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Profit from Rising Silver Prices with These Three Picks

Silver prices rose Friday after the August U.S. jobs report release, inching toward $34 an ounce.

The gain followed silver's rise to a five-month high during trading Thursday.

Silver is the best performer for precious metals with its 16% increase in 2012, reported Reuters. This compares to gold's 8% percent rise.

For silver and gold, recent price increases have come from greater expectations for additional monetary easing from the European Central Bank and the U.S. Federal Reserve. On Thursday, the ECB added some fodder for this with its "outright monetary transaction" (OMT) program.

Next up for additional rising could come from the Federal Open Market Committee (FOMC) meeting next week. Look for a statement on Sept. 13 whether or not there will be plans for QE3.

With QE2 in 2011, silver rose to almost $50 an ounce.

Investment demand should also increase for the metal thanks to the effect of global monetary easing.

Brad Cooke, chairman and chief executive of Endeavour Silver Corp.said to MarketWatch that it will "take off again as we see more monetary inflation/economic stimulus programs by governments in America, Europe and China."

He sees silver hitting the $40 mark within the next months before it falls off again.

But for silver, there's more than just monetary easing affecting its prices.

Editors Note: Here's all the info you need to buy physical silver. [ppopup id="70925"]Click here[/ppopup].

Paul Mladjenovic, author of "Precious Metals Investing for Dummies," said to MarketWatch that "Oversized short positions in the silver futures, continued industrial demand in Asia, investment demand in the U.S. and the new applications for silver in areas such as solar power, [radio-frequency identification] technology and other new developments" are all a net positive for silver's price outlook."

He expects silver prices to "zigzag upward toward $100" an ounce by 2014.

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Why the U.S. Drought is Hitting Harder Than Most People Realize

This is an important update on the U.S. drought of 2012 and its impact on food prices, water availability, energy, and even U.S. GDP.

Even though the mainstream media seems to have lost some interest in the drought, all of us should continue to be aware of it since its ramifications are far-reaching.

As we discussed in this report, it's all connected to a larger pattern of exponential growth that is simply no longer sustainable. At stake is nothing less than the traditional American way of life.

This monumental drought has already led to sharply higher grain prices, increased gasoline costs (via the pass-through of higher ethanol costs), impeded oil and gas drilling activity in some areas (due to a lack of water), caused the shutdown of a few operating electricity plants, temporarily reduced red meat prices (but will also make them climb sharply later) as cattle are dumped in response to feed- and pasture-management concerns, and blocked and/or reduced shipping on the Mississippi River.

All this and there's also a strong chance that today's drought will negatively impact next year's Winter wheat harvest, unless a lot of rain starts falling soon.Hurricane Isaac certainly helped, but didn't go far enough.

Further, there will be a definite impact to U.S. GDP, which could add to pressures (excuses?) that the Fed may use to justify additional quantitative easing (QE) measures (otherwise known as 'printing more money').

Here's an in-depth look at why the U.S. Drought of 2012 is far from over…

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Investing in Silver: Double Down on the White Metal's Gains

Gold remains the favorite of precious metals investors, but silver is now a strong number two…with a bullet.

That means you should consider investing in silver now before it goes even higher.

In case you haven't noticed, after wallowing around in the mid-20s for months, silver prices have shot back over $30 an ounce.

And thanks to wildly bullish technical and fundamental indicators, silver could soon retest its 2011 high, or even blow through it.

If that happens, silver's run-up will hand investors a fortune, so here's how you can cash in.

Turnaround in Silver/Gold Ratio

Historically, the price of silver per ounce has usually been equal to around 1/16th of an ounce of gold,meaning it took 16 ounces of silver to equal the value of a single ounce of gold.

But over the past decade, gold has taken off, trading as high as 60-70 times the price of silver.

That is, until last year. As silver prices rose to nearly $50 an ounce, the ratio fell to 30-1.

But as prices for the white metal settled near $27, the ratio has skyrocketed back up.

Right now, you get 55 times more silver for your money than gold.

But it would still have to triple in price to even sniff where it should be in relation to gold.
And there are signs that this is just what's going to happen.

Strong Signals for Silver Price Rally

From a technical viewpoint, the rally in silver may be just beginning.

You see, the silver futures markets are in what's known as "backwardization."

