Gold

Why The Fiscal Cliff "Deal" is Spelled P-O-R-K

Savings piggy bank

Behind the scenes of the Fiscal Cliff debate, there was plenty of f-bombing, poison pilling, and grandstanding leading up to the deal - and that was before the members of Congress and the Senate actually got serious with their usual ultimatums, followed by earnest- looking sound bites and posturing. But what gets me really riled up is the amount of "pork" contained in the bill...

Seven Ways to Tell if Your Gold Is Counterfeit

Gold bars I had just finished a walking tour of the Royal Canadian Mint when I saw it. Right there, out in the open, was a 400-ounce bar of pure gold.

It was chained to a display table and kept safe by an armed guard. At the time, in 2005, the bar was worth $220,000.

Today, the same bar is worth $549,200. In just eight years, gold prices have jumped by 150% -- and that's even with a 27% drop from the peak of $1,900 in 2011.

But it's not the eternal fascination with gold that has boosted the price. With growing levels of worldwide uncertainties, mounting inflation risks, and government distrust, people are clamoring for gold primarily as insurance.

According to the World Gold Council, 2011 saw gold bars and coins reach nearly $77 billion in sales, versus 2002's $3.5 billion. And in November alone, the U.S. Mint's sales of the popular American Eagle coins jumped 131% in the wake of the election.

Editor's Note: Right now, four separate indicators are saying gold is set to surge. Any one of them is bullish on its own. But when all four signals flash at once...

With the market for gold growing at a feverish pace, it's now more important than ever to know that your gold is the real deal - especially now that gold has begun to show signs of a strong rebound.

Here's why...

Gold counterfeiting is nothing new. In fact, just recently there were reports of fake gold bars from China turning up in New York. Instead of gold, their centers were stuffed with tungsten.

But rest assured there are a number of methods you can use to mitigate the risks of ending up with counterfeit gold. Some are simple, quick, and inexpensive. Others are more elaborate, detailed, and not so readily accessible.

Here are seven ways to find out if the gold you own is real:

To continue reading, please click here...

Your 2013 Guide to Investing in Gold

Gold bullion, gold stocks or no gold at all?

I put that question to Real Asset Returns Editor Peter Krauth last week.

You see, there's a lot of interest in investing in gold right now. Or perhaps I should say that there's a lot of interest in what gold might do.

And you can certainly understand why.

From its November 2008 market lows, the SPDR Gold Trust (NYSE: GLD) - the No. 1 proxy for the "yellow metal" - rose as much as 158%, reaching its peak in September 2011. But it's down about 13% since that time (though it's up 5% year to date), and a lot of folks are wondering what gold is worth, and how they should play it.

Wall Street has grown more tepid on gold, with many of the investment banks ratcheting back just a bit on their target prices. But most also see prices heading up to and beyond the $2,000 level in 2013, meaning they see a potential gain of 22% or better.

Peter's target price is a bit more aggressive: He sees gold trading as high as $2,200 an ounce - 34% above current prices in the $1,640 range.

I've worked with Peter for several years now, and admire the way he works.

He based himself in resource-rich Canada in order to be closer to the many companies that he covers. And he's made a number of truly superb market calls: In September 2010, for instance, when silver was trading at $19 an ounce, Peter told investors the metal was a "Buy" - and we then watched it soar to a high of $48 (a 153% windfall).

So when I decided to bring you the latest insights on gold - and some recommendations, as well - I went to Peter.

To continue reading, please click here...

Why Japan's "Lost Decades" Are Headed to America in 2016

It's only been a little more than a week since Shinzo Abe won election as Japan's latest Prime Minister in a landslide-election victory and the pundits are already lining up telling investors to "buy Japan" because it's "dirt cheap."

The hope is that Abe's promises of fresh stimulus, unlimited spending and placing a priority on domestic infrastructure will be the elixir that restores Japan's global muscle.

As a veteran global trader who actually lives in Japan part time each year, and who has for the last 20+ years, let me make a counterpoint with particular force - don't fall for it.

I've heard this mantra eight times since Japan's market collapsed in 1990 - each time a new stimulus plan was launched - and six times since 2006 as each of the six former "newly elected" Prime Ministers came to power.

The bottom line: The Nikkei is still down 73.89% from its December 29, 1989 peak. That means it's going to have to rebound a staggering 283% just to break even.

Now here's the thing. What's happening in Japan is not "someone else's" problem. Nor is it something you should gloss over.

In fact, the pain Japan continues to suffer should scare the hell out of you.

And here's why ...

The so-called "Lost Decade" that's now more than 20 years long in Japan is a portrait of precisely what's to come for us here in the United States.

Perhaps not for a few years yet, but it will happen just as we have already followed in Japan's footsteps with a "lost decade" of our own.

