Category

Commodities

Gold

Don't Shy Away from Investing in Gold

Gold prices were up today (Thursday) as the U.S. dollar retreated against other currencies, leading foreign buyers to favor investing in gold

The most actively traded gold contract, for April delivery, rose $2.70, or 0.1%, to settle at $1,590.70 a troy ounce on the Comex division of the New York Mercantile Exchange.

"The gold market is getting propped up by a break in the dollar index," Ira Epstein, director of the Ira Epstein division at the Linn Group, told The Wall Street Journal. "The problem is, people are not buying into the rally, they're buying it on the dips."

If gold prices cross the psychologically important $1,600-an-ounce level, confidence in investing in gold could strengthen.

Until then, it looks like investors will stay busy trying to profit from the record-high Dow.

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Precious Metals

A Beginner's Guide to Buying Physical Silver

We get deluged with questions here at Private Briefing. And it's no surprise to me that the bulk of them are excellent queries. We answer them in different ways … some by writing back to the subscriber … and some as secondary topics in the daily column.

Many of your questions – like the dozens of requests we recently received about graphene – lead to actual recommendations or even special reports. Other queries will form the basis of "roundup-style" Q&As with our band of experts.

Every once in a while, however, we'll get a question that's so good, or that's so representative of other queries that we're getting, that it deserves a standalone answer.

And that's precisely the kind of question that we recently received about buying physical silver from Andy F.  It was on a topic so popular I decided to share it with our Money Morning readers as well.

Precious Metals

Gold Prices: Don't Ignore This Bullish Trend

Gold prices have been languishing in recent weeks as investors have been drawn into riskier assets such as equities.

New highs in major world stock indices including the Dow Jones Industrials and the Nikkei 225 have investors looking for higher returns.

"Investors are not really looking for safe havens at the moment," Eugen Weinberg, head of Commodities research at Commerzbank, told Reuters. "Gold as inflation protection should get more demand from investors in the second half of the year. Right now, the market participants are looking for more yield and they're finding it in other asset classes like equities."

In fact, the amount of gold held by the SPDR Gold Trust (NYSE: GLD) has been declining since it peaked on Dec. 10, 2012. It was at 1,353.35 metric tons then and now stands at 1,244.86 metric tons as money has flowed out of precious metals and into financial assets.

But not everyone is shunning gold – and you shouldn't, either.

Gold and Silver

Gold and Silver Prices Boosted by These Global Moves

Gold and silver prices both marched toward their largest gains in more than a week Tuesday joining the uplifting mood on Wall Street. As the Dow Jones Industrial Average reveled in a historic rally that took the benchmark to a record high, commodities also soared. 

Gold prices settled Tuesday's trading session up $2.50, or 0.2%, at $1,574.90 an ounce, supported by stimulus chatter and a weaker dollar. The safe haven metal had reached as high as $1,585.80 an ounce intraday, on course for its biggest leap since Feb. 26.

Year-to-date, gold has dipped 5.7%. The commodity logged its fifth consecutive month of declines in February, marking its longest stretch of declines since 1997.

Silver prices rose 1.7% to $28.97 in early trading, their biggest gain in more than a week. The white metal ended the day at $28.81.

While silver's slip since January has been more modest than gold's, it's well below the $34.89 it traded at during the same period a year ago.

But loose monetary policies worldwide, geopolitical uncertainties, rising oil prices and renewed fears of inflation should support, if not boost, both gold and silver prices in the months ahead.

Aggressive Global Stimulus Here to Stay

Driving gold and silver prices higher Tuesday were comments from Federal Reserve Vice Chairman Janet Yellen.

At the National Association for Business Economics conference Monday, the Federal Open Market Committee's (FOMC) Yellen defended the bank's $85 billion a month of bond purchases.

"At this stage, I do not see any (risks) that would cause me to advocate a curtailment of our purchase program," Yellen said.   

Yellen's sentiments mirror that of Fed Chief Ben Bernanke, who thinks continued stimulus will be good for the U.S. economy. Acknowledging there are risks from the Fed's aggressive efforts to stoke the anemic U.S. economy, Yellen added there are also risks from not being aggressive enough.

This news from overseas is also bullish for gold and silver prices…

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Precious Metals

Gold Prices Are Being Manipulated and Here's What To Do About It

If you've ever suspected gold prices are being manipulated, you're not alone–and you're right, they are.

Against the backdrop of fiscal mismanagement, political incompetence, and failed austerity measures, the world's biggest traders have all bet heavily on gold. Lately, they've been pulling out all the stops to get what they want while laughing all the way to bigger bonuses.

Today, I want to talk about who "they" are and share a few tricks you can use to capitalize on their actions without being taken to the poorhouse.

Let's begin with the concept of manipulation itself.

In order to understand the players, you have to understand their motivations. You'd think it's all about profit, but that's not entirely true.

Silver Coins

Buying Silver Coins: All You Need to Know

Investors have been buying silver coins at a lightning-fast pace this year. The U.S. Mint even sold out of 2013-dated American Silver Eagles in early January.

January Silver Eagle sales hit a record 7,498,000. After suspending sales Jan. 17, the U.S. Mint has allowed investors to resume buying silver coins, but with limits on how many coins dealers can order.

