Gold Investing Resources - Gold Bullion, Silver, Gold Coins, Precious Metals

Gold to Hit $2000 This Year?

2013-02-23T21:36:00.000-08:00

Kerry Hall at Mining.com offers this note: Commodities expert and precious metals forecaster Eugen Weinberg from Germany's Commerzbank discusses how gold buying will pick up in the second half of the year and push prices towards $2,000, in an interview with Bloomberg TV. While there is no compelling reason to own gold at the moment, since the Euro crisis is abating and inflation hasn't picked up yet, he thinks the investment interest will come back and continuous buying by the central banks will elevate the price. "Going in like a bear, coming out like a bull" is how Weinberg characterizes the next 12 months for gold. At the moment, gold havens aren't needed because other commodities have recovered since last year and are likely to do so further this year. Overall, he believes sentiment is improving with investors' risk appetite coming back. As well, corporate clients are becoming more upbeat about the future.

Gold and Silver Prices Pop as Investors Seek Safety

2011-11-07T19:32:00.000-08:00

Gold prices popped Monday despite a stronger U.S. dollar as stronger physical demand and safe haven buying kicked in.

Gold for December delivery jumped $35 to close at $1,791.10 an ounce at the Comex division of the New York Mercantile Exchange and were climbing higher in after-hours trading. The gold price has traded as high as $1,787.80 and as low as $1,754 an ounce.

Silver prices closed up 74 cents at $34.82 an ounce while the U.S. dollar index was slightly higher at $76.93.

In Europe, it's Greek redux, with 10-year Italian bond yields soaring over 6.6%, a euro-record high, Prime Minister Berlusconi losing three party members in a week and the lower house preparing to vote on 2012 budget issues on Tuesday, which, if defeated, could trigger another confidence vote for Berlusconi.

Now that Greece is shifting to an interim government, which should approve austerity measures and its next tranche of bailout money, investors are focusing on the drama unfolding in Italy. According to Kitco's gold index, gold demand was up more than $43 and the rally was shaking off a stronger U.S. dollar, leaving the overall price up $41.80 an ounce.

The latest commitment of traders report for the week ending November 1st,showed that speculative traders added 1,003 long contracts and reduced their short positions by 9,221 contracts, which means some of gold's 3% two-day rally last week was short covering and modest long exposure.
James Moore, research analyst at FastMarkets, says that current safe haven buying could push prices "towards the $1785-1800 area in the coming sessions." Gold was rising in all currencies with the strongest gains coming in the swiss franc -- gold was up 4.25% -- on weekend reports that the Swiss National Bank was ready to take further steps to devalue its currency. The bank has previously pegged the swiss franc to the euro at an exchange rate of 1.2 francs per euro, but could raise the rate if need be.
Barclays Capital also reiterated its bullish stance on gold "we expect near-term buying interest ... to underpin a move higher. A break above resistance at $1,775 would confirm our bullish view toward our target near $1,840" an ounce.

Rumors were also flying this weekend that Germany or other Eurozone central banks would be forced to sell gold in their reserves to help increase the firing power of the European Financial Stability Fund, or bailout fund. Germany is the second-largest holder of gold in the world, with 3,401 tons, and holds the third most gold as a percentage of its reserves, behind Greece and Portugal, according to the World Gold Council.
At current prices all of Germany's gold would net $193 billion, well short of the trillion plus dollars officials were hoping to expand the bailout fund to.

German officials reportedly said Monday that the gold will "remain off limits," but gold in the weaker EU nations could be used as collateral. "Gold's value as money and as a strategically important monetary asset is being slowly realized again," says Mark O'Byrne, CEO of GoldCorp, a bullion dealer.

Gold mining stocks were popping Monday with many like Randgold(GOLD) jumping to new 52-week highs . Kinross Gold(KGC) was adding 3.21% to $14.79 while Yamana Gold(AUY) was up 1.29% at $16.47. Other gold stocks, Agnico-Eagle(AEM) and Eldorado Gold(EGO) were trading higher at $46.95 and $19.33, respectively.

--Written by Alix Steel in New York.

Gold Prices Could Move Higher as Europe Stabilizes

2011-10-15T17:14:00.000-07:00

Prices could move higher next week

B G Shirsat / Mumbai October 16, 2011, 0:45 IST

Gold prices could rise next week on the back of stable cues from Europe and better-than-expected economic data from the US. The Kitco News Gold Survey suggested strong rally in gold next week with 21 participants expecting prices to go up, while three believe prices could fall and one says prices will remain sideways or unchanged. On the week, December gold futures prices on the Comex division of the New York Mercantile Exchange settled at $1,683 an ounce — up 2.9 per cent on the week.

The trading pattern on Friday in the most-active December gold contract on the Comex division of the New York Mercantile Exchange, suggested strong up move in gold futures around $1,704. The lower-end support for December futures is expected to come at $1,652, the market picture chart suggested. TPO counts above (35 per cent) the point of control (PoC-1,678) hinted at a strong support for gold below $1,675. The weekly volume weighted an average price of $1,674, mostly through buy-side indicating strong opening on Monday.

Trading in call and put options remained steady on account of range-bound trading last week. Selling was witnessed in the $1,700-strike December series call options at a premium of $46. The $1,650-1,700-strike put saw sell-side bias as traders expected gold to go substantially below $1,650 and then probably move up above $1,700.

Comex gold futures have seen choppy trading on a day-to-day basis recently. However, the long-term monthly continuation chart for nearby Comex gold futures showed the bulls are still in full technical command, says Jim Wyckoff, technical analyst of Kitco News. Prices have been treading higher for 10 years and there are no long-term technical clues the uptrend in prices will end any time soon.

Gold’s rally from a more than two-month low may be capped at about $1,730 an ounce, as trading turnover declines, leaving the metal range-bound, according to technical research by Barclays Capital. “Falling daily volumes in gold suggest that the up move is unsustainable,” said the report made available on Thursday. Bullion dropped 11 per cent in September, the most since October 2008, which spurred speculators to cut their net-long position to the lowest since February till October 4, according to data from the Commodity Futures Trading Commission.

GOLD SOARS ABOVE $1800 PER OUNCE - NO END IN SIGHT!

2011-08-10T19:22:00.000-07:00

Gold price soars above $US1800/oz
Niko Kloeten | Tuesday August 09, 2011 | 13 comments

Gold has hit another milestone, shattering the $US1800/oz barrier, rising more than $US60 in less than a day's trading.

The spot price of gold is trading at about $US1811/oz after being under $US1750/oz less than a day ago.

New Zealand Mint head bullion trader Mike O'Kane says the recent rise in the price of gold has caused a surge of interest from Kiwis, with a large increase in the number of new buyers.

The price of gold has hit a new record, shattering the $US1700/ounce milestone and showing no signs of slowing down as global investors look for a safe haven.

The spot price of gold reached $US1750/ounce this afternoon and for New Zealand investors the gain is being magnified by the fall in the New Zealand dollar.

Mohendra Moodley, a director of Australian fund manager Taurus Funds Management, says New Zealand gold buyers are benefiting twice, due to gold being denominated in US dollars.

This is because the gold price in US dollars is rising while the New Zealand dollar falls against the greenback, raising the value of gold holdings in New Zealand dollar terms.

Although gold price rises are sometimes “diluted” by rises in the dollar, he says during times when markets are “stressed”, such as in 2008, the New Zealand dollar tends to go down while gold goes up.

"Gold has gone up 11-13% per year in New Zealand and Australian dollar terms in the last 10 years, compared to 19% per year in the US, so returns have been diluted but not by much."

Mr Moodley says inflation and interest rates play key roles in the demand for gold, with American investors who get near-zero interest rates from banks finding it particularly attractive.

“The opportunity cost is always the level of interest rates in any country,” he says. “Gold trades inversely to real interest rates – the lower the real interest rates the better the gold price.

“In markets where interest rates [such as New Zealand and Australia] are higher the opportunity cost is higher.

