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  • Gold Prices: Here's Why All the Hype Goes Beyond QE3 It was another bumpy week for gold prices that included two-week lows and a surge to seven-month highs.

    On Thursday, December gold futures increased $26.90 (1.5%) and settled at $1,780.50 an ounce on the COMEX.

    This represented gold's highest close since the end of the February.

    As the week comes to an end and traders waited for more news from Spain, December gold was down on Friday morning to $4.10 to $1,776.40 an ounce.

    Gold's price moves came from a number of factors this week including bargain hunters and weak U.S. macroeconomic data.

    The bottom line is that the QE3 rally might have fizzled, but the long-term gold outlook still shines brightly.

    Here's why.

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  • Investing in Gold: Why the "Golden Cross" is a Big Deal Investing in gold and silver already offered staggering profit potential, and the opportunities just got even brighter.

    Gold this week reached a "golden cross" and silver is perched to traverse one in a matter a days, following successive weeks of bullish trends in both precious metals' markets.

    A golden cross occurs when the current price of a commodity (or an equity) and the shorter term moving averages "cross" or rise above the longer term 200-day moving average.

    After 18 months of tepid and sometimes lower price movement, gold and silver have formed a large foundational base while enjoying two of the longest and strongest bull markets in history, according to research from Business Insider.

    Now the golden cross has delivered technical support for higher moves for both metals.

    "We're going to see new highs in both gold and silver in the first half of the New Year," said Money Morning Global Resources Specialist Peter Krauth. "I don't see anything that will keep this from happening."

    Here's why Krauth is so bullish on gold and silver.

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  • All Signs Now Point to Gold With another syringe of quantitative easing being injected into the U.S. economy's bloodstream, Ben Bernanke is giving the markets their liquidity fix.

    The Federal Reserve's action reaffirmed the stance I've reiterated on several occasions that the governments across developed markets have no fiscal discipline, opting for ultra-easy monetary policies to stimulate growth instead.
    The government's liquidity shot promptly boosted gold prices and gold stocks, as investors sought the protection of the precious metal as a real store of value.

    In fact, since the beginning of 1984, as money supply has risen, so has the price of gold.

    The dollar declined due to the Fed's easing, which isn't surprising, given the fact that gold and the greenback are often inversely correlated, and increasing money supply generally causes the currency to fall in value.

    What's interesting is that currency decline was what Richard Nixon sought to avoid when he ended the gold standard in 1971 and announced that the country would no longer redeem its currency in gold.

    During his televised speech to the American public, Nixon translated in simple terms the "bugaboo" of devaluation, saying, "if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today."

    As you can see below, more than 40 years later, a dollar is worth only 17 cents.

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  • Investing in Gold After QE3 It's been just four trading days since QE3 ended and gold prices are already up about $40 an ounce.

    Prior to the announcement, gold was trading at six-month highs, but dipped slightly before Thursday's anticipated news. Upon hearing the Fed's decision, gold prices shot up 2% that day.

    Here we are on Tuesday and gold prices have slightly dipped with Comex December futures declining $4.50 to $1,766.10 an ounce. Many investors have hit the sidelines to watch whether or not the Eurozone will dodge increasing doubts about its bailout agreements.

    But we're still a long way from the long-term price target for gold. Can this QE-fueled rise match ones for QE1 and QE2? History does have a way of repeating itself...

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  • Investing in Gold ETFs: Don't Miss this Bull Market The gold bull market is alive and well, meaning now's the time for investing in gold exchange-traded funds (ETFs).

    Gold kicked off the week with December futures rising $6.80 (0.4%) to $1,738.60 an ounce Monday. This came on the heels of Friday's disappointing U.S. jobs report and the anticipation of a newsworthy week for the precious metal thanks to some possible central bank action.

    Gold futures again edged higher today (Tuesday) with December futures at $1,736 an ounce. The gold price rise continues thanks to an increasing euro and the anticipation of a German court ruling Wednesday on the Eurozone bailout fund's legality.

    Adding to the bullish sentiment on gold is the anticipation of this week's two-day Federal Open Market Committee (FOMC) meeting: Will they or won't they announce another round of additional easing on Thursday?

    While these events help price outlook for gold, they're also drawing investors to gold ETFs.

    On Monday, gold ETFs rose to a record high of 72.49 million ounces, reported Reuters.

