I would like to wish all our valued customers and readers of our quarterly newsletter a Happy & Healthy New Year. Gold has trended higher since the beginning of the New Year but there remains a great deal of uncertainty for the precious metals markets moving forward. Many analysts feel precious metals will move in a downward direction in the coming months; lower markets may help stimulate jewelry sales. United`s product sales were robust in 2016 and our refining ounces surpassed our quantities from the previous year. United will continue to do its part in researching and developing innovative products and processes with the hope of strengthening the demand for jewelry in 2017.
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In this issue of United News …
Differences Between Traditional Sterling Silver and United Deoxidized Sterling Silver
All items made with Sterling (925) Silver must contain 92.5% Silver and 7.5% other metals. Traditional Sterling Silver is made with 92.5% Silver and 7.5% Copper. The drawbacks with traditional sterling are rapid tarnishing and fire scale or fire stain. The higher copper content in traditional silver causes faster tarnishing due to the initial formation of copper sulfide first then over time a silver sulfide will form on the surface of the traditional sterling silver. Fire scale or fire stain often forms due to the formation of subsurface copper oxide formed during melting or annealing. The fire scale or fire stain is very difficult to remove from the finished sterling silver items as once it forms it can extend to a considerable depth. Re-melting the sterling silver with fire scale often makes it worse as the copper oxides contained will disperse into the metal.
United began working on different formulations for deoxidized sterling silver in 1990. We used 92.5% Silver, reduced the copper content and added other metals such as zinc, tin, indium along with a silicon deoxidizer. The new formulations got rid of the fire scale or fire stain, reduced porosity and greatly improved the tarnish resistance of the finished items with the reduced copper content. United was granted several patents in 1991 for the new sterling silver formulations. Over the years we have made a number of improvements in our deoxidized sterling silver alloys and now offer a number of casting grains, sheet, wire, sizing stock and tubing. We also have our deoxidized sterling silver master alloys for customers desiring to use their own fine silver to make deoxidized sterling silver items. Check with your United Sales representative for more information and pricing.
Karated Grain v. Mixing Yourself
Each jeweler has their own preference – mixing fine gold with alloy or using karated grain. The choice is really a matter of preference. At United, we offer both options to meet the needs of every jeweler.
Karated Grain offers peace of mind for manufacturers who need to ensure accuracy in their finished goods. We notice larger manufacturers trending towards purchasing karated grain since they can certify the karat of their merchandise. United's karated grain is always certified for exact purity.
Mixing grain with alloy is still a standard practice in the industry. We've seen an increase in alloy sales where jewelers are over-karating pieces to ensure their QC standards are exceeded. Alloy sales are also very popular in overseas markets where fine gold and fine silver are readily available.
Whatever your choice, United has grain for your manufacturing needs. For more information or to request a new catalog, call United today at 1-800-999-FINE (3463) or email our customer support team at Sales@UnitedPMR.com.
Market Overview - End of 4th Quarter 2016
Many analysts predicted that the election of Donald Trump as President of the United States would result in gold price moving $100 - $200 higher (moved to hard assets) and the Dow Jones Industrial Average moving lower by 2000 points (economic turmoil). Well, ironically the "deep thinkers" of the market were correct in the scope of the market moves - unfortunately it was the wrong direction in both cases.
Trump's stunning victory did move the market in the predicted direction for around twelve hours before
reversing themselves on implied optimism that the policies of the incoming administration may be more positive toward business and reduce government interference in business affairs. While equities may like that kind of policy tone, the metal markets did not. Gold fell to an eleven month low of $1123 by the middle of December as the Dow flirted with the 20,000 level. The FOMC did finally raise interest rates in December as expected but did surprise the precious metals market with the announcement by Fed Chair Yellen that there would be three rate increases in 2017 – not the two previously expected. That statement was the one which rallied the U.S. Dollar to a thirteen year high and pushed gold below the $1150 level for the last fortnight. So much for predictions – including the one from me that much of this interest rate debate was "built in" and the downside was "well supported".
As we open 2017, gold has appeared to have built a base in below the $1130 level and may be poised for a modest upside move in the first quarter of 2017. The key word for the beginning of the year is "change" – and not President Obama's type. We will have a new administration with new policies and proposals. There will be fights in Congress over spending – where it goes and how it is spent. There will be battles over the Supreme Court nominee. The U.S. Dollar, often on a thirteen year high as of late, is due for, at minimum, a technical correction. Thus, at the same time the Fed will be monitoring the economy for reasons to raise U.S. interest rates to quell nascent inflationary trends – a result of increased government spending. On a geopolitical front, the Middle East is heating up again and Syria is still a major hotspot with Bashar al-Assad in the center. Iran will continue to cause increased concern in military and nuclear ways – especially if the agreement signed last year is "ripped up" as promised by then President Trump.
While not to say that there is no more room for the downside, one would surmise that the uncertain (yet tremendously fascinating) times we are about to embark on should be one in which all facets of the financial merry-go-round will have a spin. So having entered the carnival and gotten onto a horse, let us look to an upside range back to $1250 with a downside limited to a failure to break below $1100. "Choppy" will be the catchphrase of late winter with news and trader overreactions having many riders "hanging on" for stability. We will see if gold still retains the commodity banner of refuge by providing "certainty in uncertain times".
Best of luck for a prosperous 2017!!