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Working For The Weak-end: Market Outlook

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To wrap up the week in U.S. trading, both gold and silver prices weakened. Furthermore, outside market forces such as a higher U.S. dollar index and rising U.S. Treasury yields are also bearish for the metals market bulls. April gold closed at $1,817.10, down by $9.7, while March silver is down $.496 at $20.810.

The U.S. data point of the day on Friday was the personal income and outlays report for January, including its PCE price index component. As the Fed’s preferred inflation measure, the annual core PCE price index, accelerated in January to 4.7%, above expectations of 4.4%. This macroeconomic outlook has led to concerns about gold’s vulnerability in the short term, with indications of a potential further drop if it falls below $1,800 per ounce. As noted yesterday, there is strong resistance indications at $1,780. However, geopolitical tensions are supporting gold’s search for a bottom in this downtrend, as the threat of nuclear war looms large.

Global stock markets experienced mixed results overnight, with U.S. stock indexes opening and closing lower after a hot inflation report. This week, the U.S. stock indexes have hit multi-week lows, signaling a low risk appetite, as the market finally understands that the U.S. will maintain tighter monetary policies to curb inflation. This scenario is bearish for the metals market from a global demand perspective.

Despite the volatility in the gold market, some experts predict that the precious metal’s tendency for quick selloffs and recoveries during times of panic will continue. Analysts will closely monitor macro data scheduled for next week, including the ISM manufacturing and service sector reports for February, for any signs of weakness after a more-or-less strong start to the year.

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All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC. and should not be construed as financial advice.

 

The Future of Gold and Silver: Prices, Predictions, and More

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As investors and traders look to research and forecast for 2023, one of the most important questions on their minds is what the economic outlook of gold and silver will be. With gold and silver being two of the most popular and valuable commodities in the world, understanding the potential price movements and predictions for these precious metals is essential for anyone looking to make informed decisions in the financial markets. 2022 once again provided evidence of how gold preserves when there is turbulence in the market. Are we in for a record bearish or bullish year? Let’s explore the future of gold and silver, looking at prices, predictions, and more.

1. Gold and silver prices have been on an upward trend since the second half of 2022, with gold prices seeing an increase of over 10 percent in Q4.

2. Analysts predict that gold and silver prices will continue to rise in the coming years, with some expecting a bullish outlook for 2023.

3. The US dollar is expected to remain weak in the coming years. Keep an eye on central bank interest rates.

4. Global geopolitical tensions are expected to remain high in the coming years.

5. Gold and silver prices could be affected by key races for governor, mayor and other offices, indicating momentum for the direction of the US presidential election in November 2024.

Overview of Gold and Silver

Gold and silver (next to currencies and bonds) are both considered safe-haven assets, meaning they tend to increase in value during times of economic uncertainty. As such, gold and silver’s price range tends to move inversely to the stock market, meaning that when the stock market is down, gold and silver prices tend to go up. Gold and silver prices are also affected by supply and demand, as well as geopolitical events. Factors such as GDP growth, inflation, and currency exchange rates will all play a role in determining the price of gold and silver.

When it comes to predicting the future of gold and silver prices, there are a few different factors to consider. First, it’s important to look at the current economic environment. If the economy is strong and there is low inflation, gold and silver prices tend to be lower. On the other hand, if the economy is average-to-weak and there is high inflation, gold and silver prices tend to surge higher. It’s also important to look at the physical demand for gold and silver. If institutional, retail, and industrial demand is high, prices tend to increase. Conversely, if demand is low, prices tend to decrease- while if they drop too low, supply will dwindle.

Traders can utilize strong technical indicators to better anticipate price fluctuations and still provide the wrong results due to unforeseen geopolitical activities. If there is political or economic instability in a particular region, gold and silver prices tend to receive a boost. Looking along party lines: when a Democrat is in office metals prices tend to rise, while Republican leadership typically pushes prices down.