The parallels are staggering.

To continue reading, please click here...

To continue reading, please click here...

Why Are Gold Prices Down?

Gold prices plunged Thursday, hitting lows not seen since August, after the U.S. Commerce Department reported an unexpectedly robust reading on third quarter U.S. gross domestic product (GDP).

After the surprising strong report, February gold tumbled $14.50 an ounce to $1,653.50 and spot gold sank $22.80 to $1,643.10.

Silver prices fell as well, losing $1.13 to $29.95 shortly before noon. Prior to the report, the yellow and white metals were little changed.

The fresh report revealed GDP in the third quarter expanded at an annual rate of 3.1%, the fastest growth since late 2011. That was up from the 2.7% pace logged last month, and better than economists' expected 2.8% rate.

Phil Streible, a senior commodity broker at R.J. O'Brien & Associates in Chicago told Bloomberg News, "The GDP number was better than forecast, so the thinking is that improving conditions in the economy might mean a light at the end of the tunnel on when the Fed will end QE3."

Gold and silver have been big beneficiaries of the FOMC's generous QE3 programs.

But there's more than the end of QE measures as to why gold prices are down.

To continue reading, please click here...

Gold Prices: What Happened to the Rise?

One of the more confusing things for investors right now is why gold prices aren't going through the roof. As the Fed, European banks, China and Japan pump massive amounts of money into global markets, investors are scratching their heads when they look at the price of gold. Since reaching the $1,800 an ounce level […]

Read More…

Gold Prices: Where to Now After the Sell Off

After the final Federal Open Market Committee (FOMC) meeting decision of the year Wednesday, gold prices got good news: the Fed will institute a new bond-buying program. February Comex gold increased $8.30 (0.5%) Wednesday and settled at $1,717.90 an ounce. And then the sell-off started. Gold fell 1.2% in the next session to $1,696.80, for […]

Read More…

How Gold Miners Can Effectively Leverage Gold Prices

Gazing into their crystal balls last week, Wall Street firms interpreted differing futures for gold next year.

Morgan Stanley awarded gold the "best commodity for 2013" while Goldman Sachs called the end of the metal's hot streak.

After seeing 11 consecutive years of positive performance from gold price, one needs to be wary of research analysts' price forecasts, as they have consistently underestimated the shifting dynamics driving the precious metal higher.

Take a look at analysts' annual predictions of gold prices, which is "a telling picture," CEO Nick Holland of Gold Fields told the crowd at a mining conference last summer.

From 2006 through 2011, Bloomberg's contributing analysts have forecasted that future gold prices would be lower. "The analysts who keep telling us the gold price is going down have been wrong seven years out of seven. That's a remarkable track record!" says Holland.

Take a look at the chart...



To continue reading, please click here...

Investing in Gold: What to Expect from Prices Before 2013

It's been a down week for gold prices, reaching one-month lows, but on Thursday, things began to turn around for the precious metal.

Due to short-covering in anticipation of Friday's employment numbers and comments from European Central Bank (ECB) President Mario Draghi raising expectations for an interest rate cut, Comex February gold rose $8 an ounce to $1,701.80.

Gold exchange-traded funds (ETFs) also had a good day on Thursday as they hit record highs of 76.133 million ounces.

Peter Spina, president of Goldseek.com said to Investor's Business Daily of Thursday's levels, "If gold does remain around these levels for the near term (several months), this remains a very healthy gold market, which will set the tone for the next move up."

After the November U.S. jobs report, which had been expected to be skewed from Superstorm Sandy, came out better-than-expected on Friday, gold went above $1,700 again. Expectations for Federal Open Market Committee (FOMC) easing fell a bit.

Until the Dec. 10 and Dec. 11 FOMC meeting ends, investors are expected to hit the sidelines.

At next week's meeting, FOMC members will decide what to do with "Operation Twist" as it comes to an end. Many think they will extend it, plus implement a "QE4."

This would be good for the precious metals markets. But gold prices are affected by much more than the FOMC.



To continue reading, please click here...

How to Buy Gold: Don't Miss the Yellow Metal's Next Move Up

With experts predicting rising gold prices for at least the next year, it's no surprise that more and more investors want to know how to buy gold.

According to the facts and figures cited last week by Money Morning Global Resources Specialist Peter Krauth, 2013 should be a banner year for gold. Krauth projects prices for the primary precious metal could easily climb from the current $1,704 an ounce to $2,200 - or even more - a one-year gain in excess of 25%.

That means every serious investor should have at least some gold in their portfolio.

That raises two immediate questions:
1) What are the best vehicles for investing in gold; and,
2) What are the best ways to buy the yellow metal?

For each investor, the best approach to how to buy gold depends on your goals and expectations.