“Having said that, it also depends on the level of inflation – for instance, Chinese investors have high interest rates but also high inflation, meaning the real interest rate is low.”

Even though New Zealanders get better interest rates on savings than in many other countries, Mr Moodley says gold is still an attractive prospect given its recent performance.

“If you’re getting 3-4%, the question is, would you rather be earning 15-20%? I’d take that.”

Mr Moodley says gold run of success has resulted in increased interest in Australia and New Zealand.

“There is some interest coming out of this neck of the woods but most of the global demand is being driven by Asia, particularly India and China, Europe and of course the US.”

It's Time to Buy Silver!

2011-04-26T19:39:00.001-07:00

Sell Gold, Buy Silver
by Robert Kiyosaki
Friday, January 14, 2011
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You may have noticed that gold is hovering around $1,360 an ounce (sliding recently after a big run-up) and silver is around $30 an ounce. That means in November of 2010 alone, gold increased in price by 2 percent and silver by 14 percent. Investing in gold and silver beats saving money in a bank earning less than 0.1 percent per month. Once again, this is further evidence that savers are losers as central banks of the world print trillions of dollars.

With paper money declining in value, millions of people are finally climbing on the gold wagon. Everywhere I go, I see signs that say, "We Buy Gold," calling out to people desperate for cash to trade in their gold jewelry.

For years now, I've said that silver is a better investment than gold.

To quickly summarize, here are a few reasons:

• Silver is consumed and gold is hoarded.

• Silver is a precious metal and is also an industrial metal that is used in electronics, medicine, water purification, and jewelry

• Today stockpiles of gold are increasing while stockpiles of silver are decreasing. (This means there's an abundance of gold and a shortage of silver).

• The gold/silver ratio is historically 14:1. This means that if gold were $14 an ounce then silver would $1 an ounce. Today, the ratio is approximately 50:1. Silver is extremely underpriced. If silver held to the historic 14:1 ratio, with gold at $1,400 an ounce then silver should be $100 an ounce -- not the $30 an ounce it is today.

In my opinion, when you combine the fact that there's a shortage of silver and that it's underpriced, silver is the safest and best investment todaybut not for long.

A logical question is, "Why is the price of silver suppressed? Why is silver so much lower than gold?"

There are two primary reasons for silver's low price.

Number one, central banks buy gold, not silver. To bankers, gold is money and silver isn't. Today central banks are buying tons of gold, with India being one of the biggest buyers. This elevates the price of gold, leaving silver the bridesmaid but not the bride.

The price of silver is manipulated. The price of silver is intentionally kept low. While this is criminal, it's not illegal. Yet for decades, COMEX, the commodities exchange, has been in cahoots with the biggest silver investors at the expense of the little silver investor. This is about to end, thanks to some regulatory changes that may offer the biggest opportunity for silver investors between January and March of 2011.

What has changed?

Rumors are flying that more than 25 lawsuits have been filed against commercial investors such as JP Morgan and HSBC, accusing them of price manipulation to keep the price of silver artificially low.

The Commodities Futures Trading Commission (CFTC), which is to the COMEX what the SEC is to the New York Stock Exchange, has passed a new law which will force COMEX to play fair, forbidding such massive short positions on silver.. The actions of the CFTC are one more reason for last November's 14 percent price rise in silver. The price manipulation of silver is about to end.

How was the price of silver kept low?

Big investors short-selling silver have kept the price low. For decades, the biggest players in the silver market, commercial investors such as JP Morgan and HSBC, have taken massive short positions on silver.

What does short selling mean?

Short selling (shorting) means you sell something you don't own. Simply put, you borrow something to sell with the promise you will return what you borrowed.

It's not much different than going to your neighbor to borrow 5 pounds of flour and promising to return 5 pounds of flour in a month.

Shorting is done in all markets: commodities, stocks, bonds, and real estate.

The commercial banks, generally large banks such as JPMorgan and HSBC, sell borrowed silver from the COMEX and pocket the money. The banks use that money to invest in other higher-returning investments such as stocks or bonds.

Meanwhile, COMEX has earned billions of dollars from the interest on the borrowed silver. The commercial banks and the COMEX both profit from this large short position of silver, the larger the better.

Now, with the new CFTC law, the commercial banks will need to buy back silver and return it to the exchange. The problem is not a money problem. The problem is a shortage of silver.

When the commercial banks start buying rather than selling silver, this will cause the price of silver to rise, increasing the costs to replace the silver. It's simple supply and demand.

This massive big short has left the banks with a large margin-call when a broker asks an investor to bring an account up to a minimum position. How big is the margin call in silver? It is estimated that the total net short position on the COMEX is 550 million ounces of silver. And that's just on the COMEX. Worldwide, it's estimated that the short position is 2 billion to 3 billion ounces of silver.

If this is true, that means 2 billion to 3 billion ounces of silver have been borrowed and need to be purchased and replaced.

Again, the problem is not a money problem. The problem is that there's not enough silver to cover the margin-call.

When will this margin-call occur?

The laws passed by the CFTC and Congress take effect by March 2011.

If the laws aren't repealed, the big commercial banks will be forced to buy silver to replace the silver they've been borrowing. When they buy, the price will go up.

And if the price of silver goes up during this buying period, their losses will grow like an atomic mushroom cloud. This means that the big banks and COMEX will be doing everything possible to keep the price of silver low so that they can buy silver to cover their exposed positions. In the next two to three months, you will probably see huge swings, up and down, in the price of silver.

I've been buying silver for years, starting at under $4 an ounce. One year ago, silver was about $17 an ounce. Today it's about $30 an ounce. I believe $50 to $60 an ounce is possible for 2011.

I believe it's possible to see the price of silver gain more in one year than it has gained in the past twenty years.

As I close this column, I advise you to read this great interview of Ted Butler, the person who has for years single-handedly been demanding Congress to force the COMEX and big commercial banks to play fair.

As Ted Butler states, "It is time to sell gold and buy silver."

From Yahoo! Finance

Silver Has More Room to Fly Relative to Gold Prices!

2011-04-20T21:23:00.000-07:00

You know silver’s doing well when the commentators start giving it the "gold" treatment. Silver’s recent rise has been so spectacular that it’s caught many investors off guard. It’s natural to be skeptical when you don’t know the fundamentals driving strong performance, and many pundits and commentators have been quick to downplay it as a result — much like they do towards gold when it enjoys a run. Silver is also an awkward metal for them to categorize. Is it a commodity, a monetary metal, or both? And which side is driving demand? If it’s industrial demand, that’s ok, because that’s bullish. But if it’s investment demand for silver as money, well then that’s sort of bearish, isn’t it? The fact remains that most commentators have failed to grasp the monetary shifts that silver is signaling today, and in doing so they’ve failed to appreciate just how high it could actually go.

The financial media’s failure to grasp the benefits of precious metals ownership continues to perplex us, and it’s not just the commentators who are prone to perpetual disbelief. The sell side analysts are equally as irresolute. According to Bloomberg, the consensus silver price forecast by so-called experts for 2011 is $29.50, representing a 31% discount from the current spot price. This same group of analysts also predicts prices will decline another 25% in 2012 and a further 9% in 2013 to $20 an ounce. When you consider that the silver price has appreciated by over 21% annually over the past 10 years, these forecasts suggest a very dramatic change in the long-term trend. Will this reversal come true? Probably not. These were the same analysts who predicted that spot silver prices would average $18.65 this year — meaning they’ve missed the mark by over 100% thus far.

We don’t mean to bash the silver analyst community, and there are several whom we highly respect, but it is important for silver investors to appreciate that these price forecasts are being plugged into financial models that dictate equity valuations. These models are used by traders, bankers, analysts, and portfolio managers to derive valuations for silver stocks and create asset allocations for portfolios. To anyone questioning current silver equity valuations, we would ask: What price assumptions are you using? Of course we as allocators of capital are thankful for this phenomenon, as it allows us to buy our favorite silver stocks on the cheap, knowing full well that the herd will be following behind in due course as those backward-looking forecasts get ratcheted higher.

