How to Invest in Gold: Tips from an Expert on the Yellow Metal
Rick Rule, the founder and chairman of Sprott Global Resources Investments, provided the answers.
Rule says he'd put a portion of the money into gold bullion and a portion into gold stocks.
But he warns those unfamiliar with the sector should stick to what they know: If you're bullish on gold, buy gold, but realize gold stocks don't necessarily mirror the price of the yellow metal.
Rick Rule Explains Falling Gold Prices
The Federal Reserve and other central banks keep printing money. The U.S. stock market is soaring. And gold prices, after a brief recovery, have continued their plunge.
Are these phenomena connected? We put the question to one of the world's foremost gold experts, Rick Rule, founder and chairman of Sprott Global Resources Investments.
Listen to his explanation for falling gold prices in the following interview.
And even as gold prices sink, mining costs have climbed. If gold prices keep falling, miners could take "fairly drastic measures" to remain profitable, according to Rule.
With Gold Prices Down, Here's Where the Money is Flowing
As pointed out in a recent article by Money Morning Global Resource Specialist Peter Krauth, there is something interesting happening with gold prices.
Paper gold, controlled by Wall Street, is going down. But demand for physical gold all over the globe is going up every time that gold prices are down.
That's not the only place divergences are occurring in the global gold market. A divergence can even be seen in the difference between Wall Street speculators and commercial interests in the paper gold market.
The speculative momentum players continue piling on shorts, while commercial interests are following a path 180 degrees opposite.
The question remains for those investors interested in gold as to who will be right in the end. The short-term Wall Street speculators or more long-term players?
Why Silver and Gold Prices Are Falling
Metals started the week in the red, leading investors to ask why silver and gold prices are falling today. Money Morning Capital Wave Strategist Shah Gilani joined FOX Business' "Varney & Co." to answer that question.
He told host Stuart Varney about the big trading move that pushed metals down today. He also explained why he would keep buying gold.
Shah also recommended a stock that pays a 10% dividend yield and says the stock will be "safe" as long as the housing market remains stable.
Hear Shah's recommendation and his thoughts on why silver and gold prices are falling in the following video.
Why Gold Prices Are Going Down
Gold investors are just not feeling the love, once again left to wonder why gold prices are going down.
The yellow metal dipped again Thursday, with gold for June delivery ending down $10 at $1,386.10 an ounce. It was the sixth consecutive trading day of declines and marked a four-week low for the metal.
With equity markets continuing to log record highs, and economic data showing some signs of improvement, safe haven gold looks nothing like its moniker.
Fueling gold's recent rout is not one thing; it's a combination of things.
Here's why gold prices are going down this week.
Best Investments 2013: How the Mining Mess Will Send Platinum Soaring
Thanks to the hit gold prices took in mid-April, other precious metals also got caught in the downdraft – but some still look to be among the best investments of 2013.
Take platinum, for example.
It is currently trading at about $1,500 an ounce, well off its 52-week high of $1,734 an ounce. During the height of the selloff last month, it touched a low of $1,381 an ounce.
Investors sold it along with all other precious metals, even though the fundamentals for platinum may be better than ever.
While platinum's long-term outlook is bright, a short-term price catalyst is about to take place, as early as this week.
The world's biggest platinum producer, ANGLO American Platinum (Amplats), could take a significant amount of platinum off the market. The restructuring could cost 14,000 jobs and close two South African mines.
It'll also help drive a supply deficit that will only expand in the years ahead, making platinum one of the best investments to make now before prices soar.
No wonder Sprott Holdings' Rick Rule bought $280 million worth of platinum and palladium earlier this year…
Silver Prices in 2013: The Reasons for a Bold Forecast
Don't let the lackluster showing for silver prices in 2013 fool you – things are about to change.
Indeed, the white metal's performance so far has been uninspiring. Silver prices ended April down $4.14 an ounce, or 14.6%, at $24.42 an ounce, marking the third consecutive month of declines. The metal was little changed in March, trimmed by just $0.10. In February, silver shed $2.92. In January, it gained a modest $1.12.
Weighing on the white metal is record stock market rallies. In Q1, the Dow gained 11%, booking its best first quarter since 1998. The Standard & Poor's 500 Index soared 10%, and the Nasdaq was up 8%. The Dow and the S&P have gone on to hit fresh records on numerous occasions, and the Nasdaq rests at its best level since 2000.
The situation in Cyprus is also pressuring silver. Word the Cypriot government must sell 400 million euros of its excess gold reserve to raise $13.2 billion (as part of its bailout deal) sent precious metals reeling. Since Cyprus is the fifth Eurozone nation to seek a bailout, concerns are other European governments may follow suit.
Down about $6.00 an ounce, or 20%, this year, the slump presents a buying opportunity.
Investing now in beaten down silver could prove very rewarding. The silver market looks poised to repeat the 170% gain logged over the seven-month period between April-November 2011.
Money Morning Global Resource Specialist Peter Krauth, sees plenty of potential in investing in silver.
"Because the global silver market is relatively small, silver prices tend to be more volatile; the pounding selloff we witnessed in silver this past month is a testament to that fact. But volatility works both ways, so when silver rises, its prices can explode higher," said Krauth.
This Gold Prices Chart Answers a Classic Question
Since gold's bull run began a decade ago, many people have asked me whether the metal was in a bubble, despite the fact that there were many drivers in place for gold.
Here's another comparison – shown in the chart below – that answers this classic question.
Research firm Commerzbank's strategists recently compared the price of gold starting in 2002 to the price of Brent crude oil starting in 1998 and the NASDAQ Composite from 1990.
Jim Rogers on Investing in Gold 2013
Money Morning Executive Editor William Patalon III recently had a chance to catch up with famed investor Jim Rogers on investing in gold, U.S. stocks, and the best commodities for 2013.
Renowned commodities investor Rogers is concerned about the worldwide economy, but he's not worried about the recent sell off in gold.
In fact, he stands poised to pounce on the yellow metal should it fall further.