II. Economic Outlook for Gold and Silver in 2023

Overall, the economic outlook for gold and silver in 2023 should yield positive energy. As the global economy continues to recover from the pandemic, demand for gold and silver is expected to remain strong. Additionally, geopolitical events such as the Ukrainian invasion will continue to stoke metals prices. Rising inflation in the US leading to expanded global recession pressures could also have a broader impact on gold and silver prices. And while the dollar had a strong annual performance, last year’s gold rally in December showed that the greenback is weakening. The rally doesn’t show any signs of stopping, trading above the 50-day moving average and likely pushing above $1,900. The market’s consensus seems to indicate a more severe downturn is still on the horizon in the short term.

Furthermore, the introduction of new technologies and alternative investments could reduce the appeal of gold and silver as safe-haven assets. While Cryptocurrencies may have lost their luster in recent months, it will be interesting to see how they will rebound in the new year. It’s possible many who favored crypto yet again revisit precious metals as a safe haven asset.

Gold and silver are two of the most important commodities in the world and understanding the future of these precious metals are essential for anyone looking to make informed decisions investing in the financial markets. Will we see any additional unexpected geopolitical activities impact the market? Or perhaps a new trend on TikTok where Gen Z falls in love with physical metals! Overall, the economic outlook for gold and silver in 2023 is positive, and it’s likely that prices will remain high. While easing tensions in Ukraine and Russia could help lower prices, It’s hard to imagine prices falling to pre-covid levels. As such, it is impossible to predict the prices of gold and silver for 2023 accurately. However, by monitoring the market and staying informed of global events, investors can make informed decisions, rather than those based in fear and greed, about when to buy and sell gold and silver.

Don’t forget!  GoldClub Direct currently has 2023 American gold and silver eagles in stock and ready to ship!

 

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC.. and should not be construed as financial advice.

The History of the Gold Standard

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The gold standard is a monetary system in which the currency is backed by gold reserves. Every denomination of currency is worth a specific amount of gold. The fixed price of gold is used to regulate the value of the currency, and the government can buy and sell gold at that price. Therefore, if the government wanted to add more money into circulation, there would also have to be equal additions to the gold reserves. This system helps to provide long-term stability as it is difficult for the government to inflate prices with the currency pegged to gold. 

 

History of the United States Gold Standard

There are no longer any countries that use the gold standard. The United States used the gold standard from 1879 to 1933 and had a quasi-gold standard from 1934-1971. Today, the United States uses a fiat monetary system, which uses a currency that the government creates, and that currency must be accepted as payment for its given value.  

In 1792, the United States adopted a bimetallic standard, as silver was more abundant at that time. The silver-to-gold ratio was set at 15-1, however, the value of the metals varied greatly over time, which pushed gold out of circulation. The Coinage Act of 1834 tried to fix this problem by changing the ratio to 16-1.  This act led to the adoption of the gold standard. 

 

The Gold Standard

Although there was a period of fiat money from 1862 to 1879, the true gold standard in America lasted from 1879 to 1933. During this time, gold and the US dollar could be exchanged based on the fixed price set by the government. In 1900, the US Government committed to the gold standard by declaring the gold dollar as the standard unit of account, and a gold reserve for paper money was established. In 1933, the official gold standard of the United States ended. Franklin D. Roosevelt signed Executive Order 6102 into law. This law forced all Americans to turn in their gold, except for a few exceptions, to be redeemed for a set price of $20.67 per ounce. Convertibility of money to gold was then suspended, and a new parity of gold with a devaluation of 40% was established for international transactions, at a price of $35 per ounce. American citizens were still barred from “hoarding” gold, so the gold value of the US dollar was almost meaningless. 

 

The Quasi-Gold Standard

The laws signed by Franklin D. Roosevelt began the United States quasi-gold standard. Under this system, the dollar was still defined in terms of gold. This continued under the Bretton Woods international monetary agreement of 1944, which used gold as the universal standard for collective international currency exchange.