How can we be so confident that the price of silver will continue on its upward trajectory? Our thesis is premised on the most rudimentary of economic principles — supply and demand.

One of the key indicators that we’ve been monitoring is the gold/silver ratio. Much has been written about the ratio of late, and we won’t go into great detail on the subject, other than to note that the last time money was synonymous with defined amounts of gold and silver, the ratio was set at 16-to-1. In fact, for most of the past millennium, 1 ounce of gold would have been convertible to somewhere between 10 and 16 ounces of silver — an amount roughly in line with the relative occurrence of each mineral within the earth’s crust. For the better part of the past century, due to the world’s abandonment of bimetallism and then the gold standard, the gold/silver ratio has fluctuated widely, twice reaching lows near the 15-to-one mark and a high of 100-to-one back in the early 1990’s. The most recent high reached in the latter part of 2009 was nearly 80-to-1. Since then, the ratio has been tumbling to where it stands now at 35-to-1 — which reflects the incredible outperformance of silver over that time period. In our opinion, this ratio will continue to move lower, driven by nothing more than basic supply/demand fundamentals.

The U.S. Mint, which is the world’s largest silver and gold coin manufacturer, recently reported that it had sold 13 million ounces of silver coins and 370 thousand ounces of gold coins on a year-to-date basis. This means that the U.S. Mint is now selling roughly equal amounts of silver and gold in dollars so far this year. Furthermore, bullion dealers like Sprott Money and GoldMoney have confirmed with us that they are now selling more silver than gold in dollar terms. For additional confirmation of this investment trend, just look at the flows for the two largest gold and silver ETFs. Investors have withdrawn approximately $3 billion from the GLD so far this year while the SLV has seen net inflows of $370 million over the same period. Dollar for dollar, investors are allocating as much if not more money to silver than to gold. And why shouldn’t they? Silver is much more of a "precious" metal than the current ratio of 35-to-1 would suggest.

To explain, we must first address mine supply. In 2010, the world mined approximately 736 million ounces of silver and 85 million ounces of gold. The world also produced an additional 215 million ounces of silver and 53 million ounces of gold from recycled scrap. Adding both together brings us 951 million ounces of silver and 139 million ounces of gold supply, for a ratio of 9 ounces of silver to 1 ounce of gold.

Interestingly, this 9-to-1 ratio is very similar to the ratio of available in-situ silver and gold reserves. The U.S. Geological Survey estimates that there are current in-situ reserves of approximately 16.4 billion ounces of silver versus 1.6 billion ounces for gold, or about a 10-to-1 ratio.

The case for silver is even more compelling when one considers the ramifications of its dual role as both an investment and industrial metal. Last year, non-investment demand for silver (which includes industrial, photographic and silverware demand) totaled approximately 610 million ounces. This represents approximately 64% of primary supply, leaving approximately 341 million ounces to satisfy investment demand.

On the gold side, industrial usage totaled 13 million ounces, or about 10% of primary supply, leaving approximately 125 million ounces left over for investment demand. So, after netting out the industrial usage, the primary supply left over for investment demand is about 2.7 times that for gold. However, if we convert those ounces to dollars at current prices, we’re left with $15 billion worth of silver available for investment versus $186 billion worth of gold, or a 1-to-13 ratio of silver to gold! This means that in terms of primary supply, silver only has 8% of the capacity for investment that gold does despite having equal if not more dollars flowing into it.

Now, it’s true that another potential source of supply is the very silver that investors already own — and at the right silver price these inventories of silver and gold bullion may be sold into the market to supplement any supply shortfalls. As we’ve noted previously, however, due to decades of underinvestment, the amount of silver bullion inventories are actually extremely small, even compared to those of gold. Recent estimates suggest that reported silver bullion inventories stand at roughly 1.2 billion ounces versus 2.2 billion ounces of gold bullion, or roughly a 0.5-to-1 ratio. To put that amount in perspective, consider that at present there is only $52 billion worth of silver bullion/coins and over $3.3 trillion worth of gold in inventory which could potentially be recirculated into the market. Converting this to a ratio, you get a one-to-63 ratio of silver to gold inventories. So how is silver still priced at 35-to-1?!

All indications lead us to believe that there is now roughly an equal amount of investment flowing into silver and gold on a dollar-for-dollar basis. And although the price ratio of silver to gold has fallen substantially since the highs of 2009, our analysis strongly suggests that this ratio must move lower to restore a fundamental balance between supply and demand. Only time will tell how much lower it will go, but we would not be surprised to see it hit single digits before settling into a more sustainable equilibrium.

What the so-called silver‘experts neglect to account for in their models and projections is that the fiat money experiment has failed. And in this context, we believe the market has assigned world reserve currency status to gold — not USD, not EUR, and not JPY. In our opinion, gold’s continued appreciation vis-à-vis every currency is assured because the great flight from fiat has only just begun. Like gold, silver also has a long monetary history, and as such, investors are now also buying silver as protection from the ravages of fiat currency debasement. Yet, when compared to gold, it is silver that offers the most attractive value proposition by virtue of the gross mispricing of its scarcity, which, we might add, has existed for many years. Thus, in our opinion, as this new bimetallic standard takes root, silver investors will continue to be justly rewarded with marked outperformance. We truly believe that this is the investment opportunity of a lifetime, and increasingly so, others are taking heed. What is clear to us is that with equal investment dollars now flowing into silver and gold, the current 35-to-1 ratio is unsustainable and has only one direction to go: lower.

Article by Eric Sprott

GOLD AND SILVER AT ASTOUNDING LEVELS!!!!

2011-04-20T21:13:00.000-07:00

Wed Apr 20, 2011 11:28pm EDT

* Gold's bullish target at $1,518-technicals [ID:nL3E7FL06M] * Coming Up: U.S. Unemployment claims weekly; 1230 GMT

(Updates prices, adds quotes) By Lewa Pardomuan SINGAPORE, April 21 (Reuters) - Bullion powered to a
lifetime high for a fifth consecutive session on Thursday on a
sharply weaker dollar, while lingering tensions in the Arab
World, worries about the euro zone crisis and U.S. fiscal health
offered additional support. Silver roared to its highest in more than three decades as
it tracked a rally in gold, which was also spurred by a threat
of a downgrade to the United States' triple-A credit rating. The
gold-silver ratio -- the number of silver ounces needed to buy
an ounce of gold -- was at its lowest since 1983. Spot gold rose to a record high of $1,508 an ounce
and stood at $1,506.19 an ounce by 0243 GMT, up $8.04 an ounce.
U.S. gold futures GCcv1 also hit a lifetime high at $1,508.9
an ounce. "The U.S. effectively lost its triple A rating in the eyes
of investors that really matter quite some time ago, back when
gold broke $1,000 an ounce," said Fat Prophets commodities
analyst David Lennox. "We don't think America's perceived rating will improve
anytime soon and this is the driving force behind our
expectation of gold's continued price strength. Our next target
for gold is $1,590 an ounce." A bullish target at $1,518 per ounce remains intact for spot
gold as indicated by an inverted head-and-shoulders
pattern and its wave pattern, said Wang Tao, a Reuters market
analyst for commodities and energy technicals.
Spot silver rose as high as $45.93 an ounce, its
strongest since 1980, when the Hunt Brothers of Texas cornered
the silver market. The dollar extended losses and struck its lowest in almost
three years against a basket of currencies as the prospect that
U.S. interest rates would remain at record lows prompted
investors to flock back to higher-yielding currencies.
The physical market in Asia saw limited selling of scrap as
investors waited for more gains. Dealers noted physical buying
from India in the previous session ahead of a main religious
festival, suggesting that consumers had no choice but to buy
bullion at higher prices. India, the world's largest gold consumer, celebrates Akshaya
Tritiya on May 6, when consumers buy gold to invoke prosperity.
"Sentiment is still bullish, we can say. The dollar is
weakening and there is no solution to the situation in Libya.
There's a downgrade in U.S. rating and there's still uncertainty
in the euro zone. It's messy around the world," said Ronald
Leung, director of Lee Cheong Gold Dealers in Hong Kong. "But I think gold is rising too fast. We are waiting for
some kind of correction in the near future. Hopefully next
week." France promised Libyan rebels on Wednesday it would
intensify air strikes on Muammar Gaddafi's forces and send
military liaison officers to help them as fighting raged in
Misrata. Gaddafi's government is circumventing international
sanctions to import gasoline to western Libya by using
intermediaries who transfer the fuel between ships in Tunisia.
[ID:nLDE73J1M3] [ID:nN20168707] U.S. crude futures extended gains in early Asian trade on
Thursday, buoyed by a drop in domestic crude and oil product
inventories last week and a broader commodities buying binge
sparked by a weaker dollar.
Precious metals prices 0243 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1506.19 8.04 +0.54 6.11
Spot Silver 45.84 0.64 +1.42 48.54
Spot Platinum 1801.99 10.84 +0.61 1.95
Spot Palladium 765.50 13.75 +1.83 -4.25
TOCOM Gold 3989.00 -19.00 -0.47 6.97 32918
TOCOM Platinum 4801.00 -5.00 -0.10 2.24 7148
TOCOM Silver 121.00 2.80 +2.37 49.38 3117
TOCOM Palladium 2040.00 50.00 +2.51 -2.72 260
Euro/Dollar 1.4573
Dollar/Yen 82.17
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Additional reporting by Rujun Shen in SINGAPORE and Jim Regan
in SYDNEY; Editing by Himani Sarkar)

