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  • Gold Prices

  • Gold News: Why the Yellow Metal is Glistening Comex gold futures surged Friday and soared to a bright three-week high following a very dismal U.S. jobs report.

    The rally in gold came after the Labor Department reported employers added just 69,000 jobs in May, well below the anticipated 150,000. The data also pushed the unemployment level up a tick to 8.2% from 8.1%, stoking worries that the U.S. economy is still ailing and a recovery is far from certain.

    The lackluster jobs report ignited hopes that a fresh round of quantitative easing may be in the near future. Gold prices climbed on the prospect.

    Market participants returned to gold pushing the front month contract up some $59, nearly 3%, in early afternoon trading to $1,619.10 a troy ounce.

    Silver rose in concert, gaining 96 cents to $28.67.

    Trading was heavy and volatile in precious metals Friday, as traders moved quickly to cover short positions.

    To date in 2012, gold has been experiencing its worst showing since the 2008 financial crisis. But the catalysts may be aligning to turn the trend upward.

    "It's very likely that the economic data today and what's come out of Europe has convinced the market that there will be further government monetary stimulus," Robert Lutts, chief investment officer of Cabot Money Management, told Reuters. "Larger institutions will commit money to gold in ways they never had before."

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  • Here’s the Deal with Gold Prices Gold prices have slipped, and investors keep wondering how low they’ll go. Money Morning Chief Investment Strategist Keith Fitz-Gerald joined Fox Business’ “Varney & Co.” to discuss the factors keeping gold down. Fitz-Gerald said these two reasons are the main drivers behind lower gold prices. In this video he explains if those factors are long-term or not. He also discusses with host Stuart Varney how Europe may handle its debt crisis, how the strategies will further affect gold – and how the current market and economic statistics could influence election 2012. Read More...
  • Gold Mining Stocks: Now is the Time to Buy There are lots of reasons you should own some gold. Despite taking a recent breather, gold prices are still up by 139% in the last five years.

    Even so, shares of gold mining stocks have suffered lately, hurt mainly by higher energy and exploration costs.

    In fact, the stocks of the large gold miners have become nearly as undervalued as they were during the 2008 financial crisis.

    The last time shares of these big gold producers were this cheap, they rallied by 283%.

    At these levels, that means it's time to take a closer look at shares of big gold miners - while they are still a bargain.

    Here's what you need to know...

    The Gold Bull Market is Not Over

    A number of factors point to higher prices for gold:

    • Real interest rates remain in negative territory. Sitting in cash right now is a losing proposition.
    • The austerity movement in Europe is being replaced with more fiscal easing. The European Central Bank may have to print trillions of euros of debt to keep the Eurozone intact.
    • The odds of more fiscal stimulus in China and the U.S. have increased, as two of the world's largest economies struggle to gain traction.
    • Despite healthy demand and rising prices, global production of the metal rose just 0.7% annually from 1999 through 2011.
    Combined with aggressive gold-buying binges by China and other foreign governments moving away from the U.S. dollar, the stage is set for the price of gold to rally.

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  • Gold Prices: Making Sense of the "Death Cross" Gold prices have tumbled 16% since last summer and, more recently, suffered a "death cross" leading many investors to question whether or not gold's bubble has popped.

    If you're not familiar with the term, a death cross is what it's called when the 50-day moving average of the price of a traded instrument - in this case gold - crosses the 200-day moving average from above.

    I disagree.

    I think that the 16% drop since last September is simply based on a corresponding decrease in speculative interest at a time when the dollar has become the best looking horse in the glue factory.

    Traders are simply moving currencies as the euro comes apart.

    This isn't hard to understand when you consider that the dollar and gold have an inverse relationship. If one rises, the other traditionally falls.

    I don't expect that to last much longer.

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  • Europe Drives Gold Prices This Week, But Don't Lose Sight of Long-Term Gold prices managed to eke out a slight gain Friday to move back above the $1,560 a troy ounce mark - but the precious metal has had a less-than-stellar run this week, on track for a 1.9% loss.

    In London trading Friday, the spot gold price was up 0.4% at $1,563.71, bouncing from as low as $1,533.41 earlier this week.

    The upward move in gold came as the euro rebounded some from two-year lows against the dollar. The euro inched up from early lows against the dollar Friday, although sentiment around the troubled currency remains guarded.

    Gold's rise Friday also was attributed to bargain hunting, calmer markets and short covering ahead of the three-day holiday weekend.

    This week continues gold's eleven-week downward trend as the state of Greece and the entire Eurozone region has kept world markets on edge and investors jittery.

