investing in gold and silver
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Has the Great Gold Crash Divorced Bullion from Futures Prices?
In mid-April, a black swan crash-landed on the gold market.
Over just two trading days, gold futures prices shed 13%, falling from $1,575 to $1,375.
That $200 cliff dive was the largest two-day drop in 33 years.
Gold prices already had been in steady consolidation mode for 18 months. But the magnitude and swiftness of this dramatic move were rare...to the point of suspicion.
How did markets react? Unlike almost anyone expected.
What caused such a landslide, and who may be behind it? More importantly, what are the implications for the precious metals markets moving forward?
The conclusions will surprise you -- and help you invest more wisely.
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This Gold Prices Chart Answers a Classic Question
Since gold's bull run began a decade ago, many people have asked me whether the metal was in a bubble, despite the fact that there were many drivers in place for gold.
Here's another comparison - shown in the chart below - that answers this classic question.
Research firm Commerzbank's strategists recently compared the price of gold starting in 2002 to the price of Brent crude oil starting in 1998 and the NASDAQ Composite from 1990.
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Jim Rogers on Investing in Gold 2013
Money Morning Executive Editor William Patalon III recently had a chance to catch up with famed investor Jim Rogers on investing in gold, U.S. stocks, and the best commodities for 2013.
Renowned commodities investor Rogers is concerned about the worldwide economy, but he's not worried about the recent sell off in gold.
In fact, he stands poised to pounce on the yellow metal should it fall further.
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Jim Rogers on Gold Prices 2013
With the yellow metal down about 14% this year, wouldn't it be great to get the scoop from famed investor Jim Rogers on gold prices in 2013- specifically, why they're down, and if investors should still bet on a long-term gold bull market?
We had a chance to ask Rogers those very questions last weekend.
Sunday evening, Money Morning Executive Editor William Patalon III spoke on the phone with Rogers - who was at his home in Singapore - in a wide-ranging discussion about gold, U.S. stocks, commodities and global central banks' "race to the bottom" - or, as Rogers calls it, "race to insanity."
In this exclusive interview, the legendary investment guru took us on a tour of the gold market, taking a close look at what's driven the past 12 years of gold price gains - and what will move the yellow metal going forward.
He also pointed out the one fundamental reason why gold prices fell recently...
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Central Banks to Keep Investing in Gold – as Should You
Up until gold's recent plunge, there was a major story that had captured the attention of everyone investing in gold.
That story was the massive purchases over the past year or so of the precious metal by many of the world's central banks.
According to the World Gold Council, the world's central banks have been net purchasers of gold since the second quarter of 2009. Since the financial crisis central banks, particularly in emerging economies have sought to diversify away from the U.S. dollar to a safer long-term asset.
In 2012, central bank purchases hit a 48-year high. Central banks bought 534.6 metric tons of gold (about 15 million ounces) last year. This was 17% more than in 2011 and the most purchased since 1964. The biggest buyers were the BRIC countries of Russia and Brazil.
With the recent turmoil in the gold market, investors worried that these central banks would turn away from gold.
But according to Money Morning's Chief Investment Strategist Keith Fitz-Gerald, central bank buying will continue.
In fact, he believes that the amount of gold bought by central banks this year will easily double, led by central banks from the developing world.
The answer is a key factor on why to keep investing in gold in 2013.
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Investing in Gold: Here's What to Do Now
Monday's drop in gold prices was the largest one-day plunge since February 1983 - which led many of those investing in gold to bail on the yellow metal.
Gold prices tumbled $140.40, or 9.4%, to $1360.60 an ounce. This brought the two-day decline to $203.70, or 13%.
On Friday, we outlined recent factors driving gold's price plunge:
- The Federal Open Market Committee (FOMC) meeting minutes that came out last week suggested the central bank may start scaling back its monetary stimulus measures later this year, reducing inflationary pressures.
- Goldman Sachs Group Inc. (NYSE: GS) last week cut its 2013 average gold forecast, for the second time, to $1,545 from $1,610. Investors like to dump the metal after the release of bearish research.
- There have been rumors financially strapped Cyprus was selling 400 million euros of gold, 75% of its reserves to raise cash.
Gold prices ended the drastic two-day decline Tuesday, up nearly 2% to $1,387.40.
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Keith Fitz-Gerald on What's Driving Down the Price of Gold
Investors want to know: What's driving down the price of gold - and how long will the plunge last?
Gold prices tumbled Monday by more than 9% - the biggest percentage drop in 30 years.
The yellow metal had fallen to just above $1,360 an ounce Monday afternoon.
