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Precious Metals

Precious Metals

The Best Reasons to Own Gold NOW

Whether you own gold or have been sitting on the sidelines, you must be wondering whether now is the time to buy more or to finally get in the game.

The answer is one of refreshing clarity in these uncertain times.

1. Gold prices are now at or below production costs.

With gold falling to its current levels, we are very near gold production costs ($1,000 – $1,100 an ounce) for many mining companies around the world.

You can now buy gold at or near the price it would cost a mining company to get it out of the ground. Buy now and you buy right.

And don't be afraid of further price dips. Here's the likely scenario: Any further falls in prices will cause miners to cease production and/or stop opening new mines.

Supply will have a harder time keeping up with demand. Prices will rise and you will sell right. Buy low, sell high and protect your portfolio from rapid fluctuation in the market value for your securities.

Your overall nest egg will be healthier by including gold, because you can wait out the market uncertainty in your stock and bond holdings.

Precious Metals

7 Reasons to be Bullish on Gold

What's going on with gold prices?

With the price of the yellow metal near two-year lows through much of 2013, some investors wonder whether the price decline will continue.

Is this a bear market for gold or will it rebound?

A new report from analysts at Incrementum AG in Liechtenstein says there are good reasons to be bullish on gold, which was trading Wednesday at about $1,252 an ounce.

In fact, the report, titled "In Gold We Trust 2013," set a 12-month target for gold prices at $1,480 and a long-range target at $2,230.

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Precious Metals

Stay the Course with Gold as Mixed Signals Move Markets

Traders stampeded out of gold, emerging markets and bonds last month, setting record monthly outflows in June. Ever since the Federal Reserve hinted in May that signs of a stronger economy could allow for a slowdown of stimulus, markets have protested the news.

Traders Stampede to Cash

Gold has been hit hard by the tapering talk and resultant rising interest rates and liquidity drain, falling below $1,200 last week for the first time since August 2010. We're also seeing India, the world's biggest gold buyer, trying to stifle gold demand. As the government seeks to reduce its record current account deficit, it has hiked import tariffs on gold to 8 percent and introduced new constraints on rural lending against gold jewelry and coins.

Ross Norman, CEO of bullion broker Sharps Pixley, said, "It's almost as if the finance ministry is waging war on the gold sector, which would suggest that they feel they have lost control of the economy to some extent. In that environment, you would want to own gold more than ever."

Other factors fueling the liquidation were the raising of margin requirements on gold by the CME Group, the largest operator of futures exchanges in the U.S., and global liquidity concerns in the U.S. and China.

When the country with the largest GDP in the world and the country with the largest population on earth have liquidity concerns, traders run from stocks, bonds and gold, and head to cash. Even though gold traders have pulled out of their financial investments, there has been a surge in physical gold buying and central bankers have maintained their positions.

Top News

How Europe Will Help Gold Shine Again

The Good News: The euro crisis has failed to explode in the last three years, in spite of repeated predictions that it would. Many commentators now rejoice that the problem is solved.

The Bad News: Don't believe it. While a few of the countries have made steps toward recovery, there are still several that haven't, and, by and large, those that haven't are larger than those that have.

As always with European crises, the summer should be a quiet period as everyone puts aside these dire economic issues and goes on holiday. But there will be more fireworks after September's German election, when tough decisions will be made.

And that's why gold (and select emerging markets) remain strategic holdings in smart investors' portfolios.

Europe's Rogues Gallery

Greece is the worst basket case, and will almost certainly need bailing out again.

In spite of a drop in GDP of a full 25% since the start of the crisis, it is STILL expected to run a balance of payments deficit this year. That's worrying.

If you push an economy into a giant recession, you expect it to have trouble balancing its budget because government revenue declines and welfare spending increases. The Economist magazine's panel of forecasters expects Greece to run a budget deficit of 5.3% of GDP this year.

However, the balance of payments works the opposite way – a giant recession means domestic consumers can no longer afford foreign goods, while exporters can cut wages and the cost of supplies and make themselves more competitive.

Precious Metals

Why Gold is Down Today

Can a continued reaction from the Fed be why gold is down today – a week after the FOMC meeting?

Both gold and silver tumbled to near three-year lows in overnight trading.

"Actually, I think we've got multiple factors at work here," Money Morning resources expert Peter Krauth told us when we asked him to explain the 4.13% ($52.80) fall in gold prices today.

"First, it's an ongoing reaction to the Fed," said Krauth. Last week Team Bernanke sent stocks and gold tumbling on the idea that the Fed's quantitative easing measures could taper by year end.

"Second, rising interest rates create a bit more opportunity cost for owning gold," continued Krauth. "Third, we're in summer now, a seasonally weak period for gold, and finally, there's ongoing apathy for gold as official inflation remains tame."

Official government-reported inflation is 1.7%…. Although you probably would argue otherwise if you've been grocery shopping recently. That's still below the Fed's 2% target.

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Precious Metals

How to Invest in Precious Metals in 2013

Anyone thinking about how to invest in precious metals right now has been watching the plunging prices of gold and silver.

Both metals are firmly in bear market territory. By the end of last week, gold was down about 27% from its 52-week high of $1,803 and silver had cratered by a whopping 43%.

But the recent downward slide in the price of silver and gold has once again revealed to investors the most important fundamental fact about precious metals – they're incredibly volatile. Swings of 50% in value in a single year are not unheard of.

But the fact remains, there are a host of good reasons why you should know how to invest in precious metals and why they are important to a diversified portfolio.

Precious metals offer unique protection against inflation and insurance against financial or political disasters.

Because of their widespread industrial applications, they have intrinsic value.

What's more, precious metals have a low correlation to stocks and bonds — a small percentage in a portfolio can reduce volatility and risk.

And unlike the greenback, you can't print more of them.

But in-the-know investors also realize that gold and silver aren't the only precious metals on the block. In fact, there are a number of other options.

Here's how to invest in precious metals and where you should be looking for treasure right now.

Precious Metals

How to Invest in Gold: Tips from an Expert on the Yellow Metal

With gold prices near two-year lows through much of 2013, a bargain-hunting Money Morning TV viewer asked us about how to invest in gold.

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.

Check out exactly how Rick Rule would invest $100,000 today in the yellow metal in the video below.

Precious Metals

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.

Check out Rule's analysis in the accompanying video.

Precious Metals

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?

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Precious Metals

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.

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