    Worries over Greece exiting the Eurozone prompted heavy selling in the currency this week as the ailing Mediterranean country, operating without a government, faces imminent default.

    "Gold's direction seems to be driven more by the level of market risk aversion and the euro currently," BNP Paribas analyst Anne-Laure Tremblay told Reuters. "Market sentiment on gold is fragile at the moment. There have been tentative rebounds, but so far bullish momentum has yet to materialize."

    As always, however, there's another side to this story.

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  • Good News for Gold Prices: Commodities are Wounded, But Far From Dead Greece is frozen in a political stalemate. Youth unemployment is running at over 50%. And there has been a $1 billion run on Greek banks.

    From near and afar, there appears to be no easy way out, especially now that the Eurozone is heading back into a recession.

    It's times like these when investors pour into the U.S. dollar for its "perceived safety."

    With commodities priced in U.S. dollars, this spike in the greenback has sent commodities-including gold prices-into a tailspin since early March.

    That has many doubters asking: "Has the commodities super-cycle ended?"

    It's a reasonable question considering the Continuous Commodity Index (CCI) is back down to levels it last saw in September 2010.

    What's more, gold prices have backed off to near $1,500/oz., and oil prices have fallen from $110 to $90/barrel.

    But as you'll see, the commodities coin does have another side.

    The Other Side of the Commodities Story

    In fact, a recent article by Frank Holmes, CEO and chief investment officer at U.S. Global Investors, pointed out how China and other emerging nations are in better fiscal shape than much of the West.

    Even if China is slowing somewhat, it is still growing at an enviable 8% per year, with only 42% debt to GDP ratio. So rather than go for more outright stimulus, it's expected that China will target new loan growth and its M2-money supply growth to around 14%.

    Meanwhile, India and Australia have just lowered interest rates while other central banks are basically refusing to raise rates.

    It means the world will keep turning, people will keep consuming and annual demand of raw materials is likely to remain elevated.

    As for gold prices, let's cut right to the chase.

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  • Gold Prices and the "Grexit" Effect Lately gold prices have been affected by a strengthening dollar resulting from troubles overseas.

    On Tuesday, Greek Prime Minister Lucas Papademos told Dow Jones Newswires that considerations were being made for a potential exit by Greece from the euro. He also warned that such an exit would be "catastrophic" for the country and that fallout across the entire Eurozone would be severe.

    Concerns over what will happen to Greece and the Eurozone if Greece leaves have caused the euro to drop to $1.255, its lowest level against the dollar since July 2010.

    These issues have led to a rising dollar as investors continue to move out of gold and into the dollar.

    "Not surprisingly, Greece is the biggest single factor behind the move [out of gold and into dollars]," said Money Morning Chief Investment Strategist Keith Fitz-Gerald on May 11. "Traders are concerned that the nation will summarily go its own way, shatter the EU's bailout and potentially sink the euro itself."

    Constant worries loom of a "Grexit" as European leaders met in an informal summit in Brussels today (Wednesday) to talk about the debt crisis and how best to spur growth in the struggling Eurozone.

    The meeting comes a day after the Organization for Economic Cooperation and Development (OECD) issued a warning that the 17 countries that use the euro risk falling into a "severe recession."

    "The crisis in the Eurozone remains the single biggest downside risk facing the global outlook," said Pier Carlo Padoan, chief economist for the OECD.

    So just how low can gold prices go?

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  • Everything You Need to Know About Gold Prices Gold's hot. Then it's not. Now what?

    Where did the love for the shiny metal go?

    Now the gold bugs are crying, and the "I told you so crowd" is warming up in the wings.

    After a stunning rally to $1,895/oz., gold prices are down hard, falling below $1,600/oz. That's a 16.11% drop that has the gold bears drooling for more-but probably not for long.

    Let's start with gold prices themselves. Right now they're down three months in a row and many gold investors fear there's no bottom in sight.

    What they don't realize is that the fall in gold prices is as rare as proverbial hen's teeth. This is the first time we've seen gold prices tumble three months in a row since March of 2001.

    In fact, since 1957 we've only seen gold prices fall three months in a row 65 times out of a total of 661 three-month periods, according to data compiled by Bloomberg and Standard and Poor's.

    But here's the thing about gold prices...

    Gold could fall all the way through May, turning what it already a rare occurrence into an ultra-rare occurrence.

    Would that be a bad thing? In the bigger scheme of things, not really.

