A drop in gold prices earlier this week made some investors nervous, but the long-term factors pushing the yellow metal higher haven't changed.
Following a 5% increase and a rise in exchange-traded funds holdings in the third quarter, gold prices fell back to earth Monday, falling 1%.
It was gold's greatest one-day fall since July.
Most of the news that hurt gold prices was fleeting.
Positive U.S. retail sales data raised concerns the Fed would abbreviate its purchases of mortgage-backed securities. Investors were also worried early in the week about the possibility of weak Chinese economic data, although that didn't materialize - China posted growth of 7.4% on Thursday, as expected.
Finally, as Mitt Romney rises in the polls there's concern that as president he would implement bigger cuts to U.S. government spending, which would be bad for gold prices.
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What South Africa's Mining Turmoil Means for Investing in Gold
Gold prices recently have risen due to global central bank stimulus measures, but the true movement in the market stems from much more than QE3.
Precious metals investors no doubt have seen the recent headlines coming out of South Africa. Violent strikes (resulting in dozens of deaths) and work stoppages have plagued the platinum industry there in the past few months.
The causes of the labor unrest include poor wages and unsafe working conditions. There has also been a tussle for power between two warring labor unions - the Nation Union of Mineworkers and the far more militant Association of Mineworkers and Construction Union.
The result of all this turmoil is quite obvious for the global platinum market. The majority of the world's platinum, roughly 80%, comes from South Africa. Not to mention that 90% of that production comes from a limited area, the Western Bushveld region of the country.
But here's where it gets interesting, especially for those investing in gold.
Precious metals investors no doubt have seen the recent headlines coming out of South Africa. Violent strikes (resulting in dozens of deaths) and work stoppages have plagued the platinum industry there in the past few months.
The causes of the labor unrest include poor wages and unsafe working conditions. There has also been a tussle for power between two warring labor unions - the Nation Union of Mineworkers and the far more militant Association of Mineworkers and Construction Union.
The result of all this turmoil is quite obvious for the global platinum market. The majority of the world's platinum, roughly 80%, comes from South Africa. Not to mention that 90% of that production comes from a limited area, the Western Bushveld region of the country.
But here's where it gets interesting, especially for those investing in gold.
How Helicopter Ben Helps Jobs and, Inadvertently, Gold Prices
The world's central bank leaders continue to spike the monetary punch bowl, with investors imbibing on gold once again.
This flurry of gold buying prompts many curious investors and doubting media to ask me two questions: 1) How can demand for gold and gold stocks continue; and 2) How high can gold prices go?
To answer these questions, we need to look at the intentions behind the economic and political decision-making across several developed countries, analyze the causes, the effects, and the possible ramifications.
For example, one of the most debated topics today is America's ongoing unemployment situation.
Job loss has affected the lives and pocketbooks of millions of Americans and our friends and families, culminating to a center-stage position in the election this year. All eyes turn to President Barack Obama and Mitt Romney to explain how each intends to create jobs.
During the two years following the Great Recession, Americans lost jobs at a similar rate to the employment losses during the Great Depression and in Finland after 1991. But two years after the crisis, U.S. employment losses stopped and reversed direction.
Compare this to the situations in Norway, Spain, Finland and Sweden, each of which had prolonged unemployment.
After Norway's financial crisis in 1987, it took 8.5 years to return to the country's employment peak. It took 13 years for Spain's employment to return to its 1997 peak. For Finland and Sweden, it took more than 17 years following their 1991 peaks.
Although the job losses in the U.S. don't seem as dismal, "Helicopter" Ben Bernanke wants to avoid Europe's and Japan's catastrophic situations.
This flurry of gold buying prompts many curious investors and doubting media to ask me two questions: 1) How can demand for gold and gold stocks continue; and 2) How high can gold prices go?
To answer these questions, we need to look at the intentions behind the economic and political decision-making across several developed countries, analyze the causes, the effects, and the possible ramifications.
For example, one of the most debated topics today is America's ongoing unemployment situation.
Job loss has affected the lives and pocketbooks of millions of Americans and our friends and families, culminating to a center-stage position in the election this year. All eyes turn to President Barack Obama and Mitt Romney to explain how each intends to create jobs.