Uncertainty Could Send Gold Skyrocketing

2011-02-13T20:14:00.001-08:00

Unpredictables could send gold price skyrocketing
While the gold price on fundamentals alone should achieve new highs again this year, unpredictables could see the price soaring.

Author: Jeffrey Nichols
Posted: Saturday , 12 Feb 2011

NEW YORK -

Readers of these articles should not be surprised by gold's recent rebound. In late January, as gold was testing recent lows near $1,310 an ounce, we said "the fundamentals suggest much higher prices ahead" with "market activity strengthening the case for a surprisingly sharp snapback and new all-time highs later this year."

Indeed, we anticipate gold will retake its all-time high near $1,432 an ounce in the months ahead . . . and reach $1,700 later this year . . . on its way to $2,000 an ounce in 2012 . . . and still higher prices in the next few years.

GLOBAL INFLATION RISING

One of the key forces contributing to expected gold-price strength is the acceleration in inflation now underway around the world.

It seems that almost everywhere - except here in the United States - inflation is on the rise. We now read daily about the rise in agricultural, energy, and industrial commodity prices from one country to the next - and the consequential acceleration in consumer prices. China, India, Brazil, the United Kingdom, and the Eurozone economies make the newspapers because these are the largest economies after the United States and they are the most populous, too.

But, less noticed outside their own borders, one country after the next, is suffering from higher prices, especially for food and energy - and the acceleration of inflation in some countries is beginning to have broader social and political consequences as we have seen recently in Tunisia and Egypt.

Today's global inflation is largely a consequence of U.S. monetary policy and the unbridled flood of dollars into the world economy on the one hand . . . combined with an unwillingness among central bankers in the other big economy countries to allow upward appreciations of their own currencies.

Just as in the United States, central bankers in these countries prefer economic expansion and happy workforces to low inflation with higher unemployment. And, although some - China, India, and Brazil, for example - are raising interest rates and restricting bank lending, these measures are intentionally insufficient to greatly restrain future economic growth and, therefore, insufficient to restore price stability in their respective economies.

It's no wonder that smart savers and investors in China and India are buying hundreds of tons of gold a year - and will most likely continue to do so even as gold prices move significantly higher.

Anyone worried about inflation should be worried about the fantastic growth in the Fed's holdings of U.S. Treasury securities. Recently, the Fed surpassed China as the largest holder of U.S. Treasury securities - and by mid-summer the Fed will likely hold more Treasury securities than both China and Japan combined.

The explosive growth of U.S. Treasury securities - T-bills, notes, and bonds - held by the Federal Reserve is the flip side of the central bank's policy of quantitative easing. The Fed has now replaced foreign central banks as America's financier, funding our Federal budget deficit by creating new money.

This is a policy that must eventually result in a significant erosion in the greenback's purchasing power brought on through a depreciation of the U.S. dollar in world currency markets and an acceleration of inflation here at home - an acceleration that is bound to occur irrespective of continuing economic slack, high unemployment and low capacity utilization.

OTHER PRO-GOLD FUNDAMENTALS

In addition to rising global inflation and inflation-fueling U.S. economic policies, other on-going trends in the world of gold will also contribute to higher prices later this year and beyond:

Continuing strong gold demand for jewelry and investment - even in the face of higher prices - from China, India, and other gold-friendly Asian and Middle Eastern nations. Demand from these countries is driven by rising household incomes and rising inflation expectations - and these trends are likely to persist for some time to come.

Continuing official purchases by China, Russia, and other cash-rich central banks with "under-weighted" gold reserves. Central banks tend to buy on dips when their purchases are least likely to disrupt the market - and official demand in recent weeks with prices near $1,320 helped stabilize and reverse the short-term price decline.

Expanding investment demand from a small but growing segment of retail investors in the United States and Europe who are worried about rising inflation and currency depreciation . . . and from hedge funds and other institutional investors who understand gold's bullish fundamentals.

Given the relatively small size of the gold investment market relative to world stock and bond markets or major currency markets, a very small shift in portfolio preference away from conventional assets in favor of gold may have a negligible affect on the stock and bond markets - but will have a big affect on the price of gold.

Easier access to gold through new investment vehicles, especially exchange-traded funds, is promoting the growth in gold investment from one country to the next. Even India and China are jumping on the bandwagon with new ETFs denominated in local currencies and weight units familiar in each country.

IMAGINING THE UNPREDICTABLE

In addition to these somewhat predictable gold-positive trends, unpredictable geopolitical developments could, under certain circumstances, have an overwhelming affect on the price of gold.

What if Egypt sinks into a prolonged period of social and political chaos?

What if the Suez Canal is threatened or closed by political developments or by terrorism?

What if similar spontaneous revolutions erupt in Lebanon, Yemen, or Saudi Arabia, the world's largest source of oil?

What if new governments in the region threaten Israel militarily?

What if Iran takes advantage of the political vacuum created by these popular uprisings?

Or, in other regions . . .

What if North Korea launches another, but more serious, assault on the South?

What if Europe's sovereign debt problems erupt again, triggering a flight from the euro?

And, closer to home . . .

What if Congress and the Obama Administration fail to make any significant progress in balancing America's Federal budget deficit, triggering a flight from the dollar?

Any of these events are certainly plausible - and there are many others we simply can't imagine - but each has the potential to send gold skyrocketing.

Jeffrey Nichols, Managing Director of American Precious Metals Advisors www.nicholsongold.com and Senior Economic Advisor to Rosland Capital

Gold Price Calculator

2010-09-06T23:07:00.000-07:00

Gold
Calculator - Silver Calculator - Platinum Calculator. Evaluates
the current on-line price of all carat golds, silver,
platinum, and palladium. Uses the current on-line price
for a variety of currencies.

Gold Accelerates with Massive Momentum

2010-08-16T20:55:00.000-07:00

The Gold ETF Train Is Gathering Steam Again (NYSE:GLD)

August 16th, 2010

The SPDR Gold Trust ETF ETF (NYSE:GLD) closed today above its previous major spike peak high of the 12/2/2009 and 12/3/2009 period. This is significant. Volume was seriously lacking the (NYSE:GLD) ETF today however, but still we must give it credit for a solid close near the top of the range.

