Confusion over the daily fluctuation of the markets based on little snippets and tidbits of news can drive even the most astute trader or speculator batty, but in the case of gold, investors and pundits like Marc Faber and Jim Rogers aren't confused at all, and they both say they have no intention of selling their gold, and are always on the lookout for dips so they can acquire more.
Without getting into too much detail, the reasons these guys continue to do this is there overall understanding of the macro-economic circumstances.
If you understand the macro-economic situation affecting any investment, and gold in particular, the daily ins and outs of the market are largely irrelevant, unless you're trying to make a quick killing, which hopefully you're not. Even the day traders can't do that great in attempting to time the market, and very few are that successful, even though there is always the glamor attached to being involved in it.
In general, macro-economics as it relates to gold, will deal with issues like national debt, inflation, paper currency and the practices of central banks; all of which the above are highly affected by.
For example, around the world now central banks refuse to implement austerity measures into their practices, as they're committed to bailing out whatever major problems occur in order to save the various economies or industries they deem in need of saving.
That means they'll have to print money and government debt will continue to rise to astronomical levels.
Another indicator is job creation in the private sector, which is just above zero in the United States, with the government being the almost sole creator of jobs, which means they're propping up the economy while creating nothing of value that has a chance to last.
This is why Faber and Jim Rogers continue to hold gold. The central banks and governments have become addicted to these practices even more than in the past, and it's not sustainable by any stretch of the imagination.
Consequently, trust in paper currencies is eroding around the world, and the only reason the U.S. dollar is stronger is because the euro isn't. It's not because it has some type of safe or mystical power which makes it a place of safety. It's only relative in the sense when you compare to the condition of most other currencies in the world, which for the most are even more unstable.
So within these general parameters, gold can be counted on to continue to move upward in price, no matter what type of temporary correction will take place.
Some clueless analysts and pundits try to make it look like gold is in a bubble, but it's not even close, as until the general population gets into the gold market and drives up prices without knowing or understanding the fundamentals, similar to clueless house flippers and those with HELOCs in the housing bubble, where they kept refinancing or bidding up the prices of houses like it was a game with no end, not understanding it had become a ponzi scheme which was about to come falling down around their heads.
It seems the average or everyday investor hasn't even began to invest in gold, so until that happens it won't be those who bid up the price of gold, but the things mentioned above.
There will of course be the traders moving in and out of the market which will drive gold prices up over short periods of time, and then the price gets a correction when they sell their positions to cover other unrelated investments they've lost on.
Only when the price of gold goes up at unrealistic levels for no apparent reason will be be in a bubble, and that won't happen until far into the future, as people in general still stay away from the yellow metal, as they fear that which they don't understand, and only after years of financial reporting on it and they feel safe, will they enter in. At that time the market will be close to a top, and then they'll start to bid gold prices up based on nothing else than everybody has caught gold fever.
So that's when and how a gold bubble will occur, and until then we should feel confident gold prices will continue onward and upward.
This is why Marc Faber and Jim Rogers, among others, continue to hold and invest in gold, and will continue to do so for many years to come.
Showing posts with label Gold Haven. Show all posts
Showing posts with label Gold Haven. Show all posts
Saturday, June 5, 2010
Saturday, May 8, 2010
Gold as Currency and Safe Haven
One of the more positive results of the economic crisis we face is abn increasing number of people are better understanding the overall scheme of economics, currencies, the central banks, and gold.
Gold prices today have risen to just under record levels, and that alone is good news, not just for gains made by investors, but because it reveals people in general are starting to see that historically gold has been the most durable asset that has existed; going back thousands of years.
But just as important is the understanding that the Federal Reserve and other central banks around the world are a major problem in the health of our economic system, and the endless printing of money by central banks had done as much harm to the global economy as anything else, and probably more.
Another great benefit is people are beginning to see that paper currencies aren't worth much, and gold is far more valuable and safe than it will ever be.
All of this is important because our generation, for the most part, haven't experienced this depth of economic chaos in their lifetimes, and it has brought to the surface the underlying causes which few have taken time to search out. Now they are, and it's doubtful it'll ever return to the naive practices of the past without being challenged.
Gold is safe because it holds its value and can be used as currency at any time, in the sense if things get so bad that the financial system breaks down, which it in reality could. This is why a growing number of people are acquiring physical gold to not only protect their wealth, but to have a means of exchange if things go that sour.