During the two years following the Great Recession, Americans lost jobs at a similar rate to the employment losses during the Great Depression and in Finland after 1991. But two years after the crisis, U.S. employment losses stopped and reversed direction.
Compare this to the situations in Norway, Spain, Finland and Sweden, each of which had prolonged unemployment.
After Norway's financial crisis in 1987, it took 8.5 years to return to the country's employment peak. It took 13 years for Spain's employment to return to its 1997 peak. For Finland and Sweden, it took more than 17 years following their 1991 peaks.
Although the job losses in the U.S. don't seem as dismal, "Helicopter" Ben Bernanke wants to avoid Europe's and Japan's catastrophic situations.
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If You're Investing in Gold, Singapore Just Became More Important to You
Singapore recently made a huge step forward in establishing itself as one of the biggest players in the global market for investing in gold.
The Asian city's government repealed a 7% tax on gold and silver effective Oct.1. Now investors can store their gold in Singapore without costly value-added taxes.
Singapore hopes the move will help the region morph into a precious metals trading market like London and Zurich.
"It seems a little unfair to put a sales tax on what is essentially money. The removal of the GST on gold will allow Singapore to better compete with Hong Kong and other bullion trading centers in the region," Nick Trevethan, a senior commodity strategist at ANZ in Singapore told Reuters.
Singapore currently controls roughly 2% of global gold demand and aims to grow that share to some 10% to 15% over the next five to 10 years.
The market expansion is expected to increase global demand for gold and silver bars and coins in the fourth quarter of 2012. An influx of precious metal traders to Singapore is also expected, with more commodity offices and bullion storage facilities to follow.
Anticipating the opportunity, JPMorgan Chase & Co. (NYSE: JPM) opened a precious metals vault in the city in 2010.
"I think this is really going to change the landscape in Singapore," a gold dealer told Asia One Business. "A lot of companies will find the incentive to start operations in Singapore. This news is going to draw attention to Singapore as a safer place to park funds."
The Asian city's government repealed a 7% tax on gold and silver effective Oct.1. Now investors can store their gold in Singapore without costly value-added taxes.
Singapore hopes the move will help the region morph into a precious metals trading market like London and Zurich.
"It seems a little unfair to put a sales tax on what is essentially money. The removal of the GST on gold will allow Singapore to better compete with Hong Kong and other bullion trading centers in the region," Nick Trevethan, a senior commodity strategist at ANZ in Singapore told Reuters.
Singapore currently controls roughly 2% of global gold demand and aims to grow that share to some 10% to 15% over the next five to 10 years.
The market expansion is expected to increase global demand for gold and silver bars and coins in the fourth quarter of 2012. An influx of precious metal traders to Singapore is also expected, with more commodity offices and bullion storage facilities to follow.
Anticipating the opportunity, JPMorgan Chase & Co. (NYSE: JPM) opened a precious metals vault in the city in 2010.
"I think this is really going to change the landscape in Singapore," a gold dealer told Asia One Business. "A lot of companies will find the incentive to start operations in Singapore. This news is going to draw attention to Singapore as a safer place to park funds."
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Bill Gross, the Ring of Fire, and Gold Prices
Thank Bill Gross for adding some muscle this week to the already strong rally for gold prices.
That's because Gross, the Pacific Investment Management Co. (PIMCO) founder and co-chief investment officer, released his October 2012 investment outlook Tuesday that came with a warning for the U.S. and investors.
Gross said that U.S. fiscal problems have put the country in a "Ring of Fire" that'll burn investors if they aren't protected by gold and real assets.
Gross warned that recent studies have concluded that "[T]he U.S. balance sheet, its deficit and its "fiscal gap' is in flames and that its fire department is apparently asleep at the station house."
That's because Gross, the Pacific Investment Management Co. (PIMCO) founder and co-chief investment officer, released his October 2012 investment outlook Tuesday that came with a warning for the U.S. and investors.
Gross said that U.S. fiscal problems have put the country in a "Ring of Fire" that'll burn investors if they aren't protected by gold and real assets.
Gross warned that recent studies have concluded that "[T]he U.S. balance sheet, its deficit and its "fiscal gap' is in flames and that its fire department is apparently asleep at the station house."