    People forget that gold prices fell by more than half from 1975 to 1976, and were down 17 out of 24 months. At the same time, gold prices also recorded 10 three-month declines during the period.

    That was, incidentally, right before gold rose 721.25% to $850.00/oz.-- a peak gold hit on January 21, 1980.

    The point is, bear tracks always precede bull market runs. So I am not especially concerned by this pullback in gold.

    In fact, as you can see from an earlier forecast, we're right on target with my expectations for gold this year.

    Take a look at what I shared with my readers on January 2, 2012:

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  • Gold Prices to Break $2,000: Here's How You Can Profit Gold prices are still far from last year's record $1,920.30 an ounce.

    Given the economic volatility in 2011, last year was a banner year for gold prices. Fears of global market turmoil helped push the yellow metal to record highs.

    While the long-term bullish outlook for gold remains, short-term pressures have halted its steady climb.

    "Gold has found more support recently, but it doesn't have all of the catalysts in place to be driven substantially higher yet," Suki Cooper, an analyst at Barclays Capital, told Reuters.

    Here's why this dip isn't the start of a bearish gold year. Instead, it's a chance to stock up before gold prices head to $2,000 an ounce. (Want to know the best way to profit from soaring gold prices this year? Take a look at our latest special report today. It shows you how to get daily market information and specific recommendations in gold... silver... penny stocks... Asia... and biotech, to name just a few. Find the report right here.)

    The Fed, India, and Gold Prices

    For the next three months, the U.S. Federal Reserve is focused on a stabilizing U.S. economy and low inflation. In fact, the Fed's most recent forecast cooled talk of more monetary stimulus (or "quantitative easing").

    The Fed expects U.S. economic growth to progress at a steady pace throughout the quarter. With moderate expansion rather than rapid growth or deflation, there's no need to curb borrowing, and Federal Reserve Chairman Ben Bernanke plans to keep interest rates near zero.

    This bodes well for the U.S. dollar, and what's good for the dollar is often bad for gold prices.

    It's no secret that a weakened dollar sends investors running to the real value of hard commodities. A stronger dollar does the inverse: It causes the big investors to be less cautious with regard to investments in liquid capital, creating a dip in gold prices.

    Lagging Indian imports have also contributed to lower gold prices at the beginning of this quarter...

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  • The Case for Higher Gold Prices Gold prices had gold bugs giddy in the fall of 2011. In September, the luminous yellow metal touched an intraday high of $1,920 a troy ounce, putting the precious metal up roughly 35% for the year.

    At the time it seemed like investors, traders and even the guy at the corner store were all buying, hoarding, and lusting for gold.

    But the stellar gains were short lived, and by the end of the year gold prices had fallen by nearly 20%.

    Part of the striking decline in gold was due to the fact that the "smart" money that had once been amongst gold's biggest cheerleaders, sold it.

    Some booked profits, some sold it to reflect gains in portfolios, others were forced to sell to meet margin requirements, and others wanted to start the New Year with a clean slate.

    Gold Prices in 2012

    Enter 2012, and gold prices enjoyed a lustrous January, rising some 10%, helped in particular by Chinese New Year celebrations.

    Gold has since languished as investors became more willing to take on added risk, delving more into equities. While gold prices foundered, the Dow rose 8% in the first quarter, the S&P 500 gained 12%, and the Nasdaq enjoyed a nearly 19% gain.

    And more recently, not even gold's best friend, Federal Reserve Chairman Ben Bernanke, offered up much help.

    Following the commencement of the two-day FOMC meeting last week, gold experienced a volatile day, but managed to end virtually flat from the previous trading session. The Fed left interest rates steady and extinguished hopes for immediate further monetary loosening measures.

    Without a promise of more quantitative easing, long gold holders headed for the exits.

    Nonetheless, many sophisticated gold traders are poised to pounce on gold with every dip.

    Among them is the storied and accomplished commodities investor Jim Rogers.

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  • Gold Prices: How to Climb the "Golden Staircase' When U.K. subscriber John M. wrote in this week, he got right to the point.

    Asked John: "What's happening to gold prices? Why are they dropping?"

    For an answer, I speed-dialed Real Asset Returns Editor Peter Krauth - our resident expert on mining and precious metals.

    Peter is based in Canada, which keeps him close to the natural-resource companies that proliferate north of the border. He gave me a detailed and insightful answer to John M.'s question.

    And he recommended three ways to profit - including an ETF he says is perfect for first-time gold investors.

    To explain what's happened with the "yellow metal" - and to project where gold prices will go next - Peter invented a pricing theory that he christened the "Golden Staircase."