If nothing else, hopefully this crisis will change the understanding of our financial system and help people to see what needs to be changed after decades of Keynesianism has let us to where we are today.
Gold prices today have risen to just under record levels, and that alone is good news, not just for gains made by investors, but because it reveals people in general are starting to see that historically gold has been the most durable asset that has existed; going back thousands of years.
But just as important is the understanding that the Federal Reserve and other central banks around the world are a major problem in the health of our economic system, and the endless printing of money by central banks had done as much harm to the global economy as anything else, and probably more.
Another great benefit is people are beginning to see that paper currencies aren't worth much, and gold is far more valuable and safe than it will ever be.
All of this is important because our generation, for the most part, haven't experienced this depth of economic chaos in their lifetimes, and it has brought to the surface the underlying causes which few have taken time to search out. Now they are, and it's doubtful it'll ever return to the naive practices of the past without being challenged.
Gold is safe because it holds its value and can be used as currency at any time, in the sense if things get so bad that the financial system breaks down, which it in reality could. This is why a growing number of people are acquiring physical gold to not only protect their wealth, but to have a means of exchange if things go that sour.
If nothing else, hopefully this crisis will change the understanding of our financial system and help people to see what needs to be changed after decades of Keynesianism has let us to where we are today.
Friday, April 23, 2010
Gold Rocking on Weaker Dollar
Gold has exploded upward today, rising to as high as $1,156.35 an ounce, as the U.S. dollar fell against the euro after Germany again confirmed it stood ready to help Greece in their sovereign debt debacle.
As revelations have come out that Greece is far worse off than originally thought, more concerns have risen on whether bailing them out will even help the country, which could need another cash infusion not too long into the future, and this doesn't even deal with the problems coming from Portugal and Spain, which is highly doubtful the European Union could handle; even if they had the will to.
But what happens when they bail out Greece and the other member countries come with hat in hand wanting their bailout? It will probably be the beginning of the end of the European Union, if it already hasn't started with Greece.
Of course this story has gold going up and down along with the value of the U.S. dollar versus the euro, and that will continue to play out.
If Greece does get bailed out, gold will rise, if not, the dollar will increase in value and gold will have downward pressure on it.
The longer term concern for the value of gold is inflation, and as we've seen from the Labor Department, that has surged in the two most important sectors for consumers: food and fuel, which will make gold more attractive in the months and years ahead.
It's hard to tell how the European debt crisis will play out, as we don't know if the countries are coming clean or not, or if they're even capable of understanding where they stand economically.
For now most things are working in the favor of gold, and we won't know until it unfolds how deep the European Union is with the crisis it faces, and how that will affect the value and credibility of the euro.
Concerning gold, the other factor will be how soon the U.S. decides to increase interest rates as well, which could also put downward pressure on prices, at least for a short period of time.
The bottom line for gold will be inflation and safety, and the more we look at Europe and inflation, the better gold looks.
As revelations have come out that Greece is far worse off than originally thought, more concerns have risen on whether bailing them out will even help the country, which could need another cash infusion not too long into the future, and this doesn't even deal with the problems coming from Portugal and Spain, which is highly doubtful the European Union could handle; even if they had the will to.
But what happens when they bail out Greece and the other member countries come with hat in hand wanting their bailout? It will probably be the beginning of the end of the European Union, if it already hasn't started with Greece.
Of course this story has gold going up and down along with the value of the U.S. dollar versus the euro, and that will continue to play out.
If Greece does get bailed out, gold will rise, if not, the dollar will increase in value and gold will have downward pressure on it.
The longer term concern for the value of gold is inflation, and as we've seen from the Labor Department, that has surged in the two most important sectors for consumers: food and fuel, which will make gold more attractive in the months and years ahead.
It's hard to tell how the European debt crisis will play out, as we don't know if the countries are coming clean or not, or if they're even capable of understanding where they stand economically.
For now most things are working in the favor of gold, and we won't know until it unfolds how deep the European Union is with the crisis it faces, and how that will affect the value and credibility of the euro.
Concerning gold, the other factor will be how soon the U.S. decides to increase interest rates as well, which could also put downward pressure on prices, at least for a short period of time.
The bottom line for gold will be inflation and safety, and the more we look at Europe and inflation, the better gold looks.
Thursday, April 22, 2010
Greek Debt Pushes Gold Prices Down
The continuing debacle in Greece has investors on edge, and that has pushed the price of gold down again, as the euro continues to drop while the U.S. dollar rose today.