The (NYSE:GLD) ETF has now positioned itself to enter once again a zone of minimal previous price resistance. This is very important because previous price resistance can be like quicksand, hindering ease of movement in price.

Gold is trading with the Relative Strength Index well above the mid 50 range and in bullish territory. A move into the powerzone above 70 could lead to possibly explosive topside moves.

The gold price seems to be ‘the trade’ right here and now. It has a huge almost one year cup and handle pattern, the handle of which seems to be finishing now. It does not have a messy sloppy extended trading range like the stock market does. So why still the obsession with the stock market? You probably already know the answer. Because of the still astonishingly huge number of stake holders with a vested interest in pumping the market up. Needless to say it is not working too well. The stock market is in a wide swinging trading range with no real trend.
If we assume that the gold price will blast higher to 2000 during the next 6 to 12 months and that the Dow Jones Industrials would stay at 10,300 then it would put the ratio at about 5.00 which is right at the bottom channel line of the 100 year Dow to Gold Ratio Chart.

If the DJIA were to decline from here it would change the movement of the ratio of course but this chart is definitely one to keep in mind assuming gold can get to 2000. This long term chart suggests that the 2000 range of the gold price is an ideal major pausing point for the gold price. Perhaps it would lead to that 50% correction in the gold price I referred to in a much earlier post.

by Tom, best on line trades dot com

Host Your Own Gold Parties - Instant Home Business!!!

2010-03-25T22:23:00.000-07:00

I love sharing creative ways to make money with gold. Just check out some of our earlier posts for examples, including even how to become a treasure hunter looking for lost gold!

Well, recently I found one that is even more promising and fun. You can learn how to host your own gold buying party, complete with virtually everything that you will need to get started, including how much to pay, and where to go to resell your purchases.

With everyone looking to sell their gold to cash in on gold prices over $1000 per ounce, this is a fun, profitable way to capitalize on the action. You can host a party with your friends in your home, or go big and rent some space and advertise to the public. Or, start small and grow big. You decide how you want to profit!

You can download and receive the information and all of the related forms that you will need right away. It includes calculation tables, forms, and instructions. YOU decide how much you will pay for the gold that you purchase, and YOU decide how much you are going to profit! It's an incredibly affordable set, one that I am sure you will be delighted with.

To learn more about the Complete Gold Party Hosting Kit Click Here!

Also, Here is another e-book showing you how to buy and sell Gold Scrap.

...

Great Gold Investing Resources for Beginners

2010-03-25T22:10:00.000-07:00

Hi readers. There are a few beginner resources that I wanted to share with you.

A few weeks ago, I came across a new gold trading system from a company called New Millenium. It sounded promising, so I decided to give it a try.

It did not disappoint. It provided everything that I needed to get started profiting from gold on the commodities markets. It breaks everything down for beginners. I won't lie, it's a fast-paced program, but it allows you to start small and build your bank account.

They offer a full 60-day money back guarantee, so that is plenty of time to try it out without risk.

To learn more about the system, Go Here.

Another resource that I want to share shows you creative ways to buy gold at low cost. Sounds impossible, doesn't it? This report shows you how, and will make you a believer. For only $17 with a full 60-day money back guarantee, it's a no-brainer. Click Here to Learn More

Experts See Gold and Silver as "an Excellent Hedge", "About to Break Higher"

2010-03-25T21:38:00.000-07:00

Thursday 18th March 2010
The Gold Price ticked higher from its second dip to $1120 in two days Thursday lunchtime in London, pushing north for Sterling and Euro buyers as world stock markets held flat.

"The equities markets have been a bit firmer," said one Sydney strategist to Reuters overnight. "That's probably taken a little bit of interest away from gold.

"It appears Gold has once more been influenced by large institutional trading, which has contributed to the recent week's volatility," says a note from Swiss refiner MKS's finance division.

"Gold is turning out to be an excellent 'sideways' trade," says bullion bank Scotia Mocatta. "The [US Dollar] range over the last month has basically stayed between $1088 to $1145 an ounce."

"Gold will likely be kept firm into 2010 and 2011 by a relatively weak greenback, record-setting US fiscal deficits, rising inflation concerns and higher jewelry demand, which has been hit hard by the recession," reckons Bark Melek, global commodity strategist at BMO, the $373 billion asset manager based in Montreal.

"Gold is an excellent hedge and will remain stable...The end to producer hedging, central bank net buying after a very long pause, and concerns that excessive US and European government debt may lead to future monetization are additional key drivers for the outlook."

Melek is more bullish still on silver, however, noting that new supplies were flat in 2009.

"With demand for industrial silver rebounding sharply in 2010, likely around 19%, as global industrial activity and auto production move into recovery mode, supply/demand fundamentals look set to tighten materially in 2010."

"Gold and Silver prices should, in our view, trend higher over the next few quarters," agrees the latest Commodities Review from French bank Société Générale

"We expect investor buying of gold and silver to continue as inflation fears are likely to increase on strong economic growth in emerging economies and on concerns that developed countries may be tempted to monetize some of their large amount of sovereign debt."

Adrian Ash, 18 Mar '10

Gold's Stellar Performance Set to Continue in 2010

2010-01-12T16:55:00.001-08:00

Historically gold bull markets have lasted as many as 15 to 25 years, this one has only been going since 2001.

Author: David Levenstein
Posted: Monday , 11 Jan 2010

JOHANNESBURG -

As we enter the beginning of another year, and wonder what to expect for the year regarding the different markets, I for one am extremely bullish on gold. Last year was a great year for the precious metals, gold, silver, palladium and platinum with gold and silver increasing in value by 26% and 57% respectively. For the last nine consecutive years, gold's performance has been one of the best out of all the different asset classes. Despite this, there are analysts who continue to denigrate gold as an investment. Obviously they don't have a clue about precious metals and fail to see what an upward trend or bull-market is.

There was a time when every single central bank, bullion dealer and investment advisor wanted to sell gold, but since 2001 the fundamentals driving the gold price have changed. Even though gold has continued to perform well each year since 2001, this bull market is far from over. So, how long can this market last? I believe at least another 5 to 7 years if not more. Historically, commodity bull markets have lasted between 15 and 25 years, so if this market was to last only 15 years, that means there is still another 6 years to go. Of course it is almost impossible to accurately predict the duration of these major moves and the ultimate high in prices but, looking at the fundamentals that began this move in gold, they all look extremely positive. Thus, the probability that we will see gold to continue to move upwards is a lot greater than the chances of it plummeting back down to US$800.

About the author

David Levenstein is a leading expert on investing in precious metals .He brings over 29 years experience in futures, equities, forex and bullion. And, although he began trading silver through the LME in 1980, when it comes to gold, he has traded gold bullion, gold coins, gold shares, gold ETF, gold funds and gold futures for his personal account as well as for clients. Over the years, David has been published in dozens of publications and has appeared on CNBC and Summit TV (South Africa), and is a regular guest on JSE Direct, a premier radio business channel in Johannesburg, South Africa. He is also a regular commentator on www.kitco.com and www.mineweb.com David has lived and worked in Johannesburg, Los Angeles, London, Hong Kong, Bangkok, and Bali.

Why Gold Investing is Crucial - One Man's Opinion

2009-12-26T22:16:00.000-08:00

Why Gold Investing is Crucial
By Brent Lichtman

Gold investing is going to be the only investing in a short while. Wait just a minute, you exclaim! What in the world are you talking about? How could gold investing be the only investing? That makes no sense at all! Well, the answer to that question may seem like it doesn't come from this world, and that is partly correct. The world as we know it is about to change and gold investing is going to become the only investing!

The U.S. Dollar is being destroyed by the government and the Federal Reserve. The policy that the Fed has introduced, quantitative easing, is going to insure inflation in the the years ahead and for years to come. Gold will be the beneficiary of this misguided policy and that is why gold investing will be the only investing for the next couple of years.