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Gold Prices Will Soar Past $2,500 As Central Banks Buy it Up
With governments all over the planet buying up gold over the past five years, it's no wonder gold prices have risen 142% since 2008.
Central banks bought 254.2 tons in the first half of 2012 and may add close to 500 tons for all of 2012, the World Gold Council said last month.
According to the International Monetary Fund (IMF), Russia added 18.6 metric tons of gold in July. South Korea bought 16 tons -- a 30% increase. Kazakhstan increased their bullion reserves for a 12th consecutive month.
Turkey, Ukraine and the Kyrgyz Republic also joined the party.
And the buying continued in August, albeit at a more moderate pace, the IMF confirmed.
"Gold prices continue to be underpinned by growing demand from central banks...we believe this trend is likely to ramp up once liquidity increases in global markets," Justin Harper, markets strategist at IG Markets, told MarketWatch.
That means the cheap money policies by many of these same central banks, such as the Federal Reserve's recently announced QE3 program, will also help fuel the rise in gold prices.
Combine that with skyrocketing demand from the private sector, and government hoarding could easily push the price of bullion as high as $2,500 in 2013.
In fact, the rally could be similar to gold's big breakout move in 2007, when gold prices surged 60%, according to Citi FX Pro analyst Tom Fitzpatrick.
Central banks bought 254.2 tons in the first half of 2012 and may add close to 500 tons for all of 2012, the World Gold Council said last month.
According to the International Monetary Fund (IMF), Russia added 18.6 metric tons of gold in July. South Korea bought 16 tons -- a 30% increase. Kazakhstan increased their bullion reserves for a 12th consecutive month.
Turkey, Ukraine and the Kyrgyz Republic also joined the party.
And the buying continued in August, albeit at a more moderate pace, the IMF confirmed.
"Gold prices continue to be underpinned by growing demand from central banks...we believe this trend is likely to ramp up once liquidity increases in global markets," Justin Harper, markets strategist at IG Markets, told MarketWatch.
That means the cheap money policies by many of these same central banks, such as the Federal Reserve's recently announced QE3 program, will also help fuel the rise in gold prices.
Combine that with skyrocketing demand from the private sector, and government hoarding could easily push the price of bullion as high as $2,500 in 2013.
In fact, the rally could be similar to gold's big breakout move in 2007, when gold prices surged 60%, according to Citi FX Pro analyst Tom Fitzpatrick.
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Gold Prices: Here's Why All the Hype Goes Beyond QE3
It was another bumpy week for gold prices that included two-week lows and a surge to seven-month highs.
On Thursday, December gold futures increased $26.90 (1.5%) and settled at $1,780.50 an ounce on the COMEX.
This represented gold's highest close since the end of the February.
As the week comes to an end and traders waited for more news from Spain, December gold was down on Friday morning to $4.10 to $1,776.40 an ounce.
Gold's price moves came from a number of factors this week including bargain hunters and weak U.S. macroeconomic data.
The bottom line is that the QE3 rally might have fizzled, but the long-term gold outlook still shines brightly.
Here's why.
On Thursday, December gold futures increased $26.90 (1.5%) and settled at $1,780.50 an ounce on the COMEX.
This represented gold's highest close since the end of the February.
As the week comes to an end and traders waited for more news from Spain, December gold was down on Friday morning to $4.10 to $1,776.40 an ounce.
Gold's price moves came from a number of factors this week including bargain hunters and weak U.S. macroeconomic data.
The bottom line is that the QE3 rally might have fizzled, but the long-term gold outlook still shines brightly.
Here's why.
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Investing in Gold: Why the "Golden Cross" is a Big Deal
Investing in gold and silver already offered staggering profit potential, and the opportunities just got even brighter.
Gold this week reached a "golden cross" and silver is perched to traverse one in a matter a days, following successive weeks of bullish trends in both precious metals' markets.
A golden cross occurs when the current price of a commodity (or an equity) and the shorter term moving averages "cross" or rise above the longer term 200-day moving average.
After 18 months of tepid and sometimes lower price movement, gold and silver have formed a large foundational base while enjoying two of the longest and strongest bull markets in history, according to research from Business Insider.
Now the golden cross has delivered technical support for higher moves for both metals.
"We're going to see new highs in both gold and silver in the first half of the New Year," said Money Morning Global Resources Specialist Peter Krauth. "I don't see anything that will keep this from happening."