At one point gold for June delivery had fallen by $13.50 to $1,135.30, although gold prices have rebounded some from that, and have traded from $1,133.10 to $1,149.80 throughout the day.
News that the budget deficit of Greece is probably worse that thought, and they are probably moving toward being bailed out has caused concern, but the ongoing uncertainty from the European Union and the IMF underscores there is probably extraordinary fighting behind the scenes as other nations like Portugal seem poised to pounce on bailout money if Greece gets rewarded for their terrible financial practices.
For investors, it's the uncertainty that continues to surround the Greece debt crisis, and even when it seems things have been settled, there continues to be mixed signals from the EU and IMF.
Adding to that the threat of Ireland, Italy and Spain, and you have an extraordinary set of economic circumstances which aren't going away, no matter what the outcome of the Greece fiasco is.
The good news for gold investors is gold continues to be strong no matter what the U.S. dollar does, implying the decoupling is real, although that will fluctuate back and forth for some time.
But it seems to say there is support under gold which even the worst of potential circumstances isn't able to break through, and that's good news for those holding gold.
There was also reports from the U.S. Labor Department today that inflation rose by 0.7 percent in March, with food prices surging the most for a month since 1984. Energy prices also rose, signaling inflation is growing, and that's something investors need to consider strongly in their gold strategies.
At one point gold for June delivery had fallen by $13.50 to $1,135.30, although gold prices have rebounded some from that, and have traded from $1,133.10 to $1,149.80 throughout the day.
News that the budget deficit of Greece is probably worse that thought, and they are probably moving toward being bailed out has caused concern, but the ongoing uncertainty from the European Union and the IMF underscores there is probably extraordinary fighting behind the scenes as other nations like Portugal seem poised to pounce on bailout money if Greece gets rewarded for their terrible financial practices.
For investors, it's the uncertainty that continues to surround the Greece debt crisis, and even when it seems things have been settled, there continues to be mixed signals from the EU and IMF.
Adding to that the threat of Ireland, Italy and Spain, and you have an extraordinary set of economic circumstances which aren't going away, no matter what the outcome of the Greece fiasco is.
The good news for gold investors is gold continues to be strong no matter what the U.S. dollar does, implying the decoupling is real, although that will fluctuate back and forth for some time.
But it seems to say there is support under gold which even the worst of potential circumstances isn't able to break through, and that's good news for those holding gold.
There was also reports from the U.S. Labor Department today that inflation rose by 0.7 percent in March, with food prices surging the most for a month since 1984. Energy prices also rose, signaling inflation is growing, and that's something investors need to consider strongly in their gold strategies.
Tuesday, April 13, 2010
Gold Drops on Alcoa (NYSE:AA) Results
Gold and Oil
Gold and other metals headed south today, as the results of Alcoa (NYSE:AA) disappointed; stocks also fell as investors responded to the poor performance of Alcoa, generating concerns the economy isn't anywhere near a sustainable recovery, if it's in a recovery at all.
Long term investors in gold should be too concerned, as this is a temporary blip in the market, as gold fundamentals should remained strong, based on inflation concerns and the sovereign debt crisis in Greece and other parts of the European Union.
Gold has dropped as low as $13.90 today, to $1,149.20, but has regained much of that, rebounding to $1,152.50 as of 1:53 EST.
For commodities, most eyes have been on oil today rather than gold, as losses will accumlate for the fifth straight trading session, as inventory is expected to increase again.
Gold and other metals headed south today, as the results of Alcoa (NYSE:AA) disappointed; stocks also fell as investors responded to the poor performance of Alcoa, generating concerns the economy isn't anywhere near a sustainable recovery, if it's in a recovery at all.
Long term investors in gold should be too concerned, as this is a temporary blip in the market, as gold fundamentals should remained strong, based on inflation concerns and the sovereign debt crisis in Greece and other parts of the European Union.
Gold has dropped as low as $13.90 today, to $1,149.20, but has regained much of that, rebounding to $1,152.50 as of 1:53 EST.
For commodities, most eyes have been on oil today rather than gold, as losses will accumlate for the fifth straight trading session, as inventory is expected to increase again.
Friday, April 9, 2010
Gold Hits Four-month High
Gold surges to four-month high
Gold closed the week hitting a four-month high as deepening concerns about the Greece sovereign debt crisis refuses to go away, and investors flock to safety in concerns over all paper currencies, which less people are trusting daily and the Greece crisis has revealed, as the euro continues to take hits from its weakening position as a viable currency.