Gold is real money, real wealth. The reason that gold is real wealth is because it is in limited supply, in great demand and it cost a lot to coax it out of the ground. In essence it is the anti-fiat currency. It is the direct opposite of everything that paper money is. Fiat currencies are printed for next to nothing and they can be expanded on a whim. Governments can do whatever they want with paper money and pass the consequences on to the taxpayer with out calling it a tax increase. The best of both worlds for the bloated ever expanding government. This is one more reason why, soon, gold investing will be the only investing.

Now is the time to be gold investing, because the dollars that are put into gold now will come back triple fold. Physical gold, coins and gold bullion, are your security blanket that will keep you warm when things get cold out there. Investing in gold stocks allows you to leverage your money and go for the moon shot when the dollar really takes a dive!

Most people are never willing to see the dramatic changes that are on the horizon, but rather prefer to live in the world of it can't happen here. Those that venture into the world of gold investing and stay the course, will reap substantial rewards in the very near future. In the old days the standard was to have 10 percent of your portfolio in precious metals. The times have changed and a more realistic percentage would be 50 percent if not more. It is always wise to remember that the trend is your friend, and right now the trend is changing to gold investing!

Gold Rises as Dollar Lags

2009-12-23T21:04:00.000-08:00

Gold Rises for Second Day as Pause in Dollar Rally Spurs Buying

By Kim Kyoungwha

Dec. 24 (Bloomberg) -- Gold rose for a second day as the dollar extended its retreat from a three-month high against global currencies, buoying demand for the precious metal.

Bullion gained, climbing from a seven-week low earlier in the week, after a report showed sales of new homes in the U.S. unexpectedly fell last month. The metal has weakened 7.5 percent this month as the Dollar Index, a six-currency gauge of the greenback’s value, strengthened 4.1 percent.

“The movement in the dollar is still a key force dictating the course of prices,” said Steve Chun, a trader at Hyundai Futures Corp.’s overseas business team in Seoul. “New positions in the market are limited with some investors inclined to liquidate their holdings” before year-end holidays, he said.

Gold for immediate delivery increased as much as 1 percent to $1,098.15 an ounce and traded at $1,096.65 at 11:15 a.m. in Singapore. Gold for February delivery in New York rose 0.3 percent to $1,097.50 an ounce. The dollar traded at $1.4351 per euro in Tokyo from $1.4337 yesterday in New York. The Dollar Index slid 0.2 percent.

Gold has gained 24 percent this year as U.S. growth slumped during the longest recession since World War II, spurring demand for the precious metal as an investment haven. Gold holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged at 1,132.71 metric tons yesterday, according to the company’s Web site.

Investors should avoid building new positions in a market thinned due to year-end holidays, said Jon Nadler, a senior analyst with Kitco Metals Inc.

“None of the moves in the metals in upcoming sessions are to be counted as significant in either direction,” Nadler wrote in a report yesterday. “The market cannot be expected to show discernable tendencies until the in-earnest resumption of trading activities.”

Among other precious metals, silver rose 0.7 percent to $17.225 an ounce, palladium jumped 1.4 percent to $363.50 and platinum gained 0.1 percent at $1,422.50 an ounce.

Over for Gold? Not so fast!

2009-12-11T19:54:00.000-08:00

Over for gold? Not so fast
Commentary: Bullion's bull market remains intact

By Simon Constable
NEW YORK -- Don't be suckered into thinking the recent plunge in gold prices means a bubble has burst.

It's just too early to say if it's just a pop.

My bet: Bullion's bull market remains intact because the factors fueling the rally haven't disappeared.

Last Friday, the price of gold saw its biggest one-day drop since March 2008. It slid to $1,142.50 a troy ounce in London on Monday from an all-time high around $1,218.25 Thursday following Friday's modestly favorable employment news.

That's a mere 6% blip in a year-to-date surge of approximately 31%.

"It is a correction in a long-term uptrend," says Jeffrey Nichols, senior economic adviser to Rosalind Capital. It's a trend he sees lasting "at least another couple of years."

Nichols' reasons: Loose monetary and fiscal policy that could lead to inflation, resurgent demand for the metal by central banks, increased investment interest from institutions and individuals, and declining worldwide mine output.

Two of the items worthy of further discussion: Investment demand and loose monetary policy.

Investment demand is important because although historically the majority of gold has been used for making jewelry, high gold prices are highly correlated with strong investment demand.

Does buying gold make sense now? Gold prices have kept climbing but investors' enthusiasm is far from fading. What should individuals do? India bureau chief Paul Beckett speaks to personal finance reporter Shefali Anand about the issue.
A quick look at the bullion holdings of the SPDR Gold Shares exchange-traded fund /quotes/comstock/13*!gld/quotes/nls/gld (GLD 109.35, +0.03, +0.03%) shows investors weren't bailing last week. The fund only saw a drop of about 1.5 metric tons Friday. That's miniscule compared with the current total of approximately 1,130 tons.

On monetary expansion, James Turk, founder of GoldMoney.com, says, "The amount of new money created during the financial crisis has debased the dollar more rapidly than the gold price has risen."

So in his view there is still more upside. But none of this means that gold prices will go up in a straight line. In fact, prices could retreat quite substantially and still leave the uptrend intact.

So how low can it go before folks start to get worried?

A correction back to $1,000 wouldn't be crazy, explains John Roque, a technical analyst at WJB Capital Group in Manhattan, in a recent research report. Presumably, the uptrend could resume after a downward or sideways move, which gets me to my initial point: The truth is we'll have to wait and see.

Simon Constable is a Dow Jones Newswires columnist and host of the News Hub Web Show. This column first appeared on Dow Jones Newswires.

Gold Prices Still Holding Strong

2009-11-20T20:52:00.001-08:00

thestreet.com

NEW YORK (TheStreet) -- Gold prices refuse to take a breather.

Friday is options expiration which historically leads to volatility and profit taking in gold, as investors readjust their positions. The U.S. dollar index was also continuing its mini rally from Thursday rising .61% to $75.74. These factors should put pressure on the precious metal, but gold prices were rising to $1,149.50 an ounce as funds keep investing in gold as an alternative asset. Gold delivery for December has traded as high as $1150.50 and as low as $1,132.50 at the Comex division of the New York Mercantile Exchange.
Most analysts say gold is overdone, yet every slight dip in prices has been supported by overwhelming long buying. "There are strong buyers with strong hands. They are buying and not letting go", says David Morgan, co-founder of Silver-Investor.com. "The fund managers are jumping on top of whoever it is who's buying in size. It might be a nation state, it might be a central bank silently, [or] it might be a country. We don't really know."
Morgan stands by the probability of a short term correction which some technicians think the market is already seeing with daily pullbacks in the gold price. "I think we are going to get a slight correction in the next few weeks and then we're probably going to restart the rally...I think we could see the $1, 250 mark into the first quarter of 2010."
Silver has now confirmed gold's rally by breaking the $18 resistance level which is a long term bullish indicator for gold. Silver prices were slipping 21 cents to $18.24 while copper was relatively unchanged at $3.07.

Why Invest in Gold?

2009-10-27T19:52:00.000-07:00

Here's good article explaining why gold is an attractive investment, even at current historic high prices, in this time of uncertainty in other markets.

INVESTORS REGARD gold as a safe-haven asset in uncertain financial times. They hope the precious metal can hold its value when most other financial assets - shares, currencies and property - may not. Earlier this month, gold breached the $1,000 per ounce price level – a key psychological threshold - and last week it set a record high against the dollar. The soaring gold price has mirrored the recent decline in the dollar as international concerns grow about the health of the US economy and questions are raised about the dollar’s future as the world’s major reserve currency.

In the US, a combination of near zero interest rates, expanding deficits and a rising national debt has lowered international confidence in the American economy. Fears that rising future inflation will erode the dollar’s value have increased investor concerns about the currency among some of the very large holders of dollar assets, including China. Its foreign reserves are mainly invested in US treasury bonds and amount to $800 billion. In any rapid decline of the dollar, China would be the biggest loser.