Gold this week reached a "golden cross" and silver is perched to traverse one in a matter a days, following successive weeks of bullish trends in both precious metals' markets.
A golden cross occurs when the current price of a commodity (or an equity) and the shorter term moving averages "cross" or rise above the longer term 200-day moving average.
After 18 months of tepid and sometimes lower price movement, gold and silver have formed a large foundational base while enjoying two of the longest and strongest bull markets in history, according to research from Business Insider.
Now the golden cross has delivered technical support for higher moves for both metals.
"We're going to see new highs in both gold and silver in the first half of the New Year," said Money Morning Global Resources Specialist Peter Krauth. "I don't see anything that will keep this from happening."
Here's why Krauth is so bullish on gold and silver.
All Signs Now Point to Gold
With another syringe of quantitative easing being injected into the U.S. economy's bloodstream, Ben Bernanke is giving the markets their liquidity fix.
The Federal Reserve's action reaffirmed the stance I've reiterated on several occasions that the governments across developed markets have no fiscal discipline, opting for ultra-easy monetary policies to stimulate growth instead.
The government's liquidity shot promptly boosted gold prices and gold stocks, as investors sought the protection of the precious metal as a real store of value.
In fact, since the beginning of 1984, as money supply has risen, so has the price of gold.
The dollar declined due to the Fed's easing, which isn't surprising, given the fact that gold and the greenback are often inversely correlated, and increasing money supply generally causes the currency to fall in value.
What's interesting is that currency decline was what Richard Nixon sought to avoid when he ended the gold standard in 1971 and announced that the country would no longer redeem its currency in gold.
During his televised speech to the American public, Nixon translated in simple terms the "bugaboo" of devaluation, saying, "if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today."
As you can see below, more than 40 years later, a dollar is worth only 17 cents.
The Federal Reserve's action reaffirmed the stance I've reiterated on several occasions that the governments across developed markets have no fiscal discipline, opting for ultra-easy monetary policies to stimulate growth instead.
The government's liquidity shot promptly boosted gold prices and gold stocks, as investors sought the protection of the precious metal as a real store of value.
In fact, since the beginning of 1984, as money supply has risen, so has the price of gold.
The dollar declined due to the Fed's easing, which isn't surprising, given the fact that gold and the greenback are often inversely correlated, and increasing money supply generally causes the currency to fall in value.
What's interesting is that currency decline was what Richard Nixon sought to avoid when he ended the gold standard in 1971 and announced that the country would no longer redeem its currency in gold.
During his televised speech to the American public, Nixon translated in simple terms the "bugaboo" of devaluation, saying, "if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today."
As you can see below, more than 40 years later, a dollar is worth only 17 cents.
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Investing in Gold After QE3
It's been just four trading days since QE3 ended and gold prices are already up about $40 an ounce.
Prior to the announcement, gold was trading at six-month highs, but dipped slightly before Thursday's anticipated news. Upon hearing the Fed's decision, gold prices shot up 2% that day.
Here we are on Tuesday and gold prices have slightly dipped with Comex December futures declining $4.50 to $1,766.10 an ounce. Many investors have hit the sidelines to watch whether or not the Eurozone will dodge increasing doubts about its bailout agreements.
But we're still a long way from the long-term price target for gold. Can this QE-fueled rise match ones for QE1 and QE2? History does have a way of repeating itself...
Prior to the announcement, gold was trading at six-month highs, but dipped slightly before Thursday's anticipated news. Upon hearing the Fed's decision, gold prices shot up 2% that day.
Here we are on Tuesday and gold prices have slightly dipped with Comex December futures declining $4.50 to $1,766.10 an ounce. Many investors have hit the sidelines to watch whether or not the Eurozone will dodge increasing doubts about its bailout agreements.
But we're still a long way from the long-term price target for gold. Can this QE-fueled rise match ones for QE1 and QE2? History does have a way of repeating itself...
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Investing in Gold ETFs: Don't Miss this Bull Market
The gold bull market is alive and well, meaning now's the time for investing in gold exchange-traded funds (ETFs).
