Silver
2011 Investing Strategies: Readers Turn to Silver, Avoid U.S. Dollar in the New Year
[Editor's Note: Last week we asked readers to share their 2011 investing strategies. A collection of comments is listed below, along with next week's question, "Are You Bullish or Bearish About U.S. Stocks in 2011?"]
After a year of rocky economic recovery and a mixed bag of U.S. data, market strategists are waxing optimistic about the profit prospects in 2011.
"There is still an awful lot of pain out there for sure, but if you get this creeping confidence to accelerate a little bit, it's surprising how fast things can turn," Sandy Lincoln, chief investment strategist at M&I Investment Management, told MarketWatch.
A year plagued by Europe's debt contagion, the May 6 market "flash crash" and constant fears of a double-dip recession caused many investors to keep money parked on the sidelines.
You Heard it Here First: Silver's 30-Year High is Just the Beginning
[Editors Note: For detailed investment strategies on how to play the surge in silver prices, take a look at Money Morning's 2011 Outlook report on the subject by clicking here.]
The price of silver today (Monday) surged above $30 an ounce for the first time since 1980, after U.S. Federal Reserve Chairman Ben Bernanke indicated that further quantitative easing (QE) could be on the way.
Silver futures have gained almost 70% since August, when expectations of more QE were first discussed. Since then, the Federal Reserve has set about purchasing $600 billion of U.S. Treasuries and the Fed Chairman said on Sunday that more debt purchases are "certainly possible."
The result was a rally in precious metals, which played host to investors looking to preserve their wealth against further depreciation. The price of silver topped $30 for the first time since 1980, soaring as high as $30.09 an ounce in afternoon trading.
But that's just the beginning.
Money Morning Mailbag: Soaring Gold and Silver Prices Point to Profits in Equipment & Drilling Industries
[Editor's Note: We want to hear from you! Do you have a comment, suggestion, story idea or a question? Let us know at mailbag@moneymappress.com. (**) And be sure to check back for responses to reader questions and comments.]
Gold yesterday (Thursday) continued a four-day rise soaring as high as $1,399.70 an ounce as the dollar fell for a second consecutive day.
"Gold is up primarily on dollar weakness and economic optimism," Adam Klopfenstein, a senior market strategist for Lind-Waldock, told Bloomberg. "This is very positive for gold on the future inflation front."
This week Money Morning Contributing Editor Peter Krauth showed why gold and silver are still headed for gains in the New Year, following a 2010 surge.
Question of the Week: Midterm Elections Leave Investors Wary, Turning to Silver and Gold
[Editor's Note: Last week we asked readers about the market moves they were making now that the midterm elections ended. Some of our readers' responses are listed below - along with next week's question, "Are You - And Your Wallet - Seeing Signs of Inflation?"]
The hotly contested midterm elections ended last week, and now U.S. voters will watch to see if newly elected officials will deliver on promises to lift the nation out of its economic morass.
Many voters made their decisions out of frustration with current economic conditions, such as excessive government spending, ineffective stimulus measures and stubborn unemployment. And given the potential for change in U.S. economic policy, investors will likely be eager to see what the stock-and-bond markets will do in the months to come.
Although there is unlikely to be any quick decision making in Washington, investors will hope for the status quo in at least one area – a continued market rally, which is the norm for midterm election years.
CFTC Investigates JPMorgan, HSBC as Firms Sued for Silver Market Manipulation
JPMorgan Chase & Co. (NYSE: JPM) and HSBC Holdings Plc (NYSE ADR: HBC) were hit with two lawsuits Wednesday by investors alleging the companies conspired to drive down silver prices and gain hundreds of millions of dollars on short positions.
Two traders, Brian Beatty and Peter Laskaris, are accusing the big banks of attempting to manipulate the market for silver futures and options contracts since 2008. The complaints allege the defendants gained millions "if not billions of dollars in profits" by suppressing silver futures and making their short positions on the metal more lucrative.
The plaintiffs said they traded COMEX silver futures and options contracts and lost money due to the manipulation. Laskaris alleges that the banks informed each other of large trades and flooded the market with a disproportionate number of orders, according to Forbes.
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