    In 2012, total holdings have increased by almost 3.5 million ounces; in the last month 2.7 million ounces flowed into gold ETFs.

    The interest in investing in gold ETFs is another bullish signal for the yellow metal, erasing some worries over the sustainability of gold's price rise.

    "With a good portion of gold's recent strength accounted for by the sharp increase in spec positioning, this certainly raises concerns on the longevity of the [gold price] move, especially with fundamental buying virtually out of the picture," Edel Tully, a strategist at UBS, said to Reuters. "But the fact that the (ETF) camp - a relatively less-fickle group of buyers - has also been giving gold its vote of confidence offsets some of those worries."

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  • Gold Bugs Love It, But a New Gold Standard is Just a Dream –For Now Thanks largely to Ron Paul, the Republicans have suddenly become enamored of gold.

    And why not?...It is real money.

    These newly-born gold bugs have even gone so far as to include a call for a commission to examine a return to the gold standard in the party platform.

    Needless to say, we've come a long way since President Richard Nixon "closed the gold window" in 1971. Forty-one years, and a few financial disasters later, the debate has begun anew.

    But it begs the question: How would the gold standard work?

    What's more, what would the economic implications be, and is it likely to happen or is it all just a gold bug's dream?

    In ancient and medieval times the answers were quite a bit more simple. Since there was no real banking system, there was also no argument.

    Kings coined money with gold, silver, or copper, and the people accepted the money at a price based on its metal content. The idea of taking paper instead would have been thought of as sheer madness.

    Only in China, an isolated and stable society, was paper money used during the Song Dynasty of the 10th through 13th centuries, but even there the Mongol invasion and fall of the Song regime caused the paper money system to collapse.

    Paper money backed by gold only became possible once modern banking got going in Europe in the 16th and 17th centuries.

    In fact, the British Gold Standard was devised in 1717 by no less than Isaac Newton, then Master of the Mint. Other countries soon joined Britain in linking their currencies to gold, including the United States from 1878 until its abandonment in 1933.

    Of course, countries claimed to be on a gold standard under the Bretton Woods Agreement from 1944-71, but gold was only exchangeable between governments. Indeed, holding gold was prohibited in the U.S. for private individuals.

    But inevitably, the Bretton Woods monetary system itself became manipulated and collapsed in inflation.

    That brings us to today....

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  • Gold Prices Jump Above $1,700, but Hurdle Ahead Gold prices have made the most out of a short trading week, and today jumped $10.50 to $1,704.50 an ounce at the Comex division of the New York Mercantile Exchange.

    Gold, which one year ago today hit a historic high of $1,920 an ounce, came out roaring Tuesday after the Labor Day holiday. Gold closed up 2.55% to reach a more than five-month high of $1,700.

    This came from increased investor hopes that the U.S. Federal Reserve will deliver QE3 to give the slowly-recovering economy a much-needed lift.

    U.S. Fed Chairman Ben Bernanke's remarks from Friday's Jackson Hole, WY speech served as the gold price catalyst.

    "Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability," said Bernanke, giving enough of a hint that QE3 was on the way in 2012.

    Gold ETFs also started strong in September after a healthy performance in August.

    On Tuesday, SPDR Gold Trust (ETF) (NYSE: GLD) holdings, the world's largest gold-backed ETF, increased to 1,293.138 tons. This is the highest level since mid-March.

    GLD's price also jumped 1.77% to 163.36.

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  • Gold Prices Await Big News from Bernanke Gold prices are desperately waiting for bullish news from the Federal Reserve this week after slipping from last week's gains.

    Last week, gold woke up from its sleepy August and increased 3.5%. It saw its greatest one-week jump since January and gold exchange-traded funds (ETFs) followed in its footsteps by reaching four-month highs and breaking 200-day moving averages.

    These jumps came in response to the Federal Open Market Committee (FOMC) meeting minutes that suggested the need for more stimulus and some sort of quantitative easing. The report release extended the recent precious metals rally initiated by European Central Bank President Mario Draghi, who pledged his commitment to keep the Eurozone in place.

    Gold prices on Monday fell from last week's high of $1,674.28 to $1,671.80, and have continued that decline this week. The most actively traded contract for December delivery was down Thursday morning by $1.10, or 0.1%, to $1,661.90 per ounce.

