Last year was exceptionally successful for our industry and for United especially as we continued to introduce novel products and innovative solutions for our customers around the world. New products were developed to meet the needs of jewelers and manufacturers including our new 19K gold formulations, lower karated gold casting grain ranging from 1K to 9K, as well as the continued success of our premium silvers such as SterliumPlus®, Platinet® and Silvadium.
On the refining side, we saw an increase towards the last two quarters of low grade refining as well as hard scrap. United continued to extend our reach adding new markets throughout Latin America, Asia and right here in the USA. Our sales team grew and with it, our production crew who together work to acquire new business and service both the new and existing customers. We also grew our team by adding on a new metallurgist, additional compliance personnel and office support members who work diligently to ensure every order and every refining lot is a smooth transaction for our customers.
As we look forward to another great year for the industry, all of us at United would like to extend our most sincere wishes for a happy and prosperous 2019 to you, our customers, vendors and friends.
President and CEO
In this issue of United News …
MARKET COMMENTARY… 2018 – A YEAR IN REVIEW
The precious metals market is generally looked upon as reactionary in nature in that it rarely leads the financial markets in price movement but merely responds to outside events and then "reacts" in a correspondingly appropriate manner. This supposition was quite evident in 2018 as both gold and silver prices were influenced by the seemingly omnipresent strength of the U.S. dollar. For the final three quarters of 2018, metal prices were held "in check" by the gains of the dollar - whose strength was assisted by interest rates being raised four times in 2018, as well as by investors who chose the greenback as their own "flight to quality" instrument during geopolitical events. The appreciation of the dollar, which strengthened over 8.5% from its lowest level of the year and 4.3% for the entire calendar year, was a major factor in the gold price losing 2% for the year.
The metals reached their yearly high early, with gold touching just above $1365 in April. Silver rose to its yearly high on January 25th, when it briefly reached $17.68. By August, gold had fallen to its low of $1160.25, while it took until November until silver made it low for the year, falling to $13.88 before rebounding quickly back above the $14.00 level.
Though closing the 2018 at $1,282.50, gold seems to have some early wind at its back as the equity markets have continued to flounder over concerns about higher interest rates, the economic outlook, future earnings, and consternation about the longer term effects of the U.S. - China trade/tariff situation. Volatility in the equity markets has exploded, and with it the corresponding safe-haven buying often associated with a benefit to the gold market.
The Federal Reserve has revised its interest rate outlook to conceivably as few as two interest rate increases (previously three) and has clarified that future rate hikes would be more data-dependent. Some of this may be dollar bearish as these higher rates may already have been factored into the dollar's value. The recent "subdued" economic reports have indicated possible evidence of economic slowing and may prompt a decline in the USD and provide medium term support for gold. Add into that the known and "yet to be known" geopolitical events which are realistically plausible through this calendar year, it would not be inconceivable to foresee a new, higher price range for 2019 in which gold finally can find more stability above the $1300 level.
TECHNICAL SUPPORT… GOLD & SILVER SOLDERING PROCESS
FITTING - Great care should be taken in the fitting of pieces to be joined. Make sure the surfaces are smooth, even, free of burrs and fit tightly. This will assure a strong neat joint requiring less finishing. Remember, "SOLDER WILL NOT FILL GAPS."
CLEANING - All parts being soldered must be thoroughly cleaned. The joint areas and solder must be clean, free of oxidation, oil, grease, polishing compound and tape adhesive. If the area around the joint has a high luster, roughen the surface with a scotch brite pad.
PROPER SUPPORT - Clamps or jigs should be used to align and hold the objects being soldered. This will help prevent movement or shifting of the pieces during the soldering process.
FLUXING - The entire object should be given a fire coat of boric acid and alcohol with a brush. The object is then gently heated to form a protective coating to resist oxidation. The joint areas should be well coated with solder flux to allow for burn off during the soldering process. The Battern's type liquid flux will only provide a thin coating and more flux may need to be applied to protect the solder joint. Paste fluxes can give better protection on some jobs as they provide a thicker coating.
HEATING - Use a slightly reducing flame (softer flame). Let the heat of the objects being joined flow the solder. Don't try to force the solder to flow with the torch flame as this usually results in pitting or a poor quality joint. Use a steady even heat to the surrounding metal to a dull red color, and then concentrate the heat on the solder joint area. Do not overheat. It is best to keep the torch moving to provide an even heat. It is best not to use micro torches for ring sizing as the small intense flame usually overheats or oxidizes the joint. Remember, "SOLDER FLOWS TOWARD HEAT."
CLEANING & PICKLING - Flux residue can be removed in hot water, a brush can be used to speed removal. Oxidation on the soldered objects can be removed in the pickle solution. Hot "Sparex" safety pickle is the most commonly used pickle solution and effectively removes any surface oxides. A 10 to 20% Sulfuric acid solution or a 30% Food Grade Phosphoric acid solution can also be used although "Sparex" is a much safer pickle.
REFINING MATTERS… FOCUS ON THE PAWN INDUSTRY
The pawn industry enjoys a unique relationship with United PMR. As the largest US-owned primary refiner in the country, United exclusively services the jewelry industry. A major source of jewelry for recycling and refining is the pawn industry. Dating back to ancient history, the practice of loaning money on portable security has outlasted the test of time. Pawnshops, because of their niche services and customer-friendly business model, have provided much needed funding to customers when other options such as bank loans weren't available to people.
Among the many items purchased and/or pawned, jewelry has always been a staple in the pawn industry. As jewelry items come out of pawn or the holding period for buys, many shops send their scrap to United for refining. Our commitment to the thousands of pawnbrokers we serve remains true: a fast turnaround with accurate and honest results.
United doesn't deal in stones except to process your stone removal lots. Once separated from the metal, the stones are cleaned and returned to our customers. This model allows our customers to rest easy knowing the stones they sent in will be returned without the added pressure of the refiner bidding on the parcels they're holding in-house. At United, our business revolves around metals and that's all we're interested in purchasing. Their many reputable stone dealers out there who would gladly buy your stones. As your refiner, we're just looking to service your account and process your metals.
United is a proud member of the National Pawnbrokers Association as well as various pawn organizations and associations across the country. We look forward to seeing everyone at the national convention and regional shows throughout 2019.