Gold futures for June delivery increased to $1,161.90, the strongest finish since December.
The concerns over Greece are that it will default on its debt, which a growing number of investors are believing is going to happen.
As there is no will or discipline among central banks or governments to quit printing their currencies in order to artificially and temporarily prop up their economies, investors are realizing we're reaching a point where the value of paper currencies will be under pressure for years, along with increasing inflation from the misguided policies.
That makes gold and other commodities highly desirable, and should outproduce other investments over the next decade.
Gold closed the week hitting a four-month high as deepening concerns about the Greece sovereign debt crisis refuses to go away, and investors flock to safety in concerns over all paper currencies, which less people are trusting daily and the Greece crisis has revealed, as the euro continues to take hits from its weakening position as a viable currency.
Gold futures for June delivery increased to $1,161.90, the strongest finish since December.
The concerns over Greece are that it will default on its debt, which a growing number of investors are believing is going to happen.
As there is no will or discipline among central banks or governments to quit printing their currencies in order to artificially and temporarily prop up their economies, investors are realizing we're reaching a point where the value of paper currencies will be under pressure for years, along with increasing inflation from the misguided policies.
That makes gold and other commodities highly desirable, and should outproduce other investments over the next decade.
Thursday, April 8, 2010
Greece Borrowing and Gold
Gold: The New Currency
The finance minister of Greece announced today that the country will continue to borrow, even at the high interest rates which have increased of costs of attaining capital. It generates the question of how all of this will affect the price of gold, the yen, and the U.S. dollar.
Investors are again losing any faith that is left in the country, and are very unsure as to weather Greece will be able to pay off its huge debt, which are about to become due very soon.
What the sovereign debt crisis of Greece has revealed in relationship to gold, the yen and the U.S. dollar is that gold is increasingly becoming thought of as a form of currency by a growing number of people, which is the reason you see it moving in tandem with the U.S. dollar and yen on some days people are looking for a safe haven for their money.
That means there is a lack of faith in all paper currencies at this time, and while the dollar and yen will continue to be considered to be a relatively safe place for people to place their money, gold is growing in influence, and for many, is by far the safest place to put their money in economic times like these.
The Greek debt crisis has brought this to the surface for all to see.
Gold: The New Currency
The finance minister of Greece announced today that the country will continue to borrow, even at the high interest rates which have increased of costs of attaining capital. It generates the question of how all of this will affect the price of gold, the yen, and the U.S. dollar.
Investors are again losing any faith that is left in the country, and are very unsure as to weather Greece will be able to pay off its huge debt, which are about to become due very soon.
What the sovereign debt crisis of Greece has revealed in relationship to gold, the yen and the U.S. dollar is that gold is increasingly becoming thought of as a form of currency by a growing number of people, which is the reason you see it moving in tandem with the U.S. dollar and yen on some days people are looking for a safe haven for their money.
That means there is a lack of faith in all paper currencies at this time, and while the dollar and yen will continue to be considered to be a relatively safe place for people to place their money, gold is growing in influence, and for many, is by far the safest place to put their money in economic times like these.
The Greek debt crisis has brought this to the surface for all to see.
Gold: The New Currency
Wednesday, April 7, 2010
Jim Rogers: Keep Your Gold
Jim Rogers on Gold
Jim Rogers reminded investors in gold to hold onto it and not sell, as he maintains gold could go as high as $2,000 over the next 10 years, and those discarding it will miss out on a lot of profits.
Of course it also must be considered as the best place of safety at this time, and there is no paper currency close to it for those who understand the staying power of gold.
For the first time in a long time, gold has fought the U.S. dollar as the haven of choice, and even when the dollar goes up, there have been days where gold has risen with it, defying the usual inverse relationship between the two where gold will go up when the dollar goes down, and the opposite.
When they go up together, that means a sizable number of people and/or institutions consider gold to be safer than the dollar, and that's quite a change from the normal behavior of those looking for safety.
Jim Rogers reminded investors in gold to hold onto it and not sell, as he maintains gold could go as high as $2,000 over the next 10 years, and those discarding it will miss out on a lot of profits.
Of course it also must be considered as the best place of safety at this time, and there is no paper currency close to it for those who understand the staying power of gold.
For the first time in a long time, gold has fought the U.S. dollar as the haven of choice, and even when the dollar goes up, there have been days where gold has risen with it, defying the usual inverse relationship between the two where gold will go up when the dollar goes down, and the opposite.