How to Buy Gold

If you're worried global political and economic tensions will intensify, then holding the actual physical metal is your best choice.

Possible flash points include strife in the Middle East, a meltdown in the Eurozone debt crisis, a continued slowing of China's growth rate and, of course, the U.S. fiscal cliff crisis, which could plunge America and perhaps the world economy back into recession - or worse.

Under such conditions, purists feel holding physical gold provides the only truly effective hedge against almost certain declines in the value of the dollar and other fiat currencies - declines that could be amplified by sharp reversals in global financial markets.

For smaller investors, how to buy gold in physical form typically means buying gold bullion bars, rounds (unadorned coin-shaped pieces) or minted gold bullion coins.

To continue reading, please click here...

Why Gold Prices Will Soar After the Dec. 12 FOMC Meeting

Gold prices will start another epic run beginning Dec. 12 - the day the Federal Reserve will double down on QE3 at its Federal Open Market Committee (FOMC) meeting.

Decisions made at the Dec. 12 FOMC meeting could add as much as $2.2 trillion to the Fed's balance sheet over the next two years, which will turbocharge gold prices, silver prices and oil prices.

The FOMC is the select group within the Fed that sets monetary policy, such as interest rates and the bond-buying programs known as quantitative easing, or QE.

That the Fed will dramatically increase QE3, which launched in September with the monthly purchase of $40 billion in mortgage-backed securities (MBS), at the Dec. 12 FOMC meeting is almost a given; it practically has no choice. QE3.

But the real issue at the Dec. 12 FOMC meeting will be what to do about the Dec. 31 expiration of the Operation Twist program. In Operation Twist, the Fed sells about $45 billion of short-term Treasuries each month and uses the proceeds to buy long-term Treasuries.

The Fed probably would opt to extend Operation Twist - which has not added to the Fed's balance sheet as QE1, QE2 and QE3 have -- except that it is starting to run low on short-term securities to sell.

Yet the Fed committed in October to extending its easing policies as long as necessary to bring down unemployment and aid the U.S. economy. Its only option is to convert Operation Twist to a conventional bond-buying program - effectively doubling its QE3 money-printing.

"Our baseline expectation is a continuation of the current pace of asset purchases of $85 billion per month on an open-ended basis, which would imply that the current $45 billion per month in [Operation] Twist-financed Treasury purchases is replaced by $45 billion per month in QE-financed Treasury purchases," Jan Hatzius of Goldman Sachs (NYSE: GS) said of the likely actions at the Dec. 12 FOMC meeting.



To continue reading, please click here...

Why Brazil Will Keep Buying Gold – and Driving Up the Price

Money Morning Global Resources Specialist Peter Krauth stated in his 2013 gold price forecast that the yellow metal was headed to $2,200 an ounce next year, with one of the main price drivers being the increased rate at which central banks are buying gold.

As a group, central banks will have bought about 500 tons of gold this year, the most in more than 40 years. More large purchases are expected in 2013.

Foremost amongst the gold buyers are the central banks of emerging economies around the globe. Recent years have seen purchases by Russia, South Korea, Mexico, India and, as most believe, China.

Another country joining the party, or in this case the carnival, is Brazil.

According to the International Monetary Fund, Brazil raised its gold reserves for the second month in a row in October. Brazil made its first significant gold purchase in more than a decade in September. It expanded its gold holdings by a hefty 17.2 tons last month to 52.5 tons.

This is the largest amount of gold Brazil has held in more than 11 years, since January 2001.

So why is Brazil jumping aboard the bandwagon now and buying gold at a record pace?

To continue reading, please click here...

2013 Gold Price Forecast: Expect Gold to Deliver Another Record-Setting Year

No two bull markets are ever the same, and gold is no exception.

During the last secular gold bull market in the 1970s, gold rose from $35 in 1968 all the way to $200 by late 1974.

Then the unthinkable happened. Between late 1974 and mid-1976, gold prices were cut in half, dropping from about $200 to $100.

At the time, many gold investors sold out in disgust, never to return.

But then a funny thing occurred. Gold prices started to climb again, rising from $100 in mid-1976 all the way to $800 by January 1980.

And anyone who was fortunate enough to own gold at $35 earned better than 20 times their investment in just 12 years.

Twenty-one years later, a new bull market began. Since 2001, gold has consistently performed in what now appears to be a record-setting run.

2013 gold price forecast

In fact, since 2001 the average return on gold is now just shy of 18% annually over the last 11 years.

I know of no other major asset that has turned in this kind of performance -- ever. This rise in gold prices is simply unmatched.

This is what a stealth bull market looks like, one that I fully expect will keep powering on.

Now, let's have a look at where gold prices might be headed in 2013...

To continue reading, please click here...