 

The $35 per ounce convertibility of gold remained until 1971 when Richard Nixon announced the United States would no longer convert dollars to gold at the fixed value. The dollar-to-gold ratio did not change until 1972 with a devaluation of the dollar to $38 per ounce of gold. There were still no conversions from the US government at this price. The dollar was devalued again to $42.22 per ounce, but this price couldn’t be sustained either. In reality, the US was taken off the gold standard after Nixon announced an end to gold-dollar convertibility, but it wasn’t until 1976 that the government officially removed gold from the description of the dollar.  In 1974, Gerald Ford signed legislation to allow citizens to own gold bullion again. The United States monetary system returned to the use of fiat money.

 All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClubDirect LLC.. and should not be construed as financial advice.

How should I care for my precious metals in 2022?

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As the holidays approach, it is a great time to reflect on how we maintain important aspects of our health and lives and give thanks for all our blessings. In the same vein, it is important when receiving precious metals to understand how to care for the product. Using the appropriate methods can help to maintain the value of your asset.

Upon arrival, handling the coin with care will help to preserve the condition. Before holding the product, it is recommended to wash your hands and use hand sanitizer. Only handle the product when it is necessary to do so. For collectible products, it can also help to hold the coin or bar by its edges, so as to not get fingerprints on the obverse or reverse. If available, use lint-free cotton gloves to handle the asset to avoid fingerprints.

Another helpful tip is to prepare a cleaned area for you to place the asset. A piece of cloth or towel can help to reduce unnecessary contact with dirty surfaces. A soft texture can also help to reduce any damage if the commodity is accidentally dropped.

When handling different metals, it is also smart to keep the products separate and clean your hands when switching between products. This will ensure no dirt from one metal can tarnish the other metal. Avoid breathing over the products to keep damaging moisture away from the assets.

Many people believe cleaning a precious metal product can add value to it. This is a large misconception. Cleaning a coin can damage the coin and lower its value. Many collectors would rather have an original product with some blemishes than an incorrectly cleaned product.

If cleaning your asset is necessary, it is suggested to only clean the most superficial layer of the product. This will help to keep the precious metal fully intact. Only use mild soap and water. Specialized polishers can corrode the metal. Once washed, pat dry with a soft towel, being careful not to scrub, as this can scratch the surface. Dry completely before returning the product to storage.

Storage is also a very important aspect of caring for your metals. Store your metals in a cool, dry place. The best containers for precious metals are airtight and natural to prevent any moisture from getting in and to keep corrosive elements away from your assets. Just as with handling, it is essential to separate tarnished metals from untarnished metals to prevent cross-contamination. By following all of these steps, you will be able to care for your products to ensure quality and value remains.

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClubDirect LLC.. and should not be construed as financial advice.

Valuing a coin collection in 2022

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There are millions of coins in the world ranging back over 5,000 years. Each coin can have unique aspects that help to give it value. Let’s say you were looking around your parents’ or grandparents’ house and discovered an old coin collection. How should you determine what it is worth?

Many factors can contribute to a coin’s value. When first finding the collection, it is best to determine the coin’s age, condition, rarity, and precious metal content. These factors will give you a quick understanding of the coin collection before you make your next decision.

Age can be an important consideration to determine value. Usually, coins will increase in value over time as many coins can be lost or damaged. However, age cannot be a deciding factor of value. Many modern coins can be worth more than 1000-year-old coins. 

Condition is another factor used to establish value. The condition of a coin can go hand in hand with its age. Over time, coins can easily become worn out and damaged. A collection that is stored correctly can greatly increase the condition and value of the coins. The closer a coin is to its mint state, the more it will be valued. With older coins, it is uncommon to see them in pristine condition, so finding an old coin in great condition can be rewarding.  Coins can be professionally graded by third-party graders like PCGS or NGC on a scale from 1-70. The higher the grade, the better the condition, helping to increase the value of the coin.