When they go up together, that means a sizable number of people and/or institutions consider gold to be safer than the dollar, and that's quite a change from the normal behavior of those looking for safety.
Safety Concerns Drive Gold Prices Up
Greek Sovereign Debt and Liquidity Problems Drive Gold Prices Up
After gold rose well past $1,150 an ounce today before settling below the mark, safety was the key factor driving it, and as ongoing concerns about Greece and the euro continue in the forefront, that will be the case for some time to come.
There appears to be a return to a liquidity crisis in Greece, as Commerzbank is pulling it repos with Greek banks, which coupled with the ongoing withdrawal of funds by consumers, makes this a full-blown problem which really has no where to go but the loss of liquidity.
Once news of this gets out on a larger scale and is understood as to what it means, gold, the yen, and probably the U.S. dollar will be the place investors park their money until the result of this crisis finally plays out.
After gold rose well past $1,150 an ounce today before settling below the mark, safety was the key factor driving it, and as ongoing concerns about Greece and the euro continue in the forefront, that will be the case for some time to come.
There appears to be a return to a liquidity crisis in Greece, as Commerzbank is pulling it repos with Greek banks, which coupled with the ongoing withdrawal of funds by consumers, makes this a full-blown problem which really has no where to go but the loss of liquidity.
Once news of this gets out on a larger scale and is understood as to what it means, gold, the yen, and probably the U.S. dollar will be the place investors park their money until the result of this crisis finally plays out.
Friday, April 2, 2010
Gold Considered a Currency Again
Gold the currency
One good thing about the irresponsible and outrageous practices of central banks and governments around the world in debasing their currencies in order to make it look like they're doing something to boost their economies, is the more they do it and fail, like they have been, the more investors and people who wouldn't normally think of it, are starting to focus on gold being a form of currency, which it of course is, but hasn't been thought of that way by most for some time.
Even if it's considered an alternative currency, that fact that alternative is attached to it doesn't diminish its ability to maintain your wealth and spending power.
While there are some ancillary factors besides gargantuan debt involved with the increase in the price of gold, at this time debt is the major factor, and there is nothing that will change that for a long time, as governments at this time don't have the will to stop printing money because of fears of being voted or removed from office.
Having seen the tremendous weakness inherent in the banking systems around the world, people now are understanding they're at risk, and gold is rising as one of the chief currencies of the world as it has been in the past.
Gold Commodities
One good thing about the irresponsible and outrageous practices of central banks and governments around the world in debasing their currencies in order to make it look like they're doing something to boost their economies, is the more they do it and fail, like they have been, the more investors and people who wouldn't normally think of it, are starting to focus on gold being a form of currency, which it of course is, but hasn't been thought of that way by most for some time.
Even if it's considered an alternative currency, that fact that alternative is attached to it doesn't diminish its ability to maintain your wealth and spending power.
While there are some ancillary factors besides gargantuan debt involved with the increase in the price of gold, at this time debt is the major factor, and there is nothing that will change that for a long time, as governments at this time don't have the will to stop printing money because of fears of being voted or removed from office.
Having seen the tremendous weakness inherent in the banking systems around the world, people now are understanding they're at risk, and gold is rising as one of the chief currencies of the world as it has been in the past.
Gold Commodities
Friday, March 19, 2010
Citigroup (NYSE:C) Analyst: Gold New Currency
Gold New Reserve Currency
Now that gold has gravitated away from it traditional inverse relationship with the U.S. dollar, it leaves people asking what's happening, and accoring to a Citigroup (NYSE:C) analyst, what's happening is gold is being increasingly considered second reserve currency, alongside the U.S. dollar.
As the public gets more and more educated about the consequences of central banks printing a seemingly endless amount of paper money, they understand it will weaken the currency of the countries doing that, increase inflation, and no longer be safe to count on as the primary means of trade.
While the last one has a way to work out yet, there is a growing unease with what the central banks, bank cartel and governments around the world are doing with their currencies.
According to economist and hedge-fund manager Dennis Gartman, this isn't going to be a temporary situation or fad. "The trend shall continue months, if not years, into the future," said Gartman, referring to gold being considered a reserve currency.
Many already believe gold to be superior to any paper currency, but what's new is a growing number of people are seeing the reality of that and are acquiring gold as a place of safety as a result.
