Wall Street Journal: Gold Set for Fresh Highs in 2011

December 30, 2010

Gold bulls say the price of the precious metal is set to reach fresh highs early in the new year, on mounting inflation fears fueled by loose U.S. and euro-zone monetary policies.

With central-bank purchases and Chinese imports emerging to support gains, analysts and traders say they expect the metal to quickly surpass $1,500 a troy ounce, reaching as high as $1,700 an ounce—or even $2,000, according to forecasts by some of the industry’s more bullish participants—before the tide turns slightly in 2012.

The gold market has put in a solid performance in 2010, benefiting largely from sovereign-debt troubles…


2010: The Year for Gold; 2011: More to Come

December 28, 2010

Stock market investors are starting to admit that gold is outperforming just about every other investment category.

In 2010, the price of gold will have risen nearly 30%when this week is through. This far outpaces the Dow, and just about every other stock market index.

But there are two other aspects which are even more important for investors to realize:

1. Gold itself outperformed gold stocks in 2010. This was not supposed to happen. Gold share pundits have insisted for years that gold stocks outpace gold in a bull market. They were wrong in 2010. Investors who attempted to use gold shares as a substitute for gold suffered through poor performance, combined with all the increased risks of investing in shares of companies, as opposed to hard assets.

2. Gold has re-emerged as a major factor in the world investment markets, with a 10-year winning streak and a record-breaking 2010. This means that it has a psychological beach head with investors, who will continue to look to the yellow metal for security as well as profits. Worries about the world economy, monetary policy and the fiscal nightmares of developed nations in Europe, as well as the USA are not going away any time soon. There are no policy proposals on the table in Washington, DC poised to rescue the US and world economies from the deep economic malaise we find ourselves in.

As such, gold should continue to be strong in 2011.

MarketTrendForecast.com: Gold Is About to Power Higher

December 21, 2010

David Banister, a technical analyst with MarketTrendForecast.com, paints a bullish technical picture for gold in his latest analysis, looking for gold to reach $1,525 per ounce in the near-term…


Goldman Sachs: Precious Metals Will Shine in 2011

December 20, 2010

Precious metals will likely generate the best returns among commodities in the next year according to Goldman Sachs analysts.

Precious metals were expected to advance 28 percent over 12 months London-based Jeffrey Currie, Allison Nathan and other Goldman Sachs analysts said in a report issued yesterday.

Gold has risen 27 percent during 2010, heading for a 10th consecutive annual advance. Investors are seeking hard assets as governments and central banks led by the US Federal Reserve pump more than $2 trillion into the world financial system.

Gold will reach $1,690 an ounce within 12 months Goldman Sachs estimates.


Some Profitable Gold and Silver Investing Facts

December 20, 2010

Excerpted from Great Britain’s Market Oracle…

#1) Gold Eagle Sales Are Hot … But Silver Eagles Sales Are Hotter! The U.S. Mint sold more American Gold Eagle bullion coins in November than in each of the previous three months.

With one month remaining, 2010 ranks as the sixth-best year for the Gold Eagle bullion coins. Year-to-date sales from January through November ended at 1,160,500 ounces.

If demand for bullion gold coins continues at the current pace, 2010 will end up as the fourth-best year behind 1999 (2,055,500); 1998 (1,839,500); 1986 (1,787,750); and 2009 (1,425,000).

While that sounds good, sales of silver eagles are leaving gold in the dust, even though (or perhaps, because) silver prices are rising faster than gold prices. CoinNews.Net reveals that silver eagle sales are going through the roof.

The U.S. Mint says 32,890,500 of silver eagle bullion coins were ordered between January and November. That is 4.124 million more than in all of 2009, which previously held the annual sales record.

You may have seen the bears growling that these silver sales indicate a frenzy is at hand and slacking of demand and lower prices are around the corner.

But is it likely that silver would peak when gold isn’t peaking? Gold eagles are a good measure of the buying interest among mom-and-pop investors.

This isn’t the best year in gold eagles, and it’s not even in the top three. So stop worrying about buying at the top of the market in gold OR silver. We aren’t even close.

#2) China’s Huge Appetite for Gold Is Getting Stronger. China is now the world’s biggest producer of gold and consumes all the gold its mines can dig up. China’s miners produced 277.017 metric tonnes of gold so far this year, up 8.8% from the same period last year. While that sounds like a lot, it’s not nearly enough to feed China’s ravenous and growing hunger for gold.

In fact, China imported 209.7 metric tons of gold in the first 10 months of the year. That’s up fivefold compared with the same period last year!