Rarity greatly contributes to a coin’s value. To find a coin’s rarity, it is best to start by researching the mintage of the coin. The mintage will tell you how many coins were minted with the same specifications from a specific year. The mintage is fixed, meaning they cannot create more coins of that variation. A mint mark (a small letter stamped on the coin to display where the coin was minted) can also lead to the coin’s rarity. The Guide Book of United States Coins, also known as the Red Book, gives the original mintage numbers for US coins, along with other important information and estimated values. Many coins have been melted for their bullion value, which has led to the remaining mintage being much less than the original. The Red Book is a necessity for any prospective collector. Older coins tend to be rarer as many coins have been lost or damaged over the years, leading to fewer circulating. With a high-rarity coin, fewer people have it, and more people want to have it. 

The precious metal content can also drive the value of a coin. Throughout history, coins have been made using precious metals like gold and silver. This creates coins that have an intrinsic value. If a coin has 1 oz of gold, then the coin is worth at least the price of 1 oz of gold. Precious metal coins have this minimum intrinsic value, and they can also have collectible value, which can increase the value even more. Gold and silver coins have always been some of the most popular coins to add to a collection.

In order to find the value of your coin collection, you must do the research to understand your coins. Other factors can also influence the value of the coins, such as the demand, which can change based on consumer preferences. Developing an estimated value is very difficult for coins as many factors can affect their value, which is why in-depth research is a crucial step after finding a collection. If you are looking to sell the collection, make sure you sell to a reputable source to ensure they will give you a fair price.

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClubDirect LLC.. and should not be construed as financial advice.

Gold and Silver Supply Shortage of 2022

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Silver and Gold production supply has steadily been decreasing throughout the year, leading to a continued supply squeeze on many products. Inventories of warehouses and retailers have been lower than ever before, leading to unprecedented times in the precious metals industry. A part of the bullion squeeze can be attributed to the Queen’s passing, which will lead to the changing design of many of the most popular bullion coins, such as the Britannia, Maple Leaf, and Kangaroo, to feature King Charles III. This has led to higher demand and many sites, such as the British Mint, having to form queues to slow the site traffic.

This supply squeeze cannot be attributed to Queen’s death alone. In March 2022, the US Mint announced they would stop production of morgan and peace dollars for the rest of the year. Other mints took similar steps to lower production with fears of continuing supply shortages. 

The high demand and low supply have led premiums over spot to surge. The 2022 1 oz American Silver Eagle has increased to a premium of $18 over spot. The premiums are continuing to increase, but the spot price of precious metals has not seen the same increase. 

Although there is a correlation to a lower supply of bullion after the Queen’s death, many experts believe the supply shortage has more to do with the US Dollar and the manipulation of the paper market. COMEX is one of the world’s largest futures and options trading markets for metals. In order to provide options and futures for traders, COMEX must hold physical bullion in depositories to account for the bullion traded in the paper market, however, many experts believe COMEX does not have enough physical bullion to cover the paper market. This can cause a lot of future problems if the COMEX bullion is requested for delivery. 

Along with the paper vs physical market difference, the COMEX supply of gold and silver bullion has been decreasing dramatically over the past year. On January 27, 2021, the COMEX warehouse had 149,509,868 registered (ready for COMEX delivery) troy ounces of silver. On October 19, 2022, that number had decreased to 38,134,405.959 troy ounces. That is over a 73% drop in registered silver supply, and it is continuing to decrease. A similar decrease is happening in gold, when in May of 2021, registered gold was around 20 million ounces, and in October of 2022, that number had decreased to 12 million ounces. This forecasts the growing demand for physical bullion, and how the supply is not able to keep up. In 2022 alone, demand for gold has jumped an estimated 12% year over year.

Experts believe the largest players in the industry are pressuring the markets to keep prices low to cover their contracts. As long as these prices stay low, there will continue to be a squeeze on the supply, and it will continue to be hard for companies to stock their warehouses and for customers to buy the bullion products they want. 