Gold New Reserve Currency
Now that gold has gravitated away from it traditional inverse relationship with the U.S. dollar, it leaves people asking what's happening, and accoring to a Citigroup (NYSE:C) analyst, what's happening is gold is being increasingly considered second reserve currency, alongside the U.S. dollar.
As the public gets more and more educated about the consequences of central banks printing a seemingly endless amount of paper money, they understand it will weaken the currency of the countries doing that, increase inflation, and no longer be safe to count on as the primary means of trade.
While the last one has a way to work out yet, there is a growing unease with what the central banks, bank cartel and governments around the world are doing with their currencies.
According to economist and hedge-fund manager Dennis Gartman, this isn't going to be a temporary situation or fad. "The trend shall continue months, if not years, into the future," said Gartman, referring to gold being considered a reserve currency.
Many already believe gold to be superior to any paper currency, but what's new is a growing number of people are seeing the reality of that and are acquiring gold as a place of safety as a result.
Gold New Reserve Currency
Wednesday, February 4, 2009
Gold Investors Seeking Haven and Profits
Now that much of the forced liquidation seems to have left the market, gold is starting to perform like the haven of safety usually has in tough economic times, and gold investors and regular investors are flooding to the market to not only be safe, but make some money from gold and its rising prices. Consequently, the U.S. dollar is starting to act like it really is with its poor underlying fundamentals, which had been hidden by the forced liquidation period pushing up its value as funds and companies sought to raise desperately needed capital.
Gold investors should be able to put their money into any well run gold producer this year and do well, along with investing in gold futures, which will continue to run up. Other gold investments set to do well will be gold ETFs, which with the larger companies are saying they're having no problem acquiring the needed gold to line up with investors' demand.
On the other hand, some gold coin sellers have said with some coins they're having trouble meeting specific demand, saying they have waiting lists into the weeks. Either way, gold in general will continue to perform strongly in safety and price, and gold investments won't disappoint this year in any way.
Even though gold was one of the better performers last year, the temporary resurgence of the U.S. dollar kept it from moving upwards when it should have been. That performance is about to rise again for gold, consistent with its usual consistency and price increase.
The huge amount of money pushed in the stimulus packages are starting to concern investors - as it should - and they see the U.S. dollar will start to gradually collapse under the mighty force of the fiat money printing press, which is the only way it will be able to be paid off. But that will lead to inflationary pressures, which will again push traders and investors toward gold.
What remains to be determined is how long it will take, not whether the time arrives. But either way, gold is going to break out again this year, and most analysts are forming a consensus that gold will push past the $1,000 barrier before 2009 is finished. And I think they're right.
Inflation is being held in check from the fact that people have stopped buying things or traveling much, holding down energy prices for now. That will change as the general economic struggles improve some, but then inflation will surge forward, which will benefit gold prices and gold traders and investors as well. Gold futures will continue to rise for some time to come, even if it's a bumpy ride at times.
The current record for gold is at $1,030.80 an ounce, recorded in March 2008, and that has a real possibility of being broken this year, depending of course on the pace the economy falters and havens of safety diminish.
Goldman Sachs (GS) has even increased its forecast for gold prices to reach the $1,000 an ounce range within a short three months, saying the demand for safety is increasing far beyond what it thought it would. Formerly they thought it reach only about $700 an ounce.
Every possible way of buying gold is in demand, from holding it physically, to futures contracts to investing in exchange-traded funds (ETFs). All of it is being brought about from safety and inflation risks in the market.
Physical gold has been in huge demand as the unbelievable and unprecedented and foolish bailouts have committed the government to far more money than it has to spend, and could virtually destroy the value of the U.S. dollar and bring it to be a very weak currency, the reason for the migration toward owning gold coins, which in a number of cases is taking longer and longer to fulfill orders.
Some of the gold producers from North America that have been recently upgraded by UBS because of gold as a haven of safety are UBS upgraded Agnico Eagle Mines (AEMO) (AEM), Barrick
Gold (ABX) (ABX.TO), Eldorado Gold Corp (ELD.TO), Newmont Mining (NEM) and Goldcorp Inc (GG) (G.TO) to "buy" from "neutral."
For Centerra Gold (CG.TO) and Franco-Nevada (FNV.TO) UBS retained its buy rating and target prices for the gold companies.
Moving quickly to take advantage of the volatile market, the largest gold-backed exchange-traded fund, the SPDR Gold Trust said its current gold inventory is at its highest levels, now standing at 859.49 tons. A huge increase in just a couple of days from 6.12 tons of gold it held on February 2.
