As we sat down to put together this newsletter, as always we started with what the theme should be. It's almost impossible not to sound like a broken record because regardless of the theme we select, it has to include the word "change." We saw this period coming and started talking about the massive changes ahead nearly two years ago. Little did we realize that the pace would accelerate to where, today, it's nearly impossible to keep up with what is happening on a daily basis.
The question is then, to what degree should we try to keep up? The answer of course will vary from person to person. As the world spins ever faster, we believe it is important to remain grounded and not lose sight of what really matters. Making small adjustments can have a big impact. This aligns with our long-held belief that "small is the new big." Thus, that is the subject of this newsletter.
The OWNx Team
As the calendar turned to 2021, there was a great deal of expectation and hope that this year would be better than 2020. It hasn’t taken long to realize that it already has its own set of difficulties. Between the political landscape and lasting global effects of lockdowns, many areas of life continue to be challenging. The only thing that seems to defy the trend (for now) is the value of the stock market.
Here at OWNx, we continue to monitor the world around us. From the global economic “big picture” to behind-the-scenes details of the precious metals markets, our goal is to look for opportunities to make things better in any way possible. Keep an eye out for some exciting new features that we plan to launch in the coming months.
In addition, although it’s not something we can change overnight, we pledge to rely less and less (as a company and as individuals) on “big tech.” The server and backups for the OWNx system have never been housed on the cloud, but like many of you, there are little things that we plan to do differently.
Personally, what that means for me in the short term is ordering from Amazon much less. It takes a little extra time (and sometimes cost) to walk down the street or find the item you need/want locally. However, small changes in this one area can have a big impact over time. As we all adjust to new realities, we take our first steps to create a better world.
Here’s to a hopeful remainder of 2021!
Co-Founder and COO
Gold and Silver
What Do the Charts Say?
Can you say "consolidation?" Both gold and silver prices remain in an extended consolidation phase. This is often the case when prices substantially outrun a healthy advance. Such was the case from the March 2020 lows to the August 2020 highs. Historically, the metals have never absorbed such a run without taking an extended pause. That's where we are today.
With gold, the chart shows a marked downward bias over the last six months since that high. The price has now entered a down-sloping wedge. Technically, the setup is for the price to break out above the downslope over the next two months and resume a new uptrend. However, if it continues through and breaks strong support in the $1780 range, we may be in for a deeper correction throughout 2021. By our next newsletter, we'll know which it is.
Silver is showing relative strength compared to gold. Its chart paints a more distinct sideways consolidation. This after a much stronger run in percentage terms than gold had from March to August. This is a good sign. It means that silver is not "confirming" that a longer-term downtrend has begun.
Overall, the charts are breaking some norms from past bull runs. This isn't unexpected, as the world is in uncharted financial and geopolitical waters. As we mentioned in our July 2020 Newsletter, this bull run was likely to be "a bit more wild" than past ones. That is proving to be true.
Fundamentally, there is no reason to believe that the precious metals bull market is over. On the contrary, the reasons for future appreciation continue to grow. Due to the structure of how metals markets work today (paper contracts leveraged and traded) and the COVID economy, we can expect continued high volatility for the next few years as capital decides where it needs to park until the dust settles.
Technically, it appears we are in a great window to accumulate these financial insurance instruments. It's what our platform was made for.
Indicators That Indeed, "Small is the new big."
Over the past two months, the trend toward decentralization ("localism") and the power of "the little guys" banding together to overcome centralized entities from "big tech" to hedge funds has been seismic. This acceleration is likely to only increase in the coming months and years. Geopolitical and cultural events (censorship in particular) have set in motion an unstoppable force.
As individuals sort out how to work together to achieve their goals outside of existing systems, entire industries will be transformed as new alliances emerge. While seemingly chaotic, we see it as an exciting time. We all must simply use wisdom in how we engage these new alliances.