Category

Commodities

Commodities

How a Massive Landslide Shifts Copper Supply

The U.S. mining industry was dealt a devastating blow as Kennecott Utah Copper's Bingham Canyon Mine experienced a pit wall failure causing a massive landslide with rocks and dirt covering the bottom of the mine pit. It's a miracle no one was hurt due to the vigilance of its owner, Rio Tinto.

Brian Hicks, portfolio manager of the Global Resources Fund, is very familiar with the mine, having visited it often. He also has personal ties as both of his grandfathers were once employed by the mine. When Brian saw the photo of the landslide posted on the web, he said the substantial destruction of the collapsed wall and falling rock was apparent, yet the tremendous scale and magnitude of the mine cannot be captured in pixels.

Precious Metals

If You're Worried About Gold Prices, You Need to Read This

When stocks fall by 20% or more from their peak, it's labeled as a "bear market."

With gold prices down 26% from their record close back in August 2011, the "yellow metal" has entered a bear market of its own.

It took an especially ugly day on Monday to get us to that point.

Two days ago, gold prices plunged as much as 9.7% – the biggest decline since 1980 – and continued a sell-off that saw the yellow metal fall by 4.7% last week, including a 4.1% drop on Friday.

The metal has now fallen 26% from its Aug. 22, 2011 settlement record of $1,888.70.

To get some expert insights on this sell-off, I telephoned Peter Krauth, our resident natural resources expert and editor of our Real Asset Returns research service. Peter based himself in Canada to be closer to the miners and natural-resources companies he covers for his subscribers.

I asked Peter for insights on the following three questions:

Energy Investing

Why Oil Prices Aren't Coming Down Despite Big U.S. Oil Boom

The dual promise of the U.S. shale oil boom was that it would reduce our dependence on foreign oil and lower oil prices that would benefit U.S. consumers via cheaper gasoline.

But while U.S. oil production continues to rise, and gasoline consumption continues to fall, gas prices have remained stubbornly high: The national average was about $3.65 last week.

And that trend is expected to continue, with the United States surging past Saudi Arabia as the world's largest producer of crude oil as soon as 2020. Meanwhile, U.S. gasoline demand is at its lowest in more than a decade – down to 8.7 million barrels a day.

Facts like that have led some pundits to predict falling oil prices. Last year, some politicians were promising that stepped-up U.S. oil production could lower gasoline prices to $2.50 a gallon.

Frustrated U.S. drivers struggling to cope with high gas prices were eager to believe such promises, no matter how unlikely.

Unfortunately, all that new U.S. oil, while helpful in some ways, will not have much effect on gas prices – either now or in the foreseeable future.

"The problem is that prices are not just reflective of new supplies, either too much or too little," explained Money Morning Global Energy Strategist Dr. Kent Moors. "By focusing only on how much is there, these analysts provide a fundamentally distorted view of the oil market."

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Investing Tips

What Maslow and Rand Would Tell Investors Today (And How It Relates To Gold)

I have always been fascinated by what motivates people. What motivates Tiger Woods to pursue the goal of being the world's greatest golfer?

What's the motivation driving Warren Buffett to continue purchasing companies instead of retiring in Tahiti?

Or how about the motivation behind the trucks allegedly packed with euros parked in front of the Central Bank in Nicosia?

What is most puzzling is the motivation driving investors to buy or sell their equity positions when research shows that holding an investment over the long-term is more successful than timing the market.

As Business Insider puts it, there's "proof that [investors] stink at investing." Its headline is catchy, and the chart shows the evidence, as the average investor has significantly underperformed oil, stocks, gold and bonds in the past 20 years. While, on average, investors returned 2 percent, oil, stocks and gold rose about 8 percent.

After inflation, the average Joe or Jill actually lost money.

Commodities

How to Double Your Money by Investing in Copper

Copper prices are up 170% over the past four years – meaning huge profits for anyone who has been investing in copper.

But now many investors are bailing on the red metal. Prices have slipped about 9% this year, and inventories are soaring.

Copper prices hit an eight-month low today (Wednesday) as slowing economic growth has led speculators to take more short positions on the metal.

Copper inventories also appear to signal low demand. Stockpiles of the red metal in the London Metals Exchange are at the highest level since October 2003.

But what appear to be bearish signals for investing in copper are not the case. Here's what investors need to understand…

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Gold

Don't Shy Away from Investing in Gold

Gold prices were up today (Thursday) as the U.S. dollar retreated against other currencies, leading foreign buyers to favor investing in gold

The most actively traded gold contract, for April delivery, rose $2.70, or 0.1%, to settle at $1,590.70 a troy ounce on the Comex division of the New York Mercantile Exchange.