Gold kicked off the week with December futures rising $6.80 (0.4%) to $1,738.60 an ounce Monday. This came on the heels of Friday's disappointing U.S. jobs report and the anticipation of a newsworthy week for the precious metal thanks to some possible central bank action.
Gold futures again edged higher today (Tuesday) with December futures at $1,736 an ounce. The gold price rise continues thanks to an increasing euro and the anticipation of a German court ruling Wednesday on the Eurozone bailout fund's legality.
Adding to the bullish sentiment on gold is the anticipation of this week's two-day Federal Open Market Committee (FOMC) meeting: Will they or won't they announce another round of additional easing on Thursday?
While these events help price outlook for gold, they're also drawing investors to gold ETFs.
On Monday, gold ETFs rose to a record high of 72.49 million ounces, reported Reuters.
In 2012, total holdings have increased by almost 3.5 million ounces; in the last month 2.7 million ounces flowed into gold ETFs.
The interest in investing in gold ETFs is another bullish signal for the yellow metal, erasing some worries over the sustainability of gold's price rise.
"With a good portion of gold's recent strength accounted for by the sharp increase in spec positioning, this certainly raises concerns on the longevity of the [gold price] move, especially with fundamental buying virtually out of the picture," Edel Tully, a strategist at UBS, said to Reuters. "But the fact that the (ETF) camp - a relatively less-fickle group of buyers - has also been giving gold its vote of confidence offsets some of those worries."
Gold kicked off the week with December futures rising $6.80 (0.4%) to $1,738.60 an ounce Monday. This came on the heels of Friday's disappointing U.S. jobs report and the anticipation of a newsworthy week for the precious metal thanks to some possible central bank action.
Gold futures again edged higher today (Tuesday) with December futures at $1,736 an ounce. The gold price rise continues thanks to an increasing euro and the anticipation of a German court ruling Wednesday on the Eurozone bailout fund's legality.
Adding to the bullish sentiment on gold is the anticipation of this week's two-day Federal Open Market Committee (FOMC) meeting: Will they or won't they announce another round of additional easing on Thursday?
While these events help price outlook for gold, they're also drawing investors to gold ETFs.
On Monday, gold ETFs rose to a record high of 72.49 million ounces, reported Reuters.
In 2012, total holdings have increased by almost 3.5 million ounces; in the last month 2.7 million ounces flowed into gold ETFs.
The interest in investing in gold ETFs is another bullish signal for the yellow metal, erasing some worries over the sustainability of gold's price rise.
"With a good portion of gold's recent strength accounted for by the sharp increase in spec positioning, this certainly raises concerns on the longevity of the [gold price] move, especially with fundamental buying virtually out of the picture," Edel Tully, a strategist at UBS, said to Reuters. "But the fact that the (ETF) camp - a relatively less-fickle group of buyers - has also been giving gold its vote of confidence offsets some of those worries."
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Gold Bugs Love It, But a New Gold Standard is Just a Dream –For Now
Thanks largely to Ron Paul, the Republicans have suddenly become enamored of gold.
And why not?...It is real money.
These newly-born gold bugs have even gone so far as to include a call for a commission to examine a return to the gold standard in the party platform.
Needless to say, we've come a long way since President Richard Nixon "closed the gold window" in 1971. Forty-one years, and a few financial disasters later, the debate has begun anew.
But it begs the question: How would the gold standard work?
What's more, what would the economic implications be, and is it likely to happen or is it all just a gold bug's dream?
In ancient and medieval times the answers were quite a bit more simple. Since there was no real banking system, there was also no argument.
Kings coined money with gold, silver, or copper, and the people accepted the money at a price based on its metal content. The idea of taking paper instead would have been thought of as sheer madness.
Only in China, an isolated and stable society, was paper money used during the Song Dynasty of the 10th through 13th centuries, but even there the Mongol invasion and fall of the Song regime caused the paper money system to collapse.
Paper money backed by gold only became possible once modern banking got going in Europe in the 16th and 17th centuries.
In fact, the British Gold Standard was devised in 1717 by no less than Isaac Newton, then Master of the Mint. Other countries soon joined Britain in linking their currencies to gold, including the United States from 1878 until its abandonment in 1933.
Of course, countries claimed to be on a gold standard under the Bretton Woods Agreement from 1944-71, but gold was only exchangeable between governments. Indeed, holding gold was prohibited in the U.S. for private individuals.