    So what happened to dampen last week's enthusiasm for gold?

    Europe, China Pound Gold Prices

    News from abroad knocked down some of the gold price optimism.

    Germany's Ifo Institute announced Monday that its business sentiment declined for a fourth consecutive month in August to 102.3; this came in lower than the 102.6 estimates and July's revised 103.2 figure.

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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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  • Republicans Support Return to Gold Standard Five years of liberal monetary policy have made the rarely considered notion of a return to the gold standard a genuine issue on the Republican platform.

    The Republican Party is set to announce a "gold commission" to its official policy platform in Tampa Bay this week. The move will mark the first time in three decades that the gold standard has returned to mainstream U.S. politics.

    A committee spokeswoman confirmed to CNNMoney that the new proposal to support "gold as money" will be officially decided upon at the RNC Convention.

    "Now, three decades later, as we face the task of cleaning up the wreckage of the current Administration's policies, we propose a similar commission to investigate possible ways to set a fixed value for the dollar," reads the proposal.

    Republicans' Gold Standard Proposal: A Nod to Ron Paul?

    The draft calls for an audit of Federal Reserve monetary policy and a commission to explore restoring the connection between the U.S. dollar and gold.

    Many credit the eyebrow-raising move to Texas Rep. Ron Paul, a longshot GOP presidential hopeful who has been a staunch advocate of returning to the gold standard. Paul, the token underdog in the race, does have a stream of loyal supporters who would support such a move.

    But Marsha Blackburn, a Republican congresswoman from Tennessee and co-chair of the committee, shrugs off any connection to Paul and his coveted delegates.

    "These were adopted because they are things that Republicans agree on. The House recently passed a bill on this, and this is something that we think needs to be done," Blackburn told the Financial Times.

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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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  • Gold Prices Rise as All Signs Point to More Stimulus Gold prices were on the rise again today (Wednesday) as the market digests the recent spate of global economic data that could warrant more stimulus measures - and send metals prices soaring.

    China reported last Friday that its July consumer price index (CPI) rose to 1.8% from the previous year, representing its lowest jump since January 2010. Industrial production declined to 9.2% from June's 9.5% thanks to slowing growth in heavy industrial production. Retail sales fell to 13.1% from June's 13.7%.

    There's more: July exports increased 1% from the previous year, while imports rose 4.7%, exemplifying a weak external demand, but also a slowdown in Chinese investment.

    As if this wasn't enough news to fuel a little action in the gold markets, Japan continued the trend on Monday with news that its economic growth in the second quarter had slowed down more than anticipated.

    Also triggering stimulus speculation was news out of Europe that the Eurozone's economies contracted in the second quarter. The European Union's statistics office said yesterday (Tuesday) that six countries were in recessions.

    "It looks like the gold market will continue to be held up by the sentiment of expected central-bank stimulation," Marex Spectron Group said in a report Tuesday. "The downside risk is limited."

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  • As Gold Prices Climb, This Options Trading Strategy Tells You When to Buy While most experts agree the long-term outlook for gold prices is still bullish, the yellow metal's pattern this summer can only be described as one of fits and starts.

    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:

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  • Gold Prices Waiting to Rally on Central Bank Decisions Last week it was earnings reports taking center stage, this week it's policy statements from the U.S. Federal Reserve and European Central Bank (ECB).

    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.

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  • Keep a Close Eye on Gold Prices Next Week The U.S. Federal Reserve is about to give a huge boost to gold prices, and the first push could come as soon as next week.

    The parade of dismal economic reports both here and abroad has stoked hopes that more stimulus, in the form of a third round of quantitative easing, is imminent. A clear signal of when we can expect QE3 could come at next week's two-day Federal Open Market Committee (FOMC) meeting that starts July 31.

    An increasing number of Federal Reserve officials are convinced the central bank must expand its stimulus operation immediately amid the recent spate of glum data signaling economic growth has hit a roadblock. Several members will push for urgent action, although some may move to delay a decision until September.

    Fed Chairman Ben Bernanke told Congress last week that a fresh round of quantitative easing is an option the FOMC is mulling to try and lower the elevated unemployment level.

    "We are committed to ensuring, or at least doing all we can to ensure, that we continue to make progress on unemployment," Bernanke said just last week.

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