One interesting factor in the overall gold picture is whether Barack Obama will get his almost $900 billion economic stimulus package passed. If he does, gold should skyrocket, if he doesn't, it should climb based on fundamentals alone, but it may not rise nearly as projected with the stimulus plan factored into the prices. The gold bulls would be slower to move it up, although there aren't many safe places to put their money regardless. The stimulus package would just make it happen much quicker, as a sense of urgency would settle in.
There's no doubt that gold futures and most other companies and ETFs related to gold will rise with it in 2009. With few havens of safety left, gold, and its cousin silver should flourish during these tough economic times, and gold investors will flourish with them.
Gold investors should be able to put their money into any well run gold producer this year and do well, along with investing in gold futures, which will continue to run up. Other gold investments set to do well will be gold ETFs, which with the larger companies are saying they're having no problem acquiring the needed gold to line up with investors' demand.
On the other hand, some gold coin sellers have said with some coins they're having trouble meeting specific demand, saying they have waiting lists into the weeks. Either way, gold in general will continue to perform strongly in safety and price, and gold investments won't disappoint this year in any way.
Even though gold was one of the better performers last year, the temporary resurgence of the U.S. dollar kept it from moving upwards when it should have been. That performance is about to rise again for gold, consistent with its usual consistency and price increase.
The huge amount of money pushed in the stimulus packages are starting to concern investors - as it should - and they see the U.S. dollar will start to gradually collapse under the mighty force of the fiat money printing press, which is the only way it will be able to be paid off. But that will lead to inflationary pressures, which will again push traders and investors toward gold.
What remains to be determined is how long it will take, not whether the time arrives. But either way, gold is going to break out again this year, and most analysts are forming a consensus that gold will push past the $1,000 barrier before 2009 is finished. And I think they're right.
Inflation is being held in check from the fact that people have stopped buying things or traveling much, holding down energy prices for now. That will change as the general economic struggles improve some, but then inflation will surge forward, which will benefit gold prices and gold traders and investors as well. Gold futures will continue to rise for some time to come, even if it's a bumpy ride at times.
The current record for gold is at $1,030.80 an ounce, recorded in March 2008, and that has a real possibility of being broken this year, depending of course on the pace the economy falters and havens of safety diminish.
Goldman Sachs (GS) has even increased its forecast for gold prices to reach the $1,000 an ounce range within a short three months, saying the demand for safety is increasing far beyond what it thought it would. Formerly they thought it reach only about $700 an ounce.
Every possible way of buying gold is in demand, from holding it physically, to futures contracts to investing in exchange-traded funds (ETFs). All of it is being brought about from safety and inflation risks in the market.
Physical gold has been in huge demand as the unbelievable and unprecedented and foolish bailouts have committed the government to far more money than it has to spend, and could virtually destroy the value of the U.S. dollar and bring it to be a very weak currency, the reason for the migration toward owning gold coins, which in a number of cases is taking longer and longer to fulfill orders.
Some of the gold producers from North America that have been recently upgraded by UBS because of gold as a haven of safety are UBS upgraded Agnico Eagle Mines (AEMO) (AEM), Barrick
Gold (ABX) (ABX.TO), Eldorado Gold Corp (ELD.TO), Newmont Mining (NEM) and Goldcorp Inc (GG) (G.TO) to "buy" from "neutral."
For Centerra Gold (CG.TO) and Franco-Nevada (FNV.TO) UBS retained its buy rating and target prices for the gold companies.
Moving quickly to take advantage of the volatile market, the largest gold-backed exchange-traded fund, the SPDR Gold Trust said its current gold inventory is at its highest levels, now standing at 859.49 tons. A huge increase in just a couple of days from 6.12 tons of gold it held on February 2.
One interesting factor in the overall gold picture is whether Barack Obama will get his almost $900 billion economic stimulus package passed. If he does, gold should skyrocket, if he doesn't, it should climb based on fundamentals alone, but it may not rise nearly as projected with the stimulus plan factored into the prices. The gold bulls would be slower to move it up, although there aren't many safe places to put their money regardless. The stimulus package would just make it happen much quicker, as a sense of urgency would settle in.
There's no doubt that gold futures and most other companies and ETFs related to gold will rise with it in 2009. With few havens of safety left, gold, and its cousin silver should flourish during these tough economic times, and gold investors will flourish with them.
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