Distrust in the financial system also has increased demand for bullion products. Due to turmoil throughout the world and ongoing economic problems, distrust in the financial industry has reached unprecedented levels. Since precious metals are seen as a hedge against economic downturns, customers around the world have continued to buy gold and silver. With the squeeze on the bullion market and prices continuing to stay low, investors will continue to buy precious metals, putting more pressure on the market. 

It is not only individual investors and corporations investing heavily in the precious metals market, as governments, such as India, have imported massive amounts of gold and silver to increase their stockpiles. It is estimated India will have imported over 8,200 tons by the end of the year. 

This supply shortage can be seen most clearly when buying bullion products on precious metal websites. Some of the most popular products for investors have been out of stock, and companies have taken a long time to restock their inventory. GoldClub Direct continues to be able to offer some of the most popular bullion products on the market. If you are thinking of following the strategies of governments, institutions, and individual investors worldwide, discover a renowned selection of bullion products on GoldClub Direct.

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC.. and should not be construed as financial advice.

Precious Metal IRAs in 2022

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What is a Self-Directed IRA?

A self-directed IRA is an individual retirement account that offers alternative investments that are typically not allowed in standard IRAs. The main advantage of an IRA is its tax benefits. Standard IRAs only have limited choices as investments, while self-directed IRAs have many more options to invest in. This allows greater diversification of an individual’s portfolio. Popular alternative investments held in self-directed IRAs include precious metals and real estate. The account is administered by a custodian or trustee, but fully managed by the account holder. A self-directed IRA can be either a traditional IRA (tax-deductible contributions) or a Roth IRA (tax-free distributions). 

Investors using a self-directed IRA must understand how they work, as all the responsibility lies on the account holder. The individual must have the initiative and do their own research, as they cannot receive any investment advice from the custodian. For some investments, while using a self-directed IRA, there are many strict rules the individual must follow. If not followed correctly, it can cause higher taxes, something the account is trying to avoid. There is also a fee structure that the individual should be aware of. The extra investment opportunities in a self-directed IRA can lead to more risk, so the investor must be wary of any possible mistakes. 

 

How Can I open a Self-Directed IRA?

If you are looking to open up a self-directed IRA, GoldClub Direct has a step-by-step guide. To find this guide, go to the GoldClub Direct home page, and at the top of the page is a tab that says Precious Metals IRA. This page will tell you exactly what you need to do to open up an account. This entire process should take just 3 minutes. The steps you will need to take include:

  1. Open an account with GoldClub Direct
  2. Open an account with a trusted IRA custodian
  3. Fund your IRA
  4. Begin purchasing metals for vault storage

What Are The Requirements in a Self-Directed IRA?

As mentioned above, there are two types of IRA accounts you can open, a traditional IRA and a Roth IRA. These two accounts have different tax rules, eligibility requirements, contribution requirements, and distribution requirements.

With a traditional IRA, you receive a tax break when you contribute to the account, but have to pay taxes when you withdraw during retirement. With a Roth IRA, you do not receive any tax benefits during contributions, but when you withdraw, your distribution is tax-free.

Traditional IRAs include a mandatory minimum annual withdrawal once you turn 72, called required minimum distributions (RMDs).  There is no required withdrawal with Roth IRA. With a Roth IRA, once you turn 59 ½ years old, withdrawals are tax-free and penalty-free. You can withdraw your contributions before that age, but if you withdraw your earnings, you will need to pay taxes on that amount. Traditional IRAs are also penalty-free once you turn 59 ½, but you will still need to pay taxes. 

Self-directed IRAs must follow the general IRA contribution limits. In 2021, and 2022 the contribution limit for retirement accounts is $6,000 and $7,000 if you are over the age of 50. This amount increased from $5,500 ($6,500) in 2019. In 2020, they removed the age limit to contribute to both traditional and Roth IRAs. Before 2020, individuals over the age of 70 ½ could not make regular contributions to a traditional IRA. 

Traditional IRAs do not have income limits to contribute to an account, however, there is an income limit for Roth IRAs. This is based on your filing status and income. That information can be found here.  If you would like to find out more information about IRA contribution limits, you can click here. 

