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
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.
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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, and platinum…either automatically or over time or with a click.
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