For worried investors who want to hedge their risk, whether against inflation or market uncertainty, gold offers one form of diversification. But because the metal is a non-interest bearing asset, gold provides no income stream. Investors must rely on capital appreciation to secure a return. Since the start of the financial crisis in August 2007, gold has outperformed most other asset classes. The metal serves both as a commodity and a monetary asset; its market price is determined by jewellery demand, where gold is a staple, and by investment demand, which is greatest at times of financial uncertainty.

A major turning point in the fortunes of gold occurred in 1971 when President Nixon allowed the gold price to float from the $35 an ounce set by President Roosevelt in 1934. In the late 1970s, with inflation in the US at its highest in the country’s history, investors lost confidence in paper money and the dollar, and the gold price peaked in 1980 at $850. The gold bubble quickly burst as inflation was brought back under control, the dollar recovered and as mining companies produced more gold, the price fell.

The short history of gold shows a rising price over recent decades. A longer history shows that gold has disappointed as an investment asset. Nevertheless, gold has its own mystique and the appeal of the precious metal remains undiminished for many.

This article appears in the print edition of the Irish Times

GOLD HITS RECORD HIGH!

2009-10-06T19:47:00.003-07:00

A weak U.S. dollar and chart-based buying enabled December gold Tuesday to hit a record high for any most-active contract ever traded on the Comex division of the New York Mercantile Exchange.

The contract peaked at $1,045 an ounce, taking out the previous most-active record of $1,033.90 in March 2008.

Additionally, October gold has been as muscular as $1,043.80, a record for a nearby contract. Also, cash gold hit the same record high price, according to one price vendor.

December gold settled $21.90 higher at $1,039.70 an ounce. The metal rose in the wake of the euro hitting a high of $1.4764, compared with $1.4651 late Monday afternoon.

Gold, which began a bull market early in this decade, has been further boosted in recent weeks on concerns about the dollar and the potential for inflation when the global economy recovers, given the stimulus efforts from central bankers and governments around the globe. Investment demand has offset reduced demand in other sectors such as jewelry.

"A lot of participants are continuing to expect a lower dollar as we go into the end of the year," said Adam Klopfenstein, senior market strategist with Lind-Waldock. "It's very hard to sell commodities into a weak-dollar macro play that we're seeing right now."

Outside markets such as the dollar are the predominant focus for gold right now, rather than demand in key consuming nations such as India, he said.

The dollar was undercut - and gold supported - by an interest-rate hike in Australia, said Jim Steel, metals analyst with HSBC.

Further dollar pressure came from a report in the U.K. Independent newspaper saying some Middle Eastern nations, China and others were looking at abandoning the dollar as the principal pricing mechanism for oil, said Steel and Matthias Detremmerie, analyst with goldessential.com.

"That has since been denied," Steel said. "But it focused attention on the dollar's reserve-currency status and is very positive for gold."

Bill O'Neill, one of the principals with LOGIC Advisors, doubted any scenario shifting away from the dollar as a reserve petro currency is a likely valid probability for the foreseeable future.

"But it got the euro going, and the euro is up about a cent," he said. "And it started to bring some buying into gold. And then the market went through some technical resistance and spurted up to the high."

Detremmerie said buy stops - pre-placed orders to buy when certain chart points are hit - were first triggered in quiet, illiquid overnight trading.

On the December futures, he continued, buy stops were triggered around $1,020, $1,023 and $1,025. The market then took out the July 2008 high of $1,028 before extending still higher during open-outcry hours.

Funds were among the buyers, said George Gero, vice president with RBC Capital Markets Global Futures. He also saw some short covering, in which traders buy to offset positions in which they previously sold.

Klopfenstein said strength in equities also boosting gold. The Dow industrials are up by around 75 points. Mining stocks have been climbing Tuesday, with gold producers AngloGold Ashanti Ltd. (AU), Harmony Gold Mining Co. (HMY), Gold Fields Ltd. (GFI) and Randgold Resources Ltd. (GOLD) among the biggest gainers.

"There is an economic recovery back in the cards," Klopfenstein said. "We're starting to see risk-taking as an essential theme in the marketplace as we begin the fourth quarter."

Thus, market participants are also gravitating toward commodities such as gold, crude oil and silver, he continued.

Other precious metals have followed gold. "There is a general tidal wave higher, in other commodities as well," Steel said.

December silver closed up 76 cents to $17.295 an ounce. Meanwhile, January platinum rose $23.50 to $1,325.30 an ounce, while December palladium gained $7 to $310.30 an ounce.

Benchmark commodity indexes also were higher.

The Dow Jones-UBS Commodity Index gapped open higher and shot to a 2 1/2-week high of 128.910.

The Thomson Reuters Continuous Commodity Index notched more impressive gains, with speculative fund buying taking prices to a one-year high of 438.28.

Steel suggested the gold rally is showing no signs of diminishing. "What makes it look virulent is that it continues to go up despite the fact that Saudi Arabia and Russia have denied that there are any discussions about replacing the dollar for trading oil," he said.

-By Allen Sykora, Dow Jones Newswires; 541-318-8765; allen.sykora@dowjones.com

A Beginner's Guide to Gold Investment

2009-10-06T19:47:00.001-07:00

“Gold is the sovereign of all sovereigns.”

Rightly said! Gold has been treasured since pre-historic times around the world and investing in gold seems to be the best alternative in the current market instability. As a novice here it can be well confusing and daunting to invest your money wisely. This article is intended to portray the real world of bullion trading and attempts to explain how to go about finding the right coin for you.

Let us start analyzing why there is all this hype about Gold.

Gold is durable; it doesn’t tarnish as years pass.
Gold is universally accepted.
Gold retains and appreciates in value.
Gold is available in a standardized form.
Gold is tangible and hence can be safeguarded easily.

As an ultimate form of safe haven investment, gold is considered to be a great asset and worth while investment. With so much uncertainty lurking over our economic growth it is a prudent thought, having chosen gold to hedge our investments.

Beginners who wish to invest in this market must watch out for 3 foremost factors:

right coins to invest
right coin dealers
right coin storage

With almost 45 mints available worldwide, the most sensible option for a beginner would be to go for the American Gold Eagle, as it is cast ironed by the U.S mint. A good dealer would be a veteran in this field. Before choosing traders for your investment always make sure to study his experience and go for the most reputable ones. Last but not least, safekeeping your asset should be equally weighed with the other two factors. Investors can go for a personal safe box or even bank vaults. As long as it is safe, you can rest easy.

Gold Investment options:

With the rising prices in gold, investors can choose from varied options, either directly through ownership or indirectly through stocks, accounts etc. for their investments. Below are some of the most widely used methods.

1. Gold coins & Bars

Purchasing gold coins or Bars is the most popular and conventional method of investment. Financial experts promote buying gold coins or bars as it balance risks & combats inflation. Purchase of gold depends on how much you can afford and what you need to buy. Another advantage of investing in coins / bars is the ease of storage; they are universally recognized and hence can be bought and sold with no trouble; they are widely available through dealers and mints. Beginners should always be careful against buying fraudulent gold from unknown suppliers. Usually a little premium needs to be paid, which makes it a little expensive initially. American Gold eagle, American Gold buffalo are some of the popular yellow coins available.

2. Exchange Traded Funds

Gold Exchange Trade Funds (GETFs) are shares which track the price of the gold. They are traded on major stock exchanges in New York, Paris, Mumbai etc. Typically a small commission fee, along with a yearly storage fee applies. Trading through GETFs can be carried out easily. While some ETFs invest in gold related companies' stock, some actually invest in the real gold. One of the drawbacks in this method is, as opposed to gold coins or bars, all we have in our hand is paper documents which do not actually give the feeling of real gold in your hands. A similar idea holds for Gold Mutual Funds as well.