 

Which products can I buy for my self-directed IRA?

Precious metals are available to include in self-directed IRAs. Gold and Silver are the most common precious metals stored in self-directed IRAs. Only specific types of bullion are accepted, as self-directed IRAs do not allow collectibles, which include some rare coins. Be sure to choose the approved bullion, as it could be rejected by the depository.

IRA-approved bullion must also meet a specific level of fineness. The minimum gold fineness is 0.995. The minimum silver fineness is 0.999. The minimum platinum fineness is 0.9995. The minimum palladium fineness is 0.9995. The American Gold Eagle is the only exception to this rule due to its popularity.

At GoldClub Direct we offer various products that are approved for self-directed IRAs. In order to see if the product is IRA eligible, go to the product page and click on specifications or coin highlights. Under the specifications or coin highlights tab, it will provide information on the product’s eligibility for a self-directed IRA.

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClub Direct LLC.. and should not be construed as financial advice.

Precious Metals Supply & Demand

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In order to understand the precious metal market, it is important for investors to recognize the effects of supply and demand. Supply and Demand are the factors that determine the market price of precious metals. An increase in supply will shift the supply curve to intersect with the demand curve at a lower price and a higher quantity demanded. An increase in demand will shift the demand curve to intersect at a higher price and a higher quantity demanded. The opposite effect will happen with a decrease in supply or demand. 

 

Gold Supply

Gold has been smelted down since at least 3600 B.C. To this day we are continuing to mine gold around the world. Mining gold accounts for 75% of the new supply, while the remaining 25% comes from recycled material. Gold is a limited supply and cannot be created, meaning what we have on the planet will be the total amount of gold. Every year, around 120 million troy ounces (3,700 metric tons) of gold are added to the world’s gold supply. The best estimates suggest that about 205,000 metric tons of gold have been mined throughout history, with 50,000 metric tons discovered, but not yet extracted from underground reserves.

Gold is virtually indestructible. Pure gold cannot corrode, rust, or be destroyed by fire. Some of the gold in circulation today could have been mined thousands of years ago. A good example of gold’s reusability is Perth Mint’s public gold pour. Ever since 1993, they have held a public gold pour into a cast multiple times a day. This gold bar has been melted and recast over 65,000 times, without any destruction of the gold.

Gold is produced in countries around the world. China is the largest producer, accounting for 9% of output. Output is followed by Russia, Australia, Canada, and the United States. South Africa once accounted for a majority of the gold production, but their output has declined recently.

 

Silver Supply

Like gold, silver has also been mined for thousands of years and continues to be mined today. Estimations predict that over 1.5 million metric tons of silver have been mined throughout history. Today, more than 30,000 metric tons of silver are mined each year.

 One major difference between the supply of gold and silver is that approximately 90% of the silver supply that has been used was discarded without being recycled. This, along with an increase in industrial uses, has led the world’s above-ground silver stock to fall since World War II. 

The mining costs of silver compared to its price also make silver a less profitable mining business than other precious metals. There are very few silver-only mines, with most silver being mined as a byproduct in other mines (70%). This leads to the silver mining supply being vulnerable, as it must rely on the mining of other metals. The weakening supply trends have also led to a drop in global reserves of about 4%.  Silver production, however, did grow 5.3% in 2021 due to the recovery in output from the Covid-19 pandemic. Silver mining was led by Mexico, followed by China, Peru, Australia, and Poland.

 

Gold Demand

The demand for gold plays a significant factor in determining its price. Gold is the most demanded investment commodity. Central banks, investment funds, and individual investors all have a large amount of gold in their reserves.  Gold has emotional, cultural, industrial, and investment value, leading it to be demanded all over the world. 

