 in that time frame. They reported that the increase was driven by “huge” purchases of gold ETFs due to investor concerns regarding an uncertain financial landscape.

This is how we would expect the price of gold to act given such demand. However, in the coming years economic and financial system uncertainty will continue to be in the news. Thus while we expect significant volatility in the coming months, the long term price trend appears to have shifted from the sideways to down pattern we have experienced for the past four plus years. As always, we believe physical gold and silver bullion is the best way to own gold and silver.

The next 12 to 24 months should be a good time to dollar cost average into the market as we get set for a major change in the direction of the price of silver and gold and a possible multi-year bull market beyond 2017.

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The Psychology Behind Avoidance Coping

OWNx Team Retirement Planning

The fear of bad news often prevents us from sustaining healthy lives. We cancel our dentist appointments the day before so we don’t have to hear if we’ve acquired new cavities. We avoid stepping on the scale so we don’t have to acknowledge the extra piece of birthday cake we somehow “misplaced.” And some of us ignore our bank statements so we don’t have to panic or feel overwhelmed with guilt when we go out for dinner with friends that evening.

This behavior is common, but it also can be crippling when it comes to financial health. The idea of “ignorance is bliss” might resonate with most of us and seem like a good approach when it comes to avoiding financial stress, but realistically, preparedness is security. And ignorant “bliss” isn’t really all that blissful when every time we swipe a card we wonder if we’re cutting it too close. Responsible and financially sound people should never voluntarily choose to live in ignorance.

For those of us wanting to live simpler lives and take ownership of our finances, it’s time to call out this behavior for what it is: avoidance coping.Read More

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Florida Family Finds Buried Gold Coins from 1715 Sunken Spanish Fleets

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A Florida family announced they recovered $1 million worth of sunken treasure from the Spanish treasure fleet’s shipwrecks off the coast of Florida. Today also marks the 300th anniversary of the shipwrecks. The Schmitt family kept their findings a secret for nearly a month from the public, but finally held a press-conference to announce their discovery and allow the public to view photos of the recovered gold coins.

The Schmitts are subcontractors to 1715 Fleet – Queens Jewels LLC. Among the findings are 51 gold coins, 40 feet of intricate gold chain, and one extremely rare gold coin that is worth more than half a million dollars alone. This particular coin is “called a Royal made for the king of Spain, Phillip V.” A news release reports that only a few are known to exist and the coin, also called the “Tricentennial Royal,” bears the date 1715.

Brent Brisben and his father, William Brisben, manage all of the historic shipwreck salvage operations through Queens Jewels LLC. Brisben said he, the Schmitts, and the treasure will be featured Fox News on Wednesday morning.

Of the 11 ships that sank off the coast of Florida 300 years ago, Brisben said the 1715 Fleet “has positively identified six of those ships,” according to Florida Today.

“Five more are remaining,” Brisben said in a Florida Today article, “with an estimated $400 million worth of treasure still out there.”

While this isn’t your standard way to accumulate gold and silver coins, if you have the means, it could be an exciting way to go about it. There are still five ships out there!

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China’s gold exchange gains traction

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Foreign banks and trading houses have signed up for China’s planned global gold exchange. New members and major players in the industry are intrigued to have access to China as the biggest gold consumer worldwide and to trade commodities in the yuan currency, according to Reuters.

China seeks to challenge the dominance of London and New York in trading and the strong reaction from foreign players is supporting this goal. By gaining pricing power over the metal, China will further establish its leadership as the primary golden global leader.

Ten more companies than originally expected signed up for the Shanghai Gold Exchange. Though 30 companies were approached for the first round of membership, 40 have signed up before the exchange launches in just one month.

The global trading community will watch the exchange closely since “gold is one of the first commodities that China is opening up to foreign players by allowing them to participate directly in physical trade and to use offshore yuan,” according to the article.

The article also explains that operations will begin on Sept. 29 in the Shanghai free-trade zone, with three yuan-denominated physical gold contracts of 100 grams, 1 kg, and the bigger London gold delivery bar weighing 12.5 kg.

“It is too important a market to stay away,” said Bernhard Schnellmann, director of Swiss-based Argor-Heraeus, one of the world’s biggest gold refineries, which is consider joining. “I think the SGE will be successful with this new exchange as they have a big home market and there should be enough liquidity.”

Click here to read the full article.

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India Finds New Gold Smuggling Route

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India has such an insatiable appetite for gold that smugglers are finding new ways to avoid the 10 percent import duty and sneak the precious metal into the country illegally. By avoiding the duty and meeting the high demand, gold smuggling now ranges from swallowing nuggets to hiding bars in dead cows, according to NDTV.

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In one case, a gold exporting firm tried to bypass restrictions by using a tax-free special economic zone. However, the owner of the firm was arrested when police stopped a car trying to take 25 gold bars, worth about $1 million, out of that zone.

The ministry of commerce, which is in charge of special economic zones, did not reply to any requests for comments. This new scheme reveals that there are more complicated and sophisticated strategies being made by smugglers to take huge profits on gold in the domestic market by not paying the import tax.

However, all 185 of these special economic zones are now vulnerable to gold smuggling activities.

The World Gold Council estimates that 150-200 tonnes of gold illegally entered India last year. You can read more about this here.

Click here to read the full article.

 

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