investing in gold
One megatrend continues on its path, unperturbed, with no end in sight: The East's huge push for investing in gold.
This was discussed in a recent Money Morning article on the "Love Trade" in gold by guest writer Frank Holmes of U.S. Global Investors.
Wall Street, never enamored with investing in gold in the first place, still leads the charge to sell the precious metal at every opportunity.
Meanwhile, Asians - led by India and China - pick up as much of the shiny metal as they can every time the price is pushed lower by Wall Street selling.
Just look at what happened when gold prices hit a two-year low in mid-April thanks to huge short sales in the futures market. This set off a buying frenzy in Asia for gold, according to the World Gold Council (WGC).
The WGC says Asian gold demand in the current second quarter is expected to hit a record high. The Council expects Indian gold imports to be between 350 and 400 tons in the quarter, up 200% from a year earlier and nearly half of 2012's total gold imports!
Its managing director, Marcus Grubb, said net imports of gold into China in April alone were around 160-170 tons. Demand has continued apace since then, so the WGC believes demand could reach 880 tons this in China.
investing in gold
With Gold Prices Down, Here's Where the Money is Flowing
As pointed out in a recent article by Money Morning Global Resource Specialist Peter Krauth, there is something interesting happening with gold prices.
Paper gold, controlled by Wall Street, is going down. But demand for physical gold all over the globe is going up every time that gold prices are down.
That's not the only place divergences are occurring in the global gold market. A divergence can even be seen in the difference between Wall Street speculators and commercial interests in the paper gold market.
The speculative momentum players continue piling on shorts, while commercial interests are following a path 180 degrees opposite.
The question remains for those investors interested in gold as to who will be right in the end. The short-term Wall Street speculators or more long-term players?
The Love Trade for Gold is Still On!
Investors should have gained confidence from Ben Bernanke's recent testimony to Congress that the Federal Reserve intends on being accommodative as long as needed.
He had a laundry list of job market conditions that needed improving and reiterated that inflation remains low. It's his belief that "a premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further."
The Fed's news is "great for all of us in stocks... and not so great for those with cash in a savings account, with real negative returns for the past four years," reminded Money Map Press. Yet, at least in the short term, markets interpreted Bernanke's testimony differently, as stocks dropped during the week of May 20.
The news should also be good for gold investors.
Why Silver and Gold Prices Are Falling
Metals started the week in the red, leading investors to ask why silver and gold prices are falling today. Money Morning Capital Wave Strategist Shah Gilani joined FOX Business' "Varney & Co." to answer that question.
He told host Stuart Varney about the big trading move that pushed metals down today. He also explained why he would keep buying gold.
Shah also recommended a stock that pays a 10% dividend yield and says the stock will be "safe" as long as the housing market remains stable.
Hear Shah's recommendation and his thoughts on why silver and gold prices are falling in the following video.
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Why Gold Prices Are Going Down
Gold investors are just not feeling the love, once again left to wonder why gold prices are going down.
The yellow metal dipped again Thursday, with gold for June delivery ending down $10 at $1,386.10 an ounce. It was the sixth consecutive trading day of declines and marked a four-week low for the metal.
With equity markets continuing to log record highs, and economic data showing some signs of improvement, safe haven gold looks nothing like its moniker.
Fueling gold's recent rout is not one thing; it's a combination of things.
Here's why gold prices are going down this week.
Three Reasons to Buy Gold Stocks Today
A strong stomach and a tremendous amount of patience are required if your invested in gold stocks these days, as miners have been exhibiting their typical volatility pattern.
That's why I often say to anticipate before you participate, because gold stocks are historically twice as volatile as U.S. stocks. As of March 31, 2013, using 10-year data, the NYSE Arca Gold BUGS Index (HUI) had a rolling one-year standard deviation of nearly 35 percent. The S&P 500's was just under 15 percent.
I believe the drivers for the yellow metal remain intact, so for investors who can tolerate the ups and downs, gold stocks are a compelling buy. Here are three reasons:
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.
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.