Gold news update: Gold prices today (Wednesday) coming off two and a half months of lows.
Gold prices today (Thursday) climbed higher in morning trading, on track for global gains across three consecutive trading sessions.
Today's gold prices fell to levels not seen since mid-June. By market close Thursday, the yellow metal will have fallen for a fifth-straight session - its longest slump since June 2.
Gold prices today (Wednesday) were up a whopping $18.70 an ounce (up 1.43%) as of 12:30 p.m. EDT. Spot gold traded at $1,307.30 an ounce after closing at $1,288.60 an ounce in the previous session.
Watch for the gold spot price - the price of gold for immediate delivery - to make dramatic moves as the Federal Open Market Committee (FOMC) meets this week.
It has already had a volatile morning ahead of the meeting's Tuesday kickoff.
Gold prices today (Monday) fell sharply by 2.3% for the biggest one-day drop of 2014.
U.S. gold futures for August delivery were down $30.70 at $1,306.70 an ounce - their biggest one-day drop since December. Spot gold fell $33.50 at $1,305.50 an ounce. The sell-off happened quickly following the Comex futures market open in early U.S. trading according to Kitco, suggesting a big sell order hit the futures market at that time.
Gold prices today (Wednesday) finished back over $1,320 an ounce after the release of the latest U.S. Federal Reserve minutes, and amidst turmoil in the Middle East.
Looking at a 10-year gold prices or silver prices chart and seeing respective gains of 423% and 650% can get investors pretty excited, and for good reasons.
Whether you enjoyed the previous commodities bull run and are currently adding to your positions, or just initiating one, now is the time to buy gold and silver, as both are expected to continue climbing in value.
According to the latest survey from the Consumer Electronic Association, about 60 percent of adults plan to shop in stores or online during the holiday weekend, with the average person indicating they'll fork over $218 for gifts and merchandise from Thanksgiving through Cyber Monday.
This is a sharp increase from 2011, where shoppers said they'd spend $159.
For the ultimate gold lover on your shopping list, one amazing purchase you can nab is a Christmas tree complete with Disney characters and gold leaf ribbons made of 88 pounds of pure gold from a jewelry store in Tokyo, according to Reuters.
The ornamental tree will set you back $4.2 million, but there's also a smaller version available for $243,000.
But that's not the only thing that has grabbed my attention this holiday season. Here are 5 other amazing consumer trends that are happening around the world.
And two recent columns in particular on gold generated a larger-than-normal response.
The comments were related to the two-parter on gold prices that we published on Nov. 5 ("The Secret Gold Standard") and Nov. 13 ("Why Obama's Victory Means Higher Gold Prices").
Let's take a look at what you had to say.
The comments related to the "Secret Gold Standard" column were especially intriguing because a number of you thought I was advocating a literal return to the "gold standard."
I wasn't, of course. I employed the term as a convenient metaphor to try and help folks understand how the world's central banks were adding gold reserves for the first time in nearly a quarter century.
In fact, a global return to the gold standard isn't possible - there literally isn't enough gold to allow that to happen. It would crimp money-supply growth in such a way that global economic growth would be stymied.
A number of you wrote in to make that same point - including one reader who actually performed all the necessary calculations to make his case.
Al K. wrote in to ask: "Some analysts believe gold will drop further & others believe gold has bottomed out now. What do the experts of Money Morning believe?"
Since Al requested an "expert" opinion - a fair request - I put in a call to Chief Investment Strategist Keith Fitz-Gerald.
The Outlook For Gold PricesRight now, Keith explained, there are two separate outlooks for gold - one for the near-term and another for the longer-term.
In all, gold has made 11 short-term bottoms since May 29, the lowest being a close at $1,552.40 an ounce on June 28. Meanwhile, subsequent rally attempts have all quickly run into resistance, stalling out at near $1,620.
This start-and-stop action makes it extremely difficult for investors to avoid being "whipsawed."
Fortunately, there's a way around this dilemma: Just use an options trading strategy that lets the market itself tell you exactly when to buy gold.
And, here's the best part: This clever options trading strategy will cost you only a few dollars.
It can be used on gold futures - e.g., the standard 100-ounce CME Group contract, on any of the gold mining stocks or on the much more affordable gold-backed exchange-traded funds (ETFs) on which options trade.
Taking the Guesswork Out of Gold Prices
For ease of explanation, I'll base our example on the most popular and actively traded of the gold ETFs - the SPDR Gold Trust (NYSEArca: GLD).
Recently quoted at $155.75, the price of a single GLD share usually tracks the price of one-tenth of an ounce of gold (discounted by 2.5%-3.0% for fund expenses and storage costs for the metal that backs the shares).
Here's how you would initiate the strategy, based on actual prices available last Friday:
What comes out of the central banks could have a huge impact on the gold market. Gold prices have been on the rise - 2.5% last week - and could keep going depending on what the central banks deliver.
Gold prices on Monday saw their fourth consecutive day of increases. The August contract rose 0.1% to $1.70 with a $1,619.70 settlement price, thanks to market participants buying on optimism from this week's Fed action.
A two-day meeting begins today (Tuesday) for the Federal Open Market Committee (FOMC). After its conclusion Wednesday, market watchers will be waiting with bated breath on whether a third round of quantitative easing (or QE3 as it is fondly called) will take place.
If that isn't enough, there's Thursday's meeting over in Europe with the ECB. They're also set to make a monetary policy decision.
Let's take a look at these two potential actions that could drive up the price of gold.
Now, we don't advise jumping off the gold bull's back just yet - especially since Money Morning's leading gurus see a gold price climb to $5,000 possible over the long haul. But you may want to consider taking out a little short-term "insurance" on your precious metals profits.
In fact, we suggested readers do just that in the Aug. 22 issue of Money Morning Private Briefing. We even went a step further and issued step-by-step instructions for a gold-hedging strategy.
Just two days later, on Aug. 24, gold suffered its third-worst down day in history, plunging 5.6%.
Readers who took our advice reaped windfall profits as a result. And now we're giving you the same opportunity.
We're back today with another strategy to help "insure" your gold profits.
The Secret Way to Hedge GoldThe only thing you need to do to hedge gold is follow this simple options strategy.
And thanks to renewed inflation fears and the growing unrest in Egypt, Libya and other Middle Eastern nations, most forecasters believe the "yellow metal" still has lots of room to run.
But if you watched gold struggle during January 2011, you may also be worried about keeping those hard-won profits - even with the rebound and run to record highs that gold prices have made.
Brent crude futures contracts in London gained 0.1% yesterday to close at $116.11 a barrel, pushed higher by the Middle East crisis disrupting the oil supply. Crude for April delivery was up 0.9% to $105.36 in Monday afternoon trading on the New York Mercantile Exchange (NYMEX).
Fighting in Libya so far has reduced the country's oil output by 1 million barrels per day.