"The gold market is getting propped up by a break in the dollar index," Ira Epstein, director of the Ira Epstein division at the Linn Group, told The Wall Street Journal. "The problem is, people are not buying into the rally, they're buying it on the dips."

If gold prices cross the psychologically important $1,600-an-ounce level, confidence in investing in gold could strengthen.

Until then, it looks like investors will stay busy trying to profit from the record-high Dow.

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Precious Metals

A Beginner's Guide to Buying Physical Silver

We get deluged with questions here at Private Briefing. And it's no surprise to me that the bulk of them are excellent queries. We answer them in different ways … some by writing back to the subscriber … and some as secondary topics in the daily column.

Many of your questions – like the dozens of requests we recently received about graphene – lead to actual recommendations or even special reports. Other queries will form the basis of "roundup-style" Q&As with our band of experts.

Every once in a while, however, we'll get a question that's so good, or that's so representative of other queries that we're getting, that it deserves a standalone answer.

And that's precisely the kind of question that we recently received about buying physical silver from Andy F.  It was on a topic so popular I decided to share it with our Money Morning readers as well.

Precious Metals

Gold Prices: Don't Ignore This Bullish Trend

Gold prices have been languishing in recent weeks as investors have been drawn into riskier assets such as equities.

New highs in major world stock indices including the Dow Jones Industrials and the Nikkei 225 have investors looking for higher returns.

"Investors are not really looking for safe havens at the moment," Eugen Weinberg, head of Commodities research at Commerzbank, told Reuters. "Gold as inflation protection should get more demand from investors in the second half of the year. Right now, the market participants are looking for more yield and they're finding it in other asset classes like equities."

In fact, the amount of gold held by the SPDR Gold Trust (NYSE: GLD) has been declining since it peaked on Dec. 10, 2012. It was at 1,353.35 metric tons then and now stands at 1,244.86 metric tons as money has flowed out of precious metals and into financial assets.

But not everyone is shunning gold – and you shouldn't, either.

Gold and Silver

Gold and Silver Prices Boosted by These Global Moves

Gold and silver prices both marched toward their largest gains in more than a week Tuesday joining the uplifting mood on Wall Street. As the Dow Jones Industrial Average reveled in a historic rally that took the benchmark to a record high, commodities also soared. 

Gold prices settled Tuesday's trading session up $2.50, or 0.2%, at $1,574.90 an ounce, supported by stimulus chatter and a weaker dollar. The safe haven metal had reached as high as $1,585.80 an ounce intraday, on course for its biggest leap since Feb. 26.

Year-to-date, gold has dipped 5.7%. The commodity logged its fifth consecutive month of declines in February, marking its longest stretch of declines since 1997.

Silver prices rose 1.7% to $28.97 in early trading, their biggest gain in more than a week. The white metal ended the day at $28.81.

While silver's slip since January has been more modest than gold's, it's well below the $34.89 it traded at during the same period a year ago.

But loose monetary policies worldwide, geopolitical uncertainties, rising oil prices and renewed fears of inflation should support, if not boost, both gold and silver prices in the months ahead.

Aggressive Global Stimulus Here to Stay

Driving gold and silver prices higher Tuesday were comments from Federal Reserve Vice Chairman Janet Yellen.

At the National Association for Business Economics conference Monday, the Federal Open Market Committee's (FOMC) Yellen defended the bank's $85 billion a month of bond purchases.

"At this stage, I do not see any (risks) that would cause me to advocate a curtailment of our purchase program," Yellen said.   

Yellen's sentiments mirror that of Fed Chief Ben Bernanke, who thinks continued stimulus will be good for the U.S. economy. Acknowledging there are risks from the Fed's aggressive efforts to stoke the anemic U.S. economy, Yellen added there are also risks from not being aggressive enough.

This news from overseas is also bullish for gold and silver prices…

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Precious Metals

Gold Prices Are Being Manipulated and Here's What To Do About It

If you've ever suspected gold prices are being manipulated, you're not alone–and you're right, they are.

Against the backdrop of fiscal mismanagement, political incompetence, and failed austerity measures, the world's biggest traders have all bet heavily on gold. Lately, they've been pulling out all the stops to get what they want while laughing all the way to bigger bonuses.

Today, I want to talk about who "they" are and share a few tricks you can use to capitalize on their actions without being taken to the poorhouse.

Let's begin with the concept of manipulation itself.

In order to understand the players, you have to understand their motivations. You'd think it's all about profit, but that's not entirely true.

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