Other than being an investment asset, gold is used in jewelry and manufacturing. Jewelry, although decreasing, is the largest sector of the demand for gold, accounting for 46% of the total gold demanded. Gold coins and bars demand the next most amount of gold, approximately 22% of the supply. Individual investors are demanding more as a result of high inflation and economic concerns. Central bank reserves have about 17% of the total amount of gold. Emerging market central banks are increasing their reserves, and European banks have stopped selling gold, creating a significant source of demand. Technology, electronics, and other uses make up the remaining 15% demand for gold.  All of these sectors help to increase its value as a precious metal. 

 

Silver Demand

In 2021, Silver demand strengthened to 1.05 Billion oz of silver. This leap is an impressive gain of 19% from 2020. The demand increase mostly reflected the resumption of manufacturing after the closures from the Covid-19 pandemic. Like gold, silver has many functions that lead to its demand worldwide.

Silver demand is increasing faster than its supply, which is creating a supply deficit. Its increasing demand is mainly due to its industrial need for green technologies. For example, silver inputs for solar panel production (photovoltaics) grew 13% in 2021. Green energy initiatives are growing and will continue to grow as more countries adopt green energy. The Russia-Ukraine conflict is also pushing countries to adopt a green, self-sufficient economy to promote energy security. This trend will drive the demand for silver further. 

As of 2021, Industrial demand accounts for about half of the annual silver demand. Silver is also used in electric vehicles, and it is forecasted to surpass photovoltaics in the future. Silver’s industrial demand has led it to have a strong correlation with the Energy Transition Index, an index comprised of energy transition ETFs (solar, renewables, carbon, wind, etc).

Other than industry demand, Silver has demand in photography, jewelry and silverware, and silver coins and bars. Silver demand in photography, jewelry, and silverware all increased slightly with the suspension of worldwide lockdowns during the pandemic. Silver coins and bars showed the most volatility, with a 36% increase in demand in 2021, representing a quarter of the quantity demanded of silver for the year. Silver supply trends will have difficulty keeping up with the increasing demand for silver, as can be seen by the physical deficit since 2019. 

 

If you are looking to be a part of the growing demand for gold and silver bars and coins, look around GoldClub Direct for the best value products on the market.

 

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClubDirect LLC.. and should not be construed as financial advice.

Government vs Private Mints

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Precious metals have been mined for thousands of years all over the world. After being extracted from the earth, these metals must be refined and processed to separate any and all impurities. Once the precious metals have been processed, they can be taken to refineries and mints worldwide to produce bars, coins, or other variations of precious metal products. There are two main types of mints that investors should know about, government mints and private mints.

 

Government Mints

Government, or sovereign, mints are controlled by the national government in which they operate. The main product these mints produce is coinage. Coins produced at sovereign mints are considered legal tender or otherwise commemorative. Each coin has a face value, enabling its use as currency. For precious metals, the intrinsic precious metal value of the coin usually is more than the face value, so they are rarely used as actual currency. Coins minted at government mints come with guaranteed metal purity and specialized security measures to provide authenticity as needed.

The United States Mint is one of the largest mints in the world. They have production facilities in Philadelphia, San Francisco, Denver, and West Point, with a bullion depository in Fort Knox and headquarters in Washington D.C. Products from the US Mint include mintmarks depicting where the coin was minted. A “P” is from Philadelphia, a ”S” is from San Francisco, a “D” is from Denver, and a “W” is from West Point. One of the US Mint’s most popular programs is the American Eagle, which includes gold, silver, platinum, and palladium coins. Other examples of sovereign mints include the Royal Canadian Mint, Perth Mint, Austrian Mint, Chinese Mint, and Royal Mint. Sovereign mints produce some of the most popular products, like the Canadian Maple Leaf, Austrian Philharmonic, Chinese Panda, UK Britannia, and South African Krugerrand. Sovereign coins usually carry a higher premium over spot price due to their collectibility. 

 

Private Mints

Private mints are owned by companies that produce non-governmental bullion products. The main two categories of products private mints create are bars and rounds. If you would like to learn more about the difference between coins and rounds, read our blog discussing this matter. Since there is no government directing their production, they are able to create products with their own branding and design. There are more variations with private mint products, as they can also be any weight, shape, purity, and metal content. There is still some regulation, as private mints must abide by the standards set by the London Bullion Market Association (LMBA) to be authorized for trading.

