Market Updates

Interest rates play a key role in today’s modern economy and monetary policy. The Federal Reserve can make changes to key interest rates and interest rate expectations and control the flow of capital into the economy. In other words, by maintaining low interest rates, capital is easier to acquire. This ease of acquiring capital can fuel economic growth as more money available translates into more potential spending. If too much capital becomes available, however, a situation may arise in which there is” too much money chasing too few goods.” This can lead to inflation due to the fact that as more capital looks to acquire fewer goods and services, those providers of goods and services can charge more money, hence rising prices.

There is a common misconpception that interest rates and precious metals are inversely correlated. Though this may certainly be the case at times, here we will outline the relationship between the two, and how an inverse correlation may not always be the case.

As a commodity, gold prices fluctuate. These fluctuations can be very minor and can at times appear to be more significant. Any financial news channel you may tune into, or any financial news website you may visit will likely have the current price of gold, silver and even other precious metals readily available. While this information is great at providing a snapshot of current conditions, when investing in Gold, it is necessary to also take a macro-oriented stance.

If one has looked into the gold market in recent years, one will likely have read that central banks are net buyers of gold. After years of selling the yellow metal these powerful financial institutions are now buying gold and holding it. Central banks are the largest players in the gold market, and if they are buying gold there is likely good reason. Below, we will outline why central banks have holdings in Gold.

The U.S. dollar has enjoyed its status as the global reserve currency of choice for some time now. Since the implementation of The Bretton Woods Agreement, the dollar has been considered the anchor of the global financial system. Under this agreement, the United States guaranteed other central banks that they could sell their dollar reserves for a fixed rate of gold. Here, we examine the unique status of the US Dollar, and its role as a reserve currency within the global economy and financial markets.

Silver is a commodity, and like any other commodity, its price is a reflection of current supply and demand. Silver is somewhat unique in the precious metals space, however, as its value may be driven not only by investment demand but also industrial demand. This allows silver to potentially experience the best of both worlds. In a strong economy, industrial demand for silver may heat up and potentially drive prices higher. In a slow economy, or during times of risk aversion, silver may potentially benefit from investment demand as investors look for perceived safe havens to put capital to work in. Here, we examine the various factors that affect the Silver price.

In recent years, there has been seemingly more and more debate about the feasibility of returning to the gold standard. As concerns over the U.S. dollar mount, there may be further talk of such ideas, although whether or not they make sense and could be actually implemented is highly debatable.

China is the world’s second largest economy, and has taken steps to cement its place among the economic elite of the world. One of those steps has been the acquiring of gold. The country appears to have an insatiable appetite for the yellow metal, and has been building its gold reserves in recent years.

What a week. It’s a new year for the world’s financial markets, but it sure didn’t take long for investors to realize that the themes of 2015 are still very much prevalent. The week and the year began with Chinese regulators attempting to maintain control of their currency as the offshore market continues to discount the official rate has seen investors sell Chinese stock markets and prompt fear of further weakness in the world’s second biggest economy.

Diversification is the careful consideration and combination of a wide range of investments within a portfolio in an attempt to smooth overall volatility.  Diversification is a broad term, however, and can be accomplished in different ways. Here, we will examine how this investment technique pertains to investing in precious metals.

Quantitative easing, affectionately referred to as “QE”, is a term that has been widely used in recent years. In fact, more people are likely familiar with this phrase than ever before. Given its coverage in the media, and its widespread use, we felt it prudent to provide a simple explanation of what QE is and how it can affect financial markets.

Global equity markets have been on a tear in recent years, with the benchmark U.S. SP 500 index having made solid triple digit returns over the span of the last several years. Markets have been climbing since the 2009 lows, and continue to make new all-time highs.

This run higher in the equity markets as well as current valuation levels obviously begs a few questions:

-Will the rally continue?

-Are stocks overpriced at current levels?

-Is this a set up for a nasty correction?

-What has driven such significant upside?

We feel it is important to address some of these questions, as we believe the day will come when equity investors once again run for the exits. In turn, we believe that gold and precious metals could stand to benefit handsomely if and when this does in fact occur.

When purchasing precious metals, buyers must take into consideration where they intend to store their gold, silver or other metals.

While many may elect to store their metals at home or in a safe deposit box, this can become more challenging if larger quantities are being purchased. While the accessibility of home storage can be quite appealing, it does also represent a security concern. A safe deposit box, on the other hand, may offer superior security but comes with more limited access.

While using a depository to store your precious metals does not provide immediate access to your metals, it does offer a cost-effective and secure solution to your precious metals storage needs.

While different investors may have different reasons for owning gold, there are several reasons that are very common among gold buyers. Here we will outline the top ten reasons to own physical gold.

When comparing the various uses of gold, silver, platinum and palladium, silver may have the most industrial uses and possibilities. Silver can be used in various industrial applications across a very wide range of industries. This puts silver in a somewhat unique position within the precious metals complex. Understanding this salient relationship is an important part of investing in silver.

When buying precious metals, whether it is coins, bars or rounds, it is important to understand the differences between government mints and private mints. Here, we will outline their key differences.

Investors today have a lot of choices when it comes to investing in precious metals. Gold or silver backed ETFs, gold or silver mining stocks and certificates are just a few of the choices available. We believe that owning physical, tangible precious metals is the best way to go. This guide will outline some of the key differences between these investment choices, and why physical ownership may be beneficial.

The gold to silver ratio has been used for a long time. This ratio tells one how much silver it takes to buy one ounce of gold. For example, if the gold/silver ration is 50:1, then takes 50 ounces of silver to buy one ounce of gold. Considered by many as a benchmark for the relationship between the metals, here we examine why this has come to be.

Gold prices are a result of current supply and demand. The gold market is in a constant state of flux as price discovery takes place. That being said, there are a number of outside markets that can affect the price of gold. Here we will discuss some of these key outside markets:

For many precious metals investors, the goal is simple: Acquire as many ounces of gold, silver, platinum or palladium as possible. Needless to say, buying numismatic or collector coins is not going to help one accomplish this goal. Here are some simple tips to help you acquire more ounces of gold or silver and to make your precious metals investment dollars work harder for you.

Coins that have undergone a thorough inspection process by a major grading service are referred to as certified or graded coins. While coin grading may seem unnecessary to some, this process can allow one to buy with confidence in a coin’s authenticity, condition and market value. Graded coins carry higher premiums than non-graded coins, but for many this additional premium is worth the peace of mind that comes with a certified coin.