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Gold Prices Going Up Regardless of Jackson Hole Outcome

Investors want to know if this week's Jackson Hole, WY meeting of central bankers will result in further stimulus measures and a rally in gold prices – but they don't have to wait to know gold is headed higher in 2012.

Gold fought back from its Tuesday morning low of $1,659.10 an ounce after a read on consumer confidence showed sentiment dropped in August to its lowest level in nine months. Americans have become increasingly worried about their employment scenarios and the overall outlook on the sluggish U.S. economy.

"Bad news is good news for gold again," Charles Nedoss of Kingsview Financial told CNBC.

Gold for December deliverylost $5.90, or 0.4%, to end at $1,669.70 an ounce on the Comex division of the New York Mercantile Exchange – but the slip won't last.

"Before you know it, gold is going to push for the next level, somewhere above $1,700 an ounce," Michael K. Smith, president of T & K Futures in Florida, told MarketWatch.

Gold glistened last week on news of possible additional monetary intervention from the U.S. Federal Reserve.

Following the release of the Federal Reserve's minutes last Wednesday, gold prices climbed to a 16-week high on hopes the central bank may engage in a fresh round of monetary stimulus to give life to the besieged U.S. economy.

"Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery," according to the Federal Open Market Committee (FOMC) meeting minutes from July 31 – Aug 1.

Gold futures for December delivery hit $1,655.90 an ounce Wednesday after the 2 p.m. announcement, marking a then four-month high.

Gold prices continued the rally Thursday, gaining some $32.70 as the metal relished in renewed safe-haven buying. The precious metal was buoyed by an uninspiring manufacturing report from China revealing production fell to a nine-month low in August. The data suggested more action may be needed to boost the Asian nation's lackluster economy.

Now analysts see even more upside potential as the gold-price trend slopes upward. Deutsche Bank AG (NYSE: DB) expects U.S. and Chinese policy measures to support gold's growth over the next quarter or so.

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Ignore the Doom-and-Gloom Crowd When They Talk About $40 Oil

I just returned from a week down South with a few of my energy clients. It's good to get my hands dirty and remind myself firsthand what is going on at the project level of some of the country's top energy companies.

But when I returned home this weekend, I made the mistake of flicking on the television and opening the newspaper.
I can't believe that the pundits are now predicting that oil will fall to $40 a barrel. They also are projecting that the entire natural gas sector is going to collapse.

Here we go again.

Yes, we are wrestling with an energy sector that remains gun shy on elements from market volatility to geopolitical tensions.
And sure, $40 a barrel is possible, but only in an improbable situation where global demand for oil completely collapses, along with the world economy.

But we are in a new reality. And such doom and gloom predictions are highly oversimplified and potentially dangerous to you as an investor.

Here's why.

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Oil Prices Promise to Head Higher As Mexican Production Dwindles

In addition to Iranian threats and growing demand, dwindling production of crude in Mexico promises to push oil prices higher as well.

Mexico is the third biggest exporter of oil to the United States. That's bad news for the U.S. economy which always gets hit when oil prices rise.

From 2004 to 2008, the U.S. Department of Energy reports such jolts, along with OPEC price manipulation, cost roughly $1.9 trillion. Plus, a recession followed each major blow.

According to the U.S. Energy Information Administration (EIA), Mexican oil production reached a peak of 3.2 million barrels a day in 2008. And by 2011, it wasn't even producing 3 million barrels a day.

Since then oil production has slipped to 2.5 million barrels a day.

Worse still, Mexico could actually become a net importer of oil within a decade if it cannot find fresh discoveries to make up for the 25% production drop since 2004 and fails to change its current policies.

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Oil Prices are Higher, But It Won't Be Much Help for Alternative Energy

Normally, when gas and oil prices accelerate on both sides of the Atlantic, alternative energy sources come into focus and become a big part of that "energy independence" discussion.

Well, not this time.

During the run up to mid-$4 gas and $147 a barrel oil in 2008, many assumed these costs would continue to advance. That made alternative sources – especially renewables such as solar, wind, biofuels, and geothermal – more attractive to investors, politicians, and energy enthusiasts.

Alternative sources are more expensive than conventional oil, gas, or coal. They are, however, more environmentally friendly. Paying those higher costs was regarded as a tradeoff for cleaner energy sources and a reduction in emissions.