There are many prestigious private mints around the world. GoldClub Direct offers products from Credit Suisse, Valcambi, SilverTowne Mint, and others. These mints are well-renowned worldwide and offer great quality bullion at low prices. Private mint products tend to have a lower premium as their standards are not as strict as sovereign coinage. 

 

Should I buy from a government mint or a private mint?

Buying from a sovereign mint vs. a private mint is up to individual preference. Products from a sovereign mint will be a good addition to a portfolio for an investor that is looking for legal precious metal coinage backed by a national government. Products from private mints are well suited for investors who are looking to invest in precious metals with the lowest possible premium. GoldClub Direct stocks products from only the most respected government and private mints.

 

All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClubDirect LLC.. and should not be construed as financial advice.

What is a troy ounce?

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A troy ounce is a unit of measurement used to weigh precious metals. Many people often see “troy ounce” and think it is a fancy way to say “ounce” and that it is an equal form of measurement to the ounce we use in our daily lives. This is not true.  A troy ounce is a specific measurement, primarily used for precious metals.

The troy ounce can be traced back to Troyes, France during the Middle Ages. Troyes was known for its prominent trade market. Traders from all over the globe traveled there to trade goods, including gold and silver. In order to standardize trading, the merchants developed a system of weight for products going through the market. Their system is thought to be based on the Roman monetary system. Their currency was weighed in “aes grave” or what today we would call a pound. 1/12th of an “aes grave” was called an “uncia” or an ounce. Like the Roman monetary system, 1/12th of a troy pound is a troy ounce. 

As this system became more popular, it spread to other parts of the world. French-born King Henry II of England decided this system should be adopted by the British coinage system. It was not until the 15th century that we saw troy weights, as we know them today, being used. 100 years later in 1527, the British recognized the troy ounce as the official measurement of gold and silver. The United States adopted this standard in 1828.

 

Why do precious metals use the troy ounce?

Today, the troy ounce is the last used metric of the troy weighting system. This troy ounce is the primary weighing unit used at most sovereign and private mints around the world. This helps to ensure the purity of the precious metals as well as provide consistency among weights of various bars and coins. This measurement system has been used since the Middle Ages and provides constant weight standards throughout history. 

 

Troy Ounce vs Avoirdupois Ounce

When someone thinks of an ounce, they are thinking of the avoirdupois ounce. This ounce is used to weigh everyday items like sugar or grains from the grocery store. Although they have the same name, their weights are slightly different. This idea is similar to the difference between a nautical mile and a mile. One troy ounce weighs 31.1 grams while one avoirdupois ounce weighs 28.3 grams. A troy ounce is approximately 10% heavier than an avoirdupois ounce.

Although this might seem like a small difference, it is very important when buying and selling bullion. When you see the price of gold or silver per ounce, it is in terms of troy ounces. Most transactions are more than one troy ounce, so the difference in ounces could easily add up if you are not careful. Some sellers could list a product at 100 ounces, but the product would only weigh 90 troy ounces, leading the buyer to lose 10% of the value of the product. Very rarely will you see bullion in terms of avoirdupois ounces, but if you ever do, you can multiply that weight by 0.91 to find its weight in troy ounces. Make sure to check the item’s specifications to ensure its weight.

Even though a troy ounce weighs more than an avoirdupois ounce, an avoirdupois pound weighs more than a troy pound. This is because there are 16 avoirdupois ounces in an avoirdupois pound, but only 12 troy ounces in a troy pound. This could be confusing, but since troy ounces are only used for precious metals, there is no necessity to know the conversion to troy pounds.

GoldClub Direct weighs all of their products using troy ounces or grams. By understanding what a troy ounce is, buyers will have a better understanding of the precious metals market. If you have questions about the weight of the products or would like to learn more, do not hesitate to reach out at 1-800-700-4715.

 

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