Gold’s 3% rise in February flattened in March, ending the month down less than 1%. Silver continued to push, up 6% on the month. Platinum rose 7% and palladium was the month’s biggest gainer, ending up 10.5%. Gold peaked to begin the month, up 5% off its lows. Silver peaked in the first third of the month, up 8% off its lows. Palladium and platinum both finished strong, claiming their highs at month’s end.
Gold/Silver Ratio
Silver's strength reduced the gold/silver ratio — the quantity of silver (in Troy ounces) required to obtain one ounce of gold. The ratio started March at almost 68 and by month’s had fallen to below 64. This is down from the same point a year ago, where the ratio settled below 71 to end March 2009.
| Mar Spot Price Summary (U.S. Dollars) | ||||
| Silver | Gold | Palladium | Platinum | |
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| High | $17.67 | $1145.72 | $488.50 | $1653.50 |
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| Low | $16.36 | $1086.65 | $436.00 | $1544.00 |
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| Open | $16.65 | $1121.51 | $436.50 | $1546.00 |
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| Close | $17.56 | $1113.34 | $482.50 | $1649.00 |
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CONTENTS
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Market Summary - March 2010 |
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Ross Hansen: Romancing the Economy, but Killing the Mood |
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David Ballestrasse: Security and Precious Metals |
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Seasonal Buying Strategy |
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Precious Metals Worldwide |
ABOUT NORTHWEST TERRITORIAL MINT PRECIOUS METALS MONTHLY
Combining market summary information and insightful analysis, this publication offers an insider’s perspective on the numbers, trends, and moves that drive the precious metals market, allowing you to stay on top of the most important investment news each month without investing hours of your precious time.
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Think we’re right? Think we’re wrong? Know something that we don’t? As always, your feedback is welcome. Send us an e-mail with your questions about investing in precious metals or request your very own Investor Guide, a free resource packet chock-full of useful information.
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CHARTS
The following charts display the daily low and high spot price of each metal for the month of March, 2010. Source: Northwest Territorial Mint spot prices as posted at bullion.nwtmint.com.
The following charts display the daily spot price range of each metal for the six months ending March 2010.
Romancing the Economy, but Killing the Mood
by Ross Hansen
Spring is in the air and romance is everywhere…even for the President. Like a smooth-talking Don Juan, he’s been whispering sweet nothings about the state of the economy in our ears. Don Juan Obama tries to romance the American people, using pleasing words like “Job Creation” and “Economic Stimulus.”
But look past the pick-up lines and you’ll see his evening jacket has the stain of a $1.5 trillion deficit on it and the whiff of bailout cologne is hovering around his head.
The president talks a good game, but his legislation is killing the mood of American business, and it ain’t doing much for the average citizen either. Higher taxes and higher energy and health care bills – if you’re a worker or business owner, you don’t want this kind of romance.
Here are the consequences of this economic one-night stand:
No Long-Term Jobs, No Love Connection
Obama talks glowingly about job creation – he pointed to March’s job numbers, the best in nearly three years we’re told. The problem in this picture is those jobs are mostly temporary due to the 2010 U.S. Census hiring. When those positions are gone in a couple of months, I doubt the picture will be as rosy.
Instead, let’s look at the employment data that really matters -- underemployment. This measure of those who are working part time jobs or have given up looking currently points to the nearly one in five Americans who aren’t gainfully employed (according to one Gallup estimate). The situation is even worse for the long-term unemployed. The New York Times reported the average length of time the jobless have been out of work has reached 31 weeks – the longest period in over 60 years.
And it’s not just that the jobs aren’t there, it’s that the ones that were there are probably never coming back. Over 8.4 million jobs that have been lost since the “recession” began. These jobs are gone and may stay gone for a very long time.
This “Recovery” Wears Bad Cologne and a Cheap Suit
The Dow is up and the pundits can’t help falling in love with the recovery, despite the evidence against it. They breathlessly point to the stock market’s rise since the lows of March 2009. “Green Shoots!” and “Less Bad!” These are the proclamations that are supposed to get us all hot and bothered?
The recent rise in equities is not occurring through real investment but speculation. The Federal Reserve’s recent report found that credit conditions have not improved for most. Businesses are still unable to obtain credit while banks stick to stricter standards. Banks are afraid to lend and not interested in the microscopic return on Treasury Bills. So they amble to the stock and commodities market and playit like a slot machine. This kind of one-night stand is big on thrills and short on common sense.