But inevitably, the Bretton Woods monetary system itself became manipulated and collapsed in inflation.
That brings us to today....
And why not?...It is real money.
These newly-born gold bugs have even gone so far as to include a call for a commission to examine a return to the gold standard in the party platform.
Needless to say, we've come a long way since President Richard Nixon "closed the gold window" in 1971. Forty-one years, and a few financial disasters later, the debate has begun anew.
But it begs the question: How would the gold standard work?
What's more, what would the economic implications be, and is it likely to happen or is it all just a gold bug's dream?
In ancient and medieval times the answers were quite a bit more simple. Since there was no real banking system, there was also no argument.
Kings coined money with gold, silver, or copper, and the people accepted the money at a price based on its metal content. The idea of taking paper instead would have been thought of as sheer madness.
Only in China, an isolated and stable society, was paper money used during the Song Dynasty of the 10th through 13th centuries, but even there the Mongol invasion and fall of the Song regime caused the paper money system to collapse.
Paper money backed by gold only became possible once modern banking got going in Europe in the 16th and 17th centuries.
In fact, the British Gold Standard was devised in 1717 by no less than Isaac Newton, then Master of the Mint. Other countries soon joined Britain in linking their currencies to gold, including the United States from 1878 until its abandonment in 1933.
Of course, countries claimed to be on a gold standard under the Bretton Woods Agreement from 1944-71, but gold was only exchangeable between governments. Indeed, holding gold was prohibited in the U.S. for private individuals.
But inevitably, the Bretton Woods monetary system itself became manipulated and collapsed in inflation.
That brings us to today....
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Gold Prices Rise as All Signs Point to More Stimulus
Gold prices were on the rise again today (Wednesday) as the market digests the recent spate of global economic data that could warrant more stimulus measures - and send metals prices soaring.
China reported last Friday that its July consumer price index (CPI) rose to 1.8% from the previous year, representing its lowest jump since January 2010. Industrial production declined to 9.2% from June's 9.5% thanks to slowing growth in heavy industrial production. Retail sales fell to 13.1% from June's 13.7%.
There's more: July exports increased 1% from the previous year, while imports rose 4.7%, exemplifying a weak external demand, but also a slowdown in Chinese investment.
As if this wasn't enough news to fuel a little action in the gold markets, Japan continued the trend on Monday with news that its economic growth in the second quarter had slowed down more than anticipated.
Also triggering stimulus speculation was news out of Europe that the Eurozone's economies contracted in the second quarter. The European Union's statistics office said yesterday (Tuesday) that six countries were in recessions.
"It looks like the gold market will continue to be held up by the sentiment of expected central-bank stimulation," Marex Spectron Group said in a report Tuesday. "The downside risk is limited."
China reported last Friday that its July consumer price index (CPI) rose to 1.8% from the previous year, representing its lowest jump since January 2010. Industrial production declined to 9.2% from June's 9.5% thanks to slowing growth in heavy industrial production. Retail sales fell to 13.1% from June's 13.7%.
There's more: July exports increased 1% from the previous year, while imports rose 4.7%, exemplifying a weak external demand, but also a slowdown in Chinese investment.
As if this wasn't enough news to fuel a little action in the gold markets, Japan continued the trend on Monday with news that its economic growth in the second quarter had slowed down more than anticipated.
Also triggering stimulus speculation was news out of Europe that the Eurozone's economies contracted in the second quarter. The European Union's statistics office said yesterday (Tuesday) that six countries were in recessions.
"It looks like the gold market will continue to be held up by the sentiment of expected central-bank stimulation," Marex Spectron Group said in a report Tuesday. "The downside risk is limited."
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Keep a Close Eye on Gold Prices Next Week
The U.S. Federal Reserve is about to give a huge boost to gold prices, and the first push could come as soon as next week.
The parade of dismal economic reports both here and abroad has stoked hopes that more stimulus, in the form of a third round of quantitative easing, is imminent. A clear signal of when we can expect QE3 could come at next week's two-day Federal Open Market Committee (FOMC) meeting that starts July 31.
An increasing number of Federal Reserve officials are convinced the central bank must expand its stimulus operation immediately amid the recent spate of glum data signaling economic growth has hit a roadblock. Several members will push for urgent action, although some may move to delay a decision until September.
