investing in gold

7 Reasons to be Bullish on Gold

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What's going on with gold prices?

With the price of the yellow metal near two-year lows through much of 2013, some investors wonder whether the price decline will continue.

Is this a bear market for gold or will it rebound?

A new report from analysts at Incrementum AG in Liechtenstein says there are good reasons to be bullish on gold, which was trading Wednesday at about $1,252 an ounce.

In fact, the report, titled "In Gold We Trust 2013," set a 12-month target for gold prices at $1,480 and a long-range target at $2,230.

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Why Gold Prices Are Going Down Today

The answer to why gold prices are going down today isn't hard to find - it's a testament to the power behind Fed Chairman Ben Bernanke.

Comex August gold fell $76.50, or 5.56%, to 1,229.50 in early morning trading Thursday. The August contract traded as low as $1,285.00 in overnight trading as the U.S. dollar rose to the highest in more than a week against six major currencies.

Gold prices plunged Thursday to near three-year lows as precious metals investors took a "risk-off" stance following Wednesday's FOMC meeting. Bernanke announced that the current $85 billion worth of monthly bond purchases could slow near the end of this year, and end in 2014, if the economy keeps improving.

He said interest rates could increase "far in the future."

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How to Invest in Gold: Tips from an Expert on the Yellow Metal

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With gold prices near two-year lows through much of 2013, a bargain-hunting Money Morning TV viewer asked us about how to invest in gold.

Rick Rule, the founder and chairman of Sprott Global Resources Investments, provided the answers.

Rule says he'd put a portion of the money into gold bullion and a portion into gold stocks.

But he warns those unfamiliar with the sector should stick to what they know: If you're bullish on gold, buy gold, but realize gold stocks don't necessarily mirror the price of the yellow metal.

Check out exactly how Rick Rule would invest $100,000 today in the yellow metal in the video below.

Gold Prices Are Bargain for India's Consumers, But Problem for Government

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The last several months have been tough on gold prices, but gold bugs haven't lost their insatiable appetite for the yellow metal. With gold officially in a bear market, demand is surging at today's bargain prices.

Gold demand is especially strong in India, where gold is the investment of choice among consumers. India's gold imports reached 162 tons in May, almost twice the average level.

That's why last week the country - the world's biggest consumer of gold - increased the duty of gold imports for the second time in six months.

The duty was boosted from 6% to 8% on gold ore, and from 5% to 7% on intermediate products
in attempts to decelerate the accelerating gold demand. Bullion prices fell 0.25% to $1,399.36 an ounce following the move.

Gold imports are one of the biggest contributors to India's mushrooming account deficit (which occurs when imports exceed exports). An increasing deficit affects the country's foreign exchange reserves and the value of its currency.

Friday, the ruppe closed below the key 57 mark against the U.S. dollar for the first time in a year. The slide further casts a shadow on India's economy amid pricier imports and heightened inflationary risks.

Policy makers in India have been attempting to reduce its deficit and improve finances as it faces possible rating downgrades. They hope the duty increase will help.

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Rick Rule Explains Falling Gold Prices

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The Federal Reserve and other central banks keep printing money. The U.S. stock market is soaring. And gold prices, after a brief recovery, have continued their plunge.

Are these phenomena connected? We put the question to one of the world's foremost gold experts, Rick Rule, founder and chairman of Sprott Global Resources Investments.

Listen to his explanation for falling gold prices in the following interview.

And even as gold prices sink, mining costs have climbed. If gold prices keep falling, miners could take "fairly drastic measures" to remain profitable, according to Rule.

Check out Rule's analysis in the accompanying video.

Asia's Love Affair with Investing in Gold Continues

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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.

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With Gold Prices Down, Here's Where the Money is Flowing

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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?

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Are Gold Prices Near a Bottom?

It's been a tumultuous couple of months for the yellow metal, which has investors asking: Are gold prices near a bottom?

There's hope this price plunge is ending.

Year-to-date, gold is lower by 17%. But after seven trading sessions where gold prices slumped, on Monday June gold futures gained 1.4%, or $19.40, to $1,384.10. Contract prices bounced as much as 2.4% after sliding 2.1%.

Now technical analysis points to a rebound in the yellow metal to $1,500 in June, following the "double bottom" hit Monday.

A double bottom involves three moves: a drop, a rebound, and another drop to the previous low. Chart watchers deem the pattern as bullish. A classic double bottom reversal typically marks an intermediate or long term change in trend.

"This shows that gold is probably ready to climb," Matthew Schilling, a commodity broker at Chicago based R.J. O'Brien told Bloomberg News. "The reversal was proof that we have found a bottom."

In just 10 minutes Monday, in the wake of gold's rally, holdings in exchange-traded products backed by gold soared by $1.7 billion.

Fueling the buying were comments from Moody's that a downgrade of U.S. debt is likely if the government fails to get its finances in order in 2013.

To get more info, we asked Morning Morning Global Resource Specialist Peter Krauth if he thought a gold-price bottom was near.

"I thing gold is somewhat oversold," Krauth said. "Yesterday's price action, when gold shot up by about $40 within four hours seems to reflect the thinking that it's due for a bounce."

Krauth said this year's gold price correction was expected.

"After a 12-year bull market with no true correction like that in 1974-1976 time frame, one more is due. I would not be surprised to see gold eventually correct a bit further before making a final bottom.

"That being said, if it were to turn up and stay above $1,550, then it's likely this correction would be over," he continued.

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Why Silver and Gold Prices Are Falling

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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

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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.

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Has the Great Gold Crash Divorced Bullion from Futures Prices?

The Great Gold Crash in April has likely set in motion one of the biggest shifts in precious metals markets in a lifetime.
While some big players likely stepped in to crush the markets for personal gain, they may have accidentally also made a move that will divorce gold and silver bullion pricing from gold and silver futures.
Forget about gold miners vs gold stocks, we're talking a whole other level of magnitude if this trend takes hold.
Here's a look at the circumstances, the players and what to expect next...

Jim Rogers on Investing in Gold 2013

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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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