Home Based Gold Trading

You can find numerous home-based business opportunities to make money online but I would categorize online gold trading as the optimal business opportunity. Through the years, I have experimented with numerous businesses like currency trading, stocks trading, multilevel marketing and numerous online businesses but still trading gold online allures me the most. It can generate monthly residual income and most importantly it's steady.

So exactly why is online gold trading so lucrative and attractive? To make it in layman terms, the gold market is quite predictable. Precious metals specifically physical gold is on a high demand because one of the reasons is due to the