    "The bottom line, Bill, is that the price of gold has simply entered a consolidation phase - much like it has done numerous times since it entered this secular bull market back in 2001," he told me.

    Gold futures were at $1,662.40 an ounce yesterday - well off the yellow metal's high. Here's why.

    "If you think back, when gold hit its all-time high of $1,900 last August, we were in the midst of wild speculation that the U.S. government wouldn't resolve its debt-ceiling crisis," Peter explained. "A deal in Congress was reached in time, but Standard & Poor's went on to downgrade the nation's credit rating for the first time in history. Since then, there's been considerable apathy towards gold by the general investing public, pushing its price down about 13%. What's more, government-calculated inflation looks benign, taking away from gold's luster."

    And here's where it gets interesting.

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  • Gold Prices Headed for $2,000 an Ounce Gold prices this week picked up again but are still far from last year's record $1,920.30 an ounce, reached in September.

    The most-active June contract settled on the Comex Friday at $1,660.20 an ounce, for a gain of 1.8%, or $30.10, since the April 5 market close.

    Given the economic volatility in 2011, last year was a banner year for gold prices. Fears of global market turmoil helped push the yellow metal to record highs.

    While the long-term bullish outlook for gold remains, short-term pressures have halted its steady climb.

    "Gold has found more support recently, but it doesn't have all of the catalysts in place to be driven substantially higher yet," Suki Cooper, an analyst at Barclays Capital, told Reuters.

    Here's why this dip isn't the start of a bearish gold year, but a chance to stock up before gold prices thrive and head to $2,000 an ounce.

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  • Why Gold Prices Should Thrive
    Last week was a challenging one for gold investors. Gold prices have been on the downside.

    Although the yellow metal has been on a spectacular 11-year bull run, recent strength in the economy has some thinking gold's heyday is over.

    As I often say, investing, like life, is about managing expectations-even throughout gold's decade-long rise, price action over the short term can go both ways.

    It helps to look at what happens after short-term drops.

    For example, looking at the past decade of one-day 5% declines in gold, you can see that this event is pretty rare.

    In 2006, gold dropped more than 5% in a day only two times. In 2008, there were three such events.

    Another one occurred at the end of this February. Take a look:
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  • The Bernanke Effect on Gold Prices, Silver Prices Means Time to Buy Metals Gold prices hit a two-month low Wednesday after the Federal Reserve indicated no new stimulus measures would be issued, and silver prices slumped to a seven-week low.

    The metals fell after the Fed, led by Chairman Ben Bernanke, announced a positive outlook on the U.S. economy. The Fed reaffirmed it would hold interest rates near zero through 2014, and failed to mention any more means of stimulus.

    Without more Fed steps to stimulate growth, and with more positive U.S. economic data, investors expect the dollar to strengthen which puts downward pressure on gold and silver prices.

    But the long-term outlook for gold and silver is the same, and investors should instead take the Bernanke Effect as a key time to buy metals.

    "This should be treated as an opportunity to buy, or if you already own but feel you don't own enough, to accumulate," said Money Morning commodities and mining expert Peter Krauth. "These two precious metals remain in a secular bull market and are integral to every investor's portfolio."

    The Bernanke Effect on Gold Prices, Silver Prices

    After Tuesday's Fed announcement, gold for April delivery fell $51.30, or 3%, to finish at $1,642.90 an ounce. May silver slumped $1.40, or 4.2%, to $32.18 an ounce.

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  • Buy, Sell or Hold: Buy the Dips in Gold (NYSE: GLD) SPDR Gold Trust (NYSE: GLD) experienced a major pullback on Leap Day this week, dropping almost exactly 100 points on the day.

    This happened while the European Central Bank (ECB) offered its second tranche of three-year Long Term Recapitalization Operations (LTRO).

    The sell-off in gold on Wednesday is a related sign that liquidity is currently in demand.

    But you only have to look at gold's big move up since the start of 2012 to know this stage of the move was unsustainable short-term.

    It's why investors shouldn't be surprised by the pullback, and should use this latest move down to increase their long-term exposure to gold.

    This dip is a buying event and nothing more.

    The pullback in the price of gold also hit equities along with bonds and some other commodities.

    Even so, it appears that the ECB has provided enough liquidity to fight off the near-term fears.

    Once these funds begin to work their way through the system, I believe they will be bullish for commodity prices.

    Over time, banks will eventually put that capital to work, with an eye toward generating a positive rate of return on it. One of those avenues will undoubtedly be gold.

    Here's why, along with a bit of background.

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