Consider Mr. Right, not Mr. Right Now
All these ill-advised impulses are inflating the market and could turn romance into tragedy in the blink of an eye. And don’t count on Don Juan Obama and the Federal Reserve to save the day. They’re out of options and they know it. If the economy heads south again, which is looking increasingly likely given the country’s record deficits, hold on to your shorts.
There’s only one financial match that you can count on when the romance ends – precious metals. For more than 5,000 years, mankind and real, tangible wealth have been a relationship with staying power.
After careful research and consultation, investing a portion of your wealth in gold, silver, platinum, and palladium is a long-term relationship you’ll be glad to have…especially when you wake up in the morning.
Ross B. Hansen
CEO, Northwest Territorial Mint
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Ross Hansen is the founder and CEO of Northwest Territorial Mint and has more than 30 years of experience as a precious metals trader and broker.
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Security and Precious Metals
by David Ballestrasse
Owning precious metals means storing them safely. We asked an expert in safes to share some important things to know when looking for yours.
Investors in precious metals have one challenge that those who prefer most other means of investment can avoid — safe storage of their wealth.
If you have cash, you can put it in a bank, which will secure it for you and often pay you interest. Your deposit with your bank is protected by insurance — specifically the Federal Deposit Insurance Company, although it's limited to $250,000. And if the bank gets robbed, the stolen money isn't yours.
If you have stocks at a brokerage, the Securities Investor Protection Corporation insures your equities for up to $500,000.
You might have stock certificates or jewelry or other valuables in a safe deposit box at your bank. They are probably safer there than in the average home, but they are not insured against theft or loss by the bank, and may not be covered by your homeowner's policy.
When it comes to precious metals, there may be no option better than a safe. It's as important as actually buying the metal. If you're like the many investors who have recently begun to buy silver or gold, you probably haven't had a lot of experience with safes, except for the ones on television or in your hotel room.Safe at Home
To start with, not all safes are... well, safe. The most commonly purchased safes can be forced open in less than two minutes by an amateur with a few hand tools. All they have to do is take a crowbar to the door or frame. Too many safes are built out of extremely thin metal — sometimes as thin as 22-gauge (roughly 1/16 inch), which is no thicker than a matchbook cover. Even a safe with 12-gauge (not quite 1/8 inch) steel walls can be broken into with a pry bar, axe or a pick in just a few minutes. The locking bolts (those big steel cylinders that secure the safe door) cannot be easily deformed -- but the thin metal supporting them can.
A safe is probably not the type of item one should just buy and bring into the house. If you can load it in your car and take it into your house yourself, a thief can just as easily remove it or quickly pry it open with simple hand tools. A safe secure enough for precious metals storage will require professional installation.Weighty Investment
The cost of a safe worth owning is going to start around $1,500 (depending on the size) but to get level of security adequate for larger amounts of precious metals you can easily spend several times that.
And they’re heavy. A quality 60-inch-high, 32-inch-wide safe with quarter-inch-thick walls will weigh about 1,600 lbs. and that’s before you add your very dense metal. A ton is about as heavy as the average floor will hold without reinforcement -- which can easily cost an additional $300 to $1,000. A basement or garage with a concrete floor can handle a larger, heavier, more-secure safe. A 60-inch-high x 32-inch-wide safe with one-inch-thick sidewalls can easily weigh 3,000 lbs., but will provide much more security.
Testing and Temperature
Commercial insurance companies often require Underwriters’ Laboratories ratings labels for insurance. A TL-30 rating means that the safe withstood a series of tests for 30 minutes. However, the testing procedures are inconsistent, and not every good manufacturer spends the money for the test, even though its safes may be superior. A knowledgeable safe specialist can show you the differences.
If you're going to put anything besides metal into your safe, fire protection will also be important. You want a safe that not only maintains its integrity to a high temperature, but one whose internal temperature does not threaten the paper, plastic, or other material within.
What to Look For:
LOCKS
•Top-quality mechanical locks (spin-the-dial) are slower and more complicated to operate but have proven to be more reliable than electronic locks (simply push buttons as on a phone). Some electronic locks can be susceptible to an electromagnetic pulse (EMP).
•Quality electronic locks are a good option for quick access and can allow for multiple user codes and enable the user to easily change combinations.
•If you have weak eye sight or a shaky hand an electronic lock will make using your safe easier and more enjoyable.
PROTECTION
•Hardened steel impregnated with ball bearings to protect the lock and critical parts of the mechanism from drill and saw attacks.
•Deflector plates (hardened steel plates) placed at an angle in strategic spots to protect locks and mechanisms.
