Many of the planet's gold miners are eking out in survival mode, breaking even or losing money on every ounce they produce. They're leaving tens of millions of ounces of hard-to-reach gold underground, too.
- The Biggest Thing to Happen to Gold Mining Since the Shovel
- Illegal Gold Mining Is Costing Countries Millions
- Gold Market Shift: Third-Biggest Gold-Producing Country Shocks with New Data
- Keith Fitz-Gerald: "I am Buying Gold and I Intend to Buy More if It Goes Down"
- Why Gold Really Crashed and What You Can Do About It
- A Test of Strength for Gold
- Invest in Gold Mining Stocks While They're Still a Bargain
- While Banks Crumble, The Next Leg Up For Gold Prices Draws Near
- Money Morning Mailbag: Don't Bank on a Return to the Gold Standard
- Think Gold Prices Have Peaked? Think Again
- The Case for $5,000 Gold: And How to Profit
- Three Ways to Profit From the World's Luckiest Country – Australia.
- Get in on the Ground Floor of This Growing Global Profit Machine
- It's Time to Invest in Canada
- 7 Reasons Gold Will Surpass $2,500 – And Inflation Isn't One of Them
With gold prices up some 360% over the last decade, the lure of easy profits has created a whole new industry - illegal gold mining.
But the practice is hurting legitimate gold miners and costing countries millions in taxes and export revenue.
The landscape of the gold market has been changing dramatically in the last decade in terms of the dominant gold-producing nations. For example, for nearly a century, South Africa held the top spot for gold production. But in 2008, China took over, and since then, South Africa has sunk down to the fifth spot.
What's going on in the markets?
Stuart Varney of Fox Business' "Varney & Co." put that question to Money Morning Chief Investment Strategist Keith Fitz-Gerald Thursday.
Of Apple, Keith said, "I wouldn't touch it," then ticked off a number of reasons.
But Keith had a decidedly different take on gold, saying, "I am buying gold and I intend to buy more if it goes down, and I hope I'm smart enough to do it for a long time to come."
Asked what else he's investing in, Keith said he's "cautiously buying" energy, defense technology and medical technology stocks.
To hear more from Keith on these topics as well as his view of the massive money-printing in Japan, watch the video below.
The news is great at telling us what's happening. But understanding what's happening is what makes the difference between an average and a truly great investor.
Gold's crash on Monday is a perfect example.
The media fell all over itself talking about how gold was falling and how far it was off its highs. Yet few tied the devastating slide to real economic events let alone made the connection to actual trading.
But that's my bread and butter. And today I'm going to tell you what really happened and why.
Better yet, I'm going to tell you exactly how to play it...
It's still among the wisest investments you can make right now. As Frank Holmes explains, the gold price could rise more than 16% in the short term. You have to see this chart...
Gold prices eked out a small gain Friday to close at $1,616.30 an ounce.
Comments from German Chancellor Angela Merkel Thursday supporting European Central Bank President Mario Draghi's crisis strategy to do "whatever it takes" to save the euro helped push gold prices higher.
More disappointing U.S. economic news in manufacturing and housing starts could also boost the yellow metal. The more the U.S. economy struggles, the more likely the U.S. Federal Reserve will launch another stimulus program that would favor higher gold prices.
For some investors, this adds to their dilemma of whether to invest in physical gold or gold equities.
History is on the side of physical gold. Citigroup Inc. (NYSE: C) has found that in the last five years, physical gold has outperformed global gold stocks by 120%.
But because gold stocks - and gold mining stocks in particular - have lagged gold prices, they have a lot of upside potential.
What's more, gold mining stocks offer something in return - dividends - in addition to benefiting from a continued rise in gold prices. Many commodities experts think gold prices could reach $2,000 an ounce or more within the next six months.
While not quite in bull mode, gold mining stocks have begun to stir of late. Here are three gold mining stocks worth a look for gold equity investors.
The Basel Committee for Bank Supervision (BCBS) is about to decide something crucial to bankers, sovereign nations, and gold investors alike.
As part of the Bank of International Settlements (BIS), the BCBS is reviewing the upcoming new Basel III rules. That may sound arcane to you but I promise it's not.
Though rarely discussed in the mainstream press, the all-important Bank of International Settlements is essentially a global central bank to the world's central banks.
Its goal is ostensibly to provide global stability to the monetary and financial systems.
And in a surprise twist that only a few years ago would have been considered preposterous, the BCBS is entertaining whether gold should qualify as a full-fledged Tier 1 capital asset.
Currently, the precious metal is relinquished to a Tier 3 status, deserving no more than a 50% weighting at that.
Here's why that distinction is important and potentially astonishing.
Achieving Tier 1 status would credit gold with the recognition it's been denied ever since Nixon closed the gold window on August 15, 1971.
In essence, it would mark the official recognition that gold is real money.
But that's not the only reason gold is gaining respect. Other factors are brewing that will set the stage for the next leg up in gold prices.
As Banks Teeter, Gold Gains RespectOne of them is the crumbling state of world's banks. Once unwavering, the trust in these financial ivory towers is precarious at best.
In the last couple of months alone, Greek depositors have withdrawn billions of euros in deposits, as the fear of a "Grexit" looms large.
Not to be outdone, Spain banks have been emasculated by the Iberian nation's own bursting real estate bubble. After denying for weeks that a bailout would be required, officials finally caved to a "Spailout", giving Spain's banking system a 100 billion euro rescue package.
This phenomenon is not exclusive to the Eurozone either.
The surge shows just how much confidence investors have lost in fiat money, and greater appreciation for what former U.S. Federal Reserve Chairman Alan Greenspan last month called the "ultimate means of payment."
Gold's price surge "is a signal that there is a problem with respect to currency markets globally," Greenspan told the Council on Foreign Relations.
Indeed, Money Morning has repeatedly warned readers about the pitfalls of paper currency. However, it's unlikely that readers hoping for a return to the gold standard will get their wish.
In fact, Credit Suisse Group AG (NYSE ADR: CS) has increased its long-range forecast for gold, arguing in a new report that prices should remain near current levels for at least the next four years.
CS analysts' 2014 target is now $1,300 and ounce, compared to their previous forecast of $1,120. That may not seem like a very brave forecast since gold is already trading at nearly $1,200 an ounce. But it has profound implications for gold miners, because mining stocks are priced based on expectations of future earnings. Removing the expectation that gold futures prices could slide way back removes an impediment to shares going higher.
The rationale for the change: Credit Suisse believes there is an 80% chance of a renewed quantitative easing - or money printing - due either to a full-blown sovereign debt crisis or a new recession. This enthusiastic and inflationary activity would rev up the safe haven buying that has pushed up gold prices over the past few years. The feeling is that companies and government officials may cheat and lie, but gold is as steady as a rock as an irrefutable, trusted source of value.
Well, in the global world of 2010, skill and technology are " two-a-penny" ubiquitous in an emerging-markets world in which billions of industrious people are competing against one another. In this new reality in today's world, natural resources are the key to global wealth.
And Australia is a prime beneficiary of that new reality.
I've never been there. I've never met anyone from there. And it's not a country we hear much about. But it's the world's third-largest democracy (the current president got more votes than U.S. President Barack Obama). And it's one of the few Muslim countries - along with Turkey - that doesn't hate the United States as a matter of public policy.
And those are just a few of the reasons that it's time to invest in Indonesia.
At this point, you might well be asking: Well, if you've said this all before, why does it bear repeating now?
The answer is simple: As I've hunted for attractive investments recently, I have noticed that a very high percentage of those companies are domiciled north of the border.
In short, it's time to invest in Canada.