Fed Chairman Ben Bernanke told Congress last week that a fresh round of quantitative easing is an option the FOMC is mulling to try and lower the elevated unemployment level.
"We are committed to ensuring, or at least doing all we can to ensure, that we continue to make progress on unemployment," Bernanke said just last week.
The parade of dismal economic reports both here and abroad has stoked hopes that more stimulus, in the form of a third round of quantitative easing, is imminent. A clear signal of when we can expect QE3 could come at next week's two-day Federal Open Market Committee (FOMC) meeting that starts July 31.
An increasing number of Federal Reserve officials are convinced the central bank must expand its stimulus operation immediately amid the recent spate of glum data signaling economic growth has hit a roadblock. Several members will push for urgent action, although some may move to delay a decision until September.
Fed Chairman Ben Bernanke told Congress last week that a fresh round of quantitative easing is an option the FOMC is mulling to try and lower the elevated unemployment level.
"We are committed to ensuring, or at least doing all we can to ensure, that we continue to make progress on unemployment," Bernanke said just last week.
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How to Buy Gold in Today's Troubled World
Gold turned in a fairly tarnished performance during the second quarter, falling $80 an ounce, or 4.76%, during the April-June period.
Even still, most precious metals analysts see strong potential for gold prices in the second half of 2012 given the continued sluggishness in the global economy and increasing uncertainty about the Eurozone debt crisis.
Some are suggesting that gold prices could top their previous 2012 high of $1,795.10 an ounce set back in February.
Given that, the big question for investors is how to buy gold in a renewed bull market for the shiny metal.
The answer largely depends on your expectations.
If you expect renewed economic disruptions in Europe and elsewhere, growing tensions in Syria, Iraq, Egypt and the rest of the Middle East, and increasing political discord in the U.S. before and after the election, you'll likely want to take the traditional approach - holding the physical metal itself.
Purists feel this is the only true hedge against global turmoil and declining values in the dollar and other fiat currencies.
Bullion bars - produced primarily by private mints like Engelhard, Johnson Matthey PLC (LON: JMAT) and Credit Suisse Group AC (NYSE ADR: CS) - come in an assortment of sizes to suit the needs and means of every investor.
The smallest bars weigh just one gram, priced this week at about $52.75, while the largest is 400 ounces and was going this week for around $645,000.
Gold rounds are produced by the same private refiners, as well as some government mints, and are also available in a variety of sizes, typically ranging from one-tenth of an ounce to five ounces. Prices range from as little as $15 per round over the spot price of gold at the time of the order for smaller pieces to $40 over the spot for larger specialty pieces.
Even still, most precious metals analysts see strong potential for gold prices in the second half of 2012 given the continued sluggishness in the global economy and increasing uncertainty about the Eurozone debt crisis.
Some are suggesting that gold prices could top their previous 2012 high of $1,795.10 an ounce set back in February.
Given that, the big question for investors is how to buy gold in a renewed bull market for the shiny metal.
The answer largely depends on your expectations.
If you expect renewed economic disruptions in Europe and elsewhere, growing tensions in Syria, Iraq, Egypt and the rest of the Middle East, and increasing political discord in the U.S. before and after the election, you'll likely want to take the traditional approach - holding the physical metal itself.
Purists feel this is the only true hedge against global turmoil and declining values in the dollar and other fiat currencies.
How to Buy Physical Gold
For smaller investors, this typically means buying gold bullion bars, rounds (unadorned coin-shaped pieces) or minted gold bullion coins.Bullion bars - produced primarily by private mints like Engelhard, Johnson Matthey PLC (LON: JMAT) and Credit Suisse Group AC (NYSE ADR: CS) - come in an assortment of sizes to suit the needs and means of every investor.
The smallest bars weigh just one gram, priced this week at about $52.75, while the largest is 400 ounces and was going this week for around $645,000.
Gold rounds are produced by the same private refiners, as well as some government mints, and are also available in a variety of sizes, typically ranging from one-tenth of an ounce to five ounces. Prices range from as little as $15 per round over the spot price of gold at the time of the order for smaller pieces to $40 over the spot for larger specialty pieces.
To continue reading, please click here...