•Re-locker systems built in to the safe to keep it secure even if the lock is compromised.
CONSTRUCTION
•Safes using vermiculite or other poured in insulation similar to concrete for fire protection typically offer better security, as well as fire protection, compared to similar-weight safes fire-lined with sheet rock.
•To make the safe more visually pleasing the outside seams are often ground down, weakening the weld. Make sure the inside is welded on this type of safe.
•Be sure that the difficult-to-see parts are of the same sturdy construction as what you can see. Many safes are made to look thick but are actually thin sheet metal formed around sheet rock. To the uneducated buyer this looks good but offers little security.
•The hard plate, deflector plates and protection systems should be made of metal specially treated to make it even harder to cut or drill through.
My recommendations:
•Always go with more steel, outside and in. I like a safe to be at least 3/16ths of an inch thick for small amounts of precious metals, and up to an inch or more for larger amounts. Make sure the door frame and supporting parts you cannot see are of similar thickness.
•Make sure that the lock is protected. A good lock is not worth much if the plate around it can easily be damaged.
•Make sure there is redundancy, so that if the primary lock is defeated, backups will still prevent the safe from opening.
•Buy larger than you think you need. Most customers tell me they wish they had more room in their safe, and many are repeat customers.
•As a rule of thumb, spend on a safe an amount equivalent to between 5% and 15% of the value of what you're protecting.
•Get good advice from a professional. Learning by mistake on the security of your investments can be extremely costly.
In the end, metal quality, thickness and construction methods (how the seams are formed or welded, the strength of the mechanism, the correctness of the door fit, etc.) are what keeps your investment safe.
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David A Ballestrasse and his wife Patty started Northwest Safe Company, located in Enumclaw, WA, in 1988 after being unable to get knowledgeable help when they were purchasing a safe for their home. David is involved in testing and evaluation of safes and regularly advises manufacturers regarding product design and features.
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Seasonal Buying Strategy
by Northwest Territorial Mint Staff
While past performance doesn’t always predict future results, a look at gold price trends over the past five years may reveal a potential buying opportunity for investors in the months ahead. The months of May, June, and July have typically been viewed as a low point for precious metals prices.
A seasonal buying strategy, like any investment plan, should be researched before deploying. What may be true one year may not be the next. However, careful analysis of past trends can certainly reveal some long-term precious metals investing opportunities.
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Precious Metals Worldwide
News & Trends from Around the Globe
China gold consumption to Double in Decade Says World Gold Council
Chinese demand for gold is set to double in tonnage terms within just ten years according to the WGC. Chinese gold consumption was worth more than US$14 billion in 2009, equivalent to 11% of global gold demand. Over the past five years, demand for gold has increased at an average rate of 13% per year in China.
Silver and PGMs May Outperform Gold says BMO Commodity Analyst
After a very strong 2009, BMO Capital Markets Global Commodity Strategist Bart Melek, says gold and other precious metals are "projected to do very well over the next several years," according to Mineweb.
Melek suggested that silver, platinum and palladium will outperform gold "as they benefit from quasi-money status and their high usage in industrial applications as manufacturing recovers." Melek also suggested demand rebound and sluggish supply are the possible reasons PGMs and silver look poised to outperform gold.
U.S. Mint Silver Sales up 40% in 2010
Unprecedented demand for U.S. Mint silver coins pushed sales 40% higher in January and February 2010 according to sales figures from the U.S Mint.
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Track Your Precious Metals Investment with MyBullionTracker
Add power to your precious metals investments with MyBullionTracker.
This high-powered software application allows you to track gold and silver from the safety and security of your own computer desktop, all in near real-time.
MyBullionTracker allows you to:
- Receive instantaneous spot and currency value
- Research, store and track all your bullion investments in one convenient place
- Build price charts from your own data so you can anticipate trends
- Safely and securely store your data so you keep your information private.
Click here to learn more about this powerful, new precious metals software from Northwest Territorial Mint.
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Information provided here should not be considered as advice or as an offer or enticement to buy, sell or trade. The contents of this publication, including any opinions and analysis, are strictly intended for educational use. Opinions expressed in bylined articles are those of the individual author and do not necessarily reflect the views of Northwest Territorial Mint. Furthermore, information obtained from all quoted sources is believed to be reliable and is offered in good faith. Northwest Territorial Mint does not accept responsibility for any trading losses incurred from reliance upon this information. Readers are encouraged to consult with a financial advisor before making major investment decisions.
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