The good news: You can still cash in on buying silver coins. But before you buy, you need to know the best deals out there – and the ones to avoid.

That's why Money Morning Executive Editor William Patalon III explained everything you need to know about buying silver coins in this accompanying video.

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Precious Metals

How to Buy Silver Coins

Silver is one of the hottest investments this year, leading many investors to ask how to buy silver coins before the white metal soars to new highs.

Indeed, investors have been buying silver coins at such a rapid pace, the U.S. Mint announced Jan. 17 it had sold out of 2013-dated American Silver Eagles – just 10 days after opening sales to authorized dealers.

Opening day sales for the hugely popular bullion coins on Jan. 7 hit a record 3,937,000 coins. The tally of total sales over the 10 days the coins were available exceeded 6 million.

Sales resumed Jan. 28 after the Mint replenished its inventory, but on an allocated basis with limited orders. The Mint used the same method in 2009 and 2010 when demand among people buying silver coins also outstripped supply.

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Commodities

The Best Ways to Profit from Food Inflation

Though tame through most of last year, food inflation has begun to surge again in 2013 – just as Money Morning Global Resources Specialist Peter Krauth predicted it would.

"Food inflation hasn't reared its head for some time, and I think it's about to start making headlines again before long," Krauth wrote in a Jan. 18 note to subscribers of his Real Asset Returns investment service.

Sure enough, an inflation report yesterday (Wednesday) from the Labor Department showed that the biggest increase in January prices came in the food category.

Food prices – for both groceries and food eaten at restaurants – rose 0.7% in January, compared with December, accounting for more than three-fourths of the increase in the Producer Price Index (PPI).

The biggest driver of food inflation in January was the cost of vegetables, which rocketed 39%, withbroccoli, cauliflower and lettuce increasing the most.

The U.S. Department of Agriculture's Economic Research Service is projecting food prices in 2013 will increase 3% to 4%, an annual increase the agency says is above the historical average.

The ERS said it expects animal-based food products (mostly meats) to be hit hardest, with cereals and bakery products also seeing above-average price increases.

The return of food inflation to the U.S. should come as no surprise, as it has become a worldwide trend over the past decade.

The Food Price Index developed by Food and Agriculture Organization of the United Nations has more than doubled from 97.7 in 2003 to 209.8 now following a decade of stability. (The index stood at about 102 in 1993.)

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Commodities

Investing in Farmland: Is a Bubble Brewing?

It's little wonder that yield-starved pension funds and other investors are investing in farmland.

That's because farmland, a hard asset, produces high returns and, unlike other hard assets such as precious metals, provides investors annual income from crop sales.

The National Council of Real Estate Investment Fiduciaries (NCREIF) compiles data on the total returns (income and capital gains) on farmland purchased for investment purchases, primarily by pension funds looking for income and diversification.

In 2012, the annualized total return on investment farmland was 18.58%.

The NCREIF has data going back to 1992. Since then, the highest annualized total return was 33.90% in 2005 while the lowest annualized total return was 2.02% in 2001. Over the 20-year period from 1992 to 2012, the average annual total return was 11.83%.

And sharply higher prices for major agricultural commodities such as corn, wheat and soybeans have increased annual investment income for anyone investing in farmland.

Legendary hedge fund manager Jim Rogers has been buying farmland in Australia for a private fund.

"It's the farmers, the producers, who are going to be in the captain's seat when the prices go through the roof," he told The Australian Financial Review back in 2011.

"The world has got a serious food problem," Rogers told Time magazine. "The only real way to solve it is to draw more people back to agriculture."

But is this rush toward investing in farmland now creating a huge bubble?

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Commodities

Why Uranium Prices Are at a Critical Tipping Point

Despite the Fukushima disaster in March 2011, the demand for nuclear power continues to rise.

For uranium investors, that means the commodity is at a critical tipping point towards much higher prices.

Thanks to considerably higher energy costs, even Japan is now shifting its stance on nuclear power. According to Japan Today, newly elected Prime Minister Shinzo Abe now says he is willing to build new nuclear reactors.

That's a dramatic shift from the previous government's pledge to phase out all of the country's 50 working reactors by 2040.

But the most significant impact in nuclear power is likely to come from the developing world-especially China.

China's commitment to nuclear power means they could be adding as many as 100 nuclear reactors over the next two decades. That's a monumental shift considering China currently operates only 15 reactors.

Other nations such as Russia, India, South Korea, and the UAE are contemplating new nuclear power plants as well that would add to the 435 nuclear reactors already providing base-load power worldwide.

In this year alone, 65 nuclear power plants are under construction, another 160 new reactors are currently in the planning stages and 340 more have been proposed.

Given this ongoing shift, the demand for uranium is clearly going to be getting stronger, which presents a problem since there is already a uranium supply deficit.

According to the World Nuclear Association, total consumption of uranium was 176.7 million pounds in 2011 and growing. Meanwhile, last year's total uranium output was 135 million pounds. That's an annual deficit of roughly 40 million pounds.

Of course, you know what happens when supply can't keep pace with demand— uranium prices will begin to rise.

But that's only part of the story. Thanks to the end of a program called Megatons to Megawatts the supply deficit promises to get even worse.

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