Today, that view has changed.

U.S. Oil and Gas Squeezes Alternative Energy Prospects

It's part of the reason why I've recently avoided alternative energy companies like First Solar (Nasdaq: FSLR), Canadian Solar (Nasdaq: CSIQ) or SunPower Corporation (Nasdaq: SPWR) in my Energy Advantage portfolio.

The economic downturn has made reliance on more expensive energy sources a difficult proposition to accept. Renewables are hardly a convincing argument anymore, especially during a sluggish economic recovery.

Yes, increasing oil and gas prices should reduce the spread between conventional and renewable, thereby providing stronger arguments for change. And proponents argue that alternatives provide an enhanced advantage given that they can also be domestically produced.

Just don't bet on these arguments holding up this time. Here's why.

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Why a Strategic Petroleum Reserve Release Won't Help Oil Prices or President Obama

With oil prices showing no signs of retreat during the final months of the U.S. presidential campaign, beltway insiders are turning to one misguided solution to combat rising oil prices.

Releasing oil from the Strategic Petroleum Reserve (SPR).

Trial balloons floated all over Washington during the past few days. The only reason politicians didn't move on this sooner (say a few months ago) was the price level.

Until the last month or so, both oil and gasoline prices were heading in the other direction. Near-month futures contracts for West Texas Intermediate (WTI), the crude oil benchmark traded on the NYMEX, were below $78 a barrel in intraday trade toward the end of June, while the same futures for RBOB (the NYMEX traded gasoline contract) were at $2.55 a gallon.

At the time, all the sage pundits predicted that oil would fall below $60 a barrel; some even suggested that prices could approach $40. On the gasoline side, these same wise guys were proclaiming we may see prices at the pump breach $3.

Everything has changed quickly.

Yesterday morning the markets opened with WTI 23% higher than late June and RBOB up by more than 20%. Oil stands at more than $96 a barrel in New York, while Brent has exceeded $116 a barrel in London. And retail gas prices are once again approaching $4 a gallon.

Recently, I discussed why oil prices are moving up. But for some politicians, including the fellow running for reelection at 1600 Pennsylvania Avenue, those prices are becoming a job liability.

So it's back to hitting the SPR.

But there are four reasons why tapping the SPR won't make oil prices any cheaper in the end.

Maybe you should let your Congressman know about them…

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Invest in Gold Mining Stocks While They're Still a Bargain

With gold prices high and likely to go higher, this might be the best time to invest in gold mining stocks.

Gold prices eked out a small gain Friday to close at $1,616.30 an ounce.

Comments from German Chancellor Angela Merkel Thursday supporting European Central Bank President Mario Draghi's crisis strategy to do "whatever it takes" to save the euro helped push gold prices higher.

More disappointing U.S. economic news in manufacturing and housing starts could also boost the yellow metal. The more the U.S. economy struggles, the more likely the U.S. Federal Reserve will launch another stimulus program that would favor higher gold prices.

For some investors, this adds to their dilemma of whether to invest in physical gold or gold equities.

History is on the side of physical gold. Citigroup Inc. (NYSE: C) has found that in the last five years, physical gold has outperformed global gold stocks by 120%.

But because gold stocks – and gold mining stocks in particular – have lagged gold prices, they have a lot of upside potential.

What's more, gold mining stocks offer something in return – dividends – in addition to benefiting from a continued rise in gold prices. Many commodities experts think gold prices could reach $2,000 an ounce or more within the next six months.

While not quite in bull mode, gold mining stocks have begun to stir of late. Here are three gold mining stocks worth a look for gold equity investors.

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Why Investors Are Hoarding Silver

With the U.S. Federal Reserve failing to take monetary action a few weeks ago, silver prices saw an opportunity to deflate, but instead have held steady around $27 an ounce.

Investors' silver holdings are approaching record highs as speculators exit the precious metal and exchange-traded products with silver add to positions. In the last three months, these products' holdings have grown to a $16.2 billion value, reported Bloomberg News.

But they're poised to get even higher.

Analysts have forecast that silver will average $33.02 an ounce in the fourth quarter-an 18% rise from current prices.

Since last week silver has been increasing and closed up 0.35% to $28.00 on Friday.

So why are investors bullish on silver? There are a few reasons.

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