China’s securities regulator has approved the country’s first gold fund designed to invest in overseas-listed gold ETFs. We may have only seen the first course in China’s hunger for gold.

In fact, surging demand from China is already changing the seasonal patterns in the gold price — pushing the annual gold price “peak” from November to February, as gold buying centers around China’s New Year. If current trends continue, the next change may be that February’s peak may not be much of a peak at all.

One more thing — Bloomberg reported that silver exports from China — the world’s largest producer of silver — may slump by 40%! Reason: Silver is an industrial metal, and demand for silver for industrial uses in China is growing by leaps and bounds.

#3) India Dives into Gold and Silver with Both Hands. This summer, many analysts were ready to write off India’s gold market. It seemed the Indian people were sitting on their hands, waiting for lower prices.

But the floodgates of demand opened up as the festival season loomed. India purchased 353 metric tonnes of gold through the end of November. That’s up 113% from the 168 metric tonnes in all of 2007.

As a result, in the third quarter, India’s gold imports hit 624 metric tonnes, passing last year’s total by 100 tonnes, and re-securing India’s spot as the world’s #1 gold buyer.

Part of this is due to the fact that people in India now have access to exchange-traded funds. Investment in India’s gold ETFs tripled in the year through October compared to last year.

When it comes to silver, India is the world’s #1 consumer as well. And imports are up sharply this year, nearing 30-year peaks.





26% and a 10 Year Winning Streak

December 17, 2010

As we approach the end of 2010, gold has been pulling back in what we view as a healthy correction. At this point, investors need to realize a couple of important facts:

1. Despite the recent correction, the price of gold has risen 26% this year. This means that gold has outperformed stocks, bonds, cash equivalents and real estate. The only asset that we know of that has managed to outperform gold in 2010 has been carefully selected rare gold coins which are, after all, gold investments in their own right.

2. 2010 will be the 10th straight year in which gold has risen in value over the course of the year. No other investment or asset class can match that record. And the important thing about this remarkable winning streak is that the conditions that produced these results remain largely unchanged and, in some cases, they have gotten worse. Here are a few examples:

• Concern over the growing national debt has been one factor that has driven investors toward gold. There can be no doubt that these concerns continue and the debt is getting worse. As this is being written, Congress is on the cusp of passing yet another trillion dollar-plus spending budget, complete with billions of dollars in pork.

• The debt has produced a decline in confidence in the US dollar. More and more signs are appearing every day, in China, in Europe, in oil-rich Middle Eastern nations, that confidence in the dollar is a thing of the past. As the US dollar declines, the value of gold investments in terms of dollars, rises.

• America’s trade deficit is still with us and this too puts downward pressure on the dollar. Despite all the talk, America’s dependence on foreign oil and gas persists and this is the lion’s share of our trade deficit. There is simply no end in sight to this set of circumstances.

• Though many Americans don’t want to think about it, the threat of Jihadist terrorism is still with us. If you look back over the last 10 years in which gold has risen in value annually, the event that touched this streak off was 9/11. Though we have not been successfully hit with a massive attack since 2001, the Jihadist threat is still there, from the Fort Hood massacre, to the Times Square bomber and the Christmas Day Underwear bomber. As an IRA guerilla said a generation ago: we have to be lucky every time, they only have to be lucky once.

• Related to the threat above is the possibility of war in Korea and the looming threat of the Iranian nuclear program. Should either one of these crises come to a head, the result will be a financial catastrophe and investors will need the safe haven of gold for protection.

It is most unfortunate that we need gold, but we can all be thankful that we do have it and that it has been providing us with wealth preservation during each of the past 10 years of economic and geopolitical strife. When those conditions go away, we can all relinquish our gold.

New Jersey: Strong gold prices have shoppers investing in bling

December 16, 2010

The rise in gold prices in 2010 has stimulated demand for gold for a variety of uses. This may seem counterintuitive, but everyone loves a winner and people tend to buy something that is rising in value.

This is certainly true of gold and, in the case of the article linked below, it is true of gold jewelry. Rising demand for gold jewelry is nothing new and not particularly surprising, but gold jewelry is not the recommended form of gold investment.

Gold jewelry is beautiful and decorative, but it comes with a huge premium attached, as well as full retail mark-ups that have no place in the investment world. Nevertheless, the fact that many buyers see their jewelry purchases as a form of investment is testament to gold’s status as a store of value…

Strong gold prices have shoppers investing in bling

The run-up in gold prices is driving jewelry prices higher, and it also is driving more people to buy jewelry as an investment, giving jewelry stores a boost after a tough 2009.



Get every new post delivered to your Inbox.