3. Certificates

Like ETF, gold certificates are also paper documents which gives ownership to investors rather than storing the actual bullion. This allows investors to buy and sell the gold without thinking about the overhead of transferring and storing.

4. Gold Savings Accounts

Similar to our normal savings account, an investor can credit his account as gold is deposited and withdrawal can be made either in the form of Gold coins or currency equivalents. Digital Gold currency accounts or Bullion vault gold exchange work on a similar principle.

5. Buying gold jewelry & ornaments is another investment option available.

Whether you want to invest in gold coins, bars or other options the basic ground will be to get sound and reliable investment advice. But whatever your choice, as a conservative option, gold is considered to be one of the best investments for the future.

Gold rises as dollar falls; copper slides from 11-month high

2009-08-25T16:41:00.000-07:00

NEW YORK (MarketWatch) -- Gold futures recovered part of the previous session's losses Tuesday as a weakening U.S. dollar raised the metal's investment appeal, while copper futures declined from their highest level in nearly 11 months.

December gold futures gained $2.30, or 0.2%, to end at $946 an ounce on the Comex division of the New York Mercantile Exchange. The contract dropped more than 1% Monday.

The metals market also assessed President Barack Obama's announcement that he would reappoint Ben Bernanke as chairman of the Federal Reserve Board. The dollar remained lower against the euro and the Japanese yen after the announcement, supporting dollar-denominated gold prices.

Wall Street Journal - Gold Seen Beating Others as Inflation Hedge

2009-07-15T20:39:00.000-07:00

NEW YORK (Dow Jones)--Gold prices may, in some cases, perform more strongly than other traditional inflation hedges in times of rising prices, an industry group study released Wednesday said.

"If inflation does materialize, then traditional inflation-hedges like gold, commodities, real estate and inflation-linked bonds are likely to outperform other mainstream financial assets," said the report by the World Gold Council, a marketing organization funded by gold mining companies.

"Gold can be shown to enhance an investors' risk-adjusted returns even in a low to medium inflation environment," said the report, written by Natalie Dempster, head of investment for North America, and Juan Carlos Artigas, investment research manager.

With some investors worried about a resurgence in inflation because of aggressive government policy responses to deal with the financial crisis and tentative signs that the worst of the recession might be over, the study examined the relative performance of gold, commodities in general, real estate and inflation-linked bonds.

The study compared the real or inflation-adjusted returns of assets representing these four classes - the spot price of gold at 5 p.m. in New York; the S&P GSCI commodity index spot price; the Bloomberg Real Estate Investment Trust Index; and Barclays' Aggregate US Treasury Inflation-Protected Securities Index - over three time periods.

In the first period, between January 1974 and May 2009, the nominal gold price rose from $129.19/oz to $979.15/oz, an increase of 658%, compared with a 997% rise in the S&P GSCI. Adjusting for the 357% cumulative increase in the US consumer price index over the same period, gold rose by 66.6%, while the S&P GSCI rose by 141.1%.

This equates to an annualized real return in the gold price of 2.0% and an annualized real rise in the S&P GSCI of 2.8%.

Over the second period, December 1993 to May 2009, gold posted an annualized real return of 3.6%, while the S&P GSCI rose by 2.1%. REITs were the worst performer, declining by an annualized 2.1% in real terms.

In the final period, between March 1997 and May 2009, gold was the best performer, rising by an annualized 5.9% in real terms compared with a 0.2% decline in the S&P GSCI, a 3.8% decline in REITs and a 3.7% increase in TIPS.

TIPS had the lowest volatility of 6.2% from March 1997 to April 1997. However, gold consistently delivered a lower average volatility throughout the three periods relative to the S&P GSCI and REITs. In the periods from 1993 and 1997 to date, gold's volatility was significantly lower, about 30%.

In high inflation years - defined by the study as an annual rise in the U.S. CPI of more than 5.0% -- although volatility picked up, the ratio of return to risk increased from an average of 0.10 in periods of low and medium inflation, to 0.33.

"In other words, gold not only performed best in terms of real returns during high inflation years, it also delivered a better risk/return profile," the study said.

The study cautioned that it is unlikely these assets will deliver similar real returns in the next few years because of the comparatively higher impact the last year has had on market returns and volatility.

To build a forecast model, the study compared the basic portfolio, plus gold and commodities from 1990 to mid-2008 with that of 1974 to 2009.

Gold, according to the study, was the asset more likely to help investors achieve the maximum reward-risk portfolio, based on a 6.9% allocation to gold. TIPS came a close second and the S&P GSCI a bit behind.

-By Matt Whittaker, Dow Jones Newswires; 212-416-2139; matt.whittaker@dowjones.com

Gold Set to Surpass Record Levels, to Exceed $1000 per Ounce

2009-05-30T12:18:00.000-07:00

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NEW YORK -- Gold prices may breach $1,000 an ounce this coming week if the dollar continues sliding and the metal can surmount any technical chart-based resistance and profit-taking.
"From a technical standpoint, there doesn't appear to be a whole lot of resistance between where we are now and $1,000," said Michael Gross, broker and futures analyst with OptionSellers.com. "I think there's a good chance of us hitting $1,000 next week, especially if the dollar continues to falter."
The thinly traded nearby June gold contract gained $17.30, or nearly 1.8%, to settle at $978.80 an ounce on Friday as speculative funds bought the metal while the U.S. dollar declined. The most-active August contract rose $17.10, to $980.30 on the Comex division of the New York Mercantile Exchange.

For May, gold gained $88.10, or 9.9%, snapping a two-month losing streak. Front-month gold hit a record $1,014.60 in March 2008 and reached $1,004.90 in February. It is up from an $865 low last month.
Silver futures rose along with gold on Friday. "It all revolves around the same thing: the lower dollar," said Leonard Kaplan, president of Prospector Asset Management. The nearby Comex June silver contract rose 45 cents to $15.60 an ounce. For the month, silver gained 27%, or $3.295, its largest monthly dollar gain since January 1983.
As for gold reaching $1,000, Frank Lesh, broker and futures analyst with FuturePath Trading, sees the dollar starting to get oversold and gold running into technical chart resistance at about $993 an ounce. "These commodities are getting into overbought status," Mr. Lesh said. "When gold hits the $990s, you're going to start seeing some profit-taking."
"It all depends on the dollar," Mr. Lesh said. Historically, gold rises when the dollar falls as investors turn to the metal as an alternative currency, and vice-versa.
Ralph Preston, senior market analyst with Heritage West Financial, sees some consolidation and profit-taking in gold at the beginning of this coming week. But then the metal will likely move in short order to test its record and perhaps surpass it within three weeks, he says.

Investors should Buy Gold as 'major bull rally' is imminent

2009-05-23T08:19:00.000-07:00

A senior figure at OmniSans Research said on May 20 that Gold Investment is prudent as the yellow metal will go "much, much higher" this year.

Paul Learton, chief investment strategist at the independent firm, attempts to draw a number of parallels between gold's bull market in the 1970s and the current one, which started in 2001. He notes that gold increased by 471 percent between mid-1971 and December 1974, fell by 50 percent over an 18-month period and then exploded from August 1976 to January 1980.

Similarly, a high point of $1,033 per ounce was reached last March in the current bull run, with Gold Prices subsequently dropping by 30 percent at one stage to about $700 per ounce. "If this bull market parallels the last one, then gold should renew its upward momentum in a very serious way starting in October 2009," he wrote on SeekingAlpha.com. "And this next leg up should be a major one (the biggest gains came during the second rally in gold's bull market in the '70s). However, judging from the Fed's money printing, the next leg up may come even earlier."

Leon Westgate from Standard Bank, the largest bank in Africa, also claimed last week that prices should rise in the coming months as a result of a falling dollar, which tends to move in the opposite direction to gold. "We expect the dollar to depreciate to $1.50 by year-end. As a result, the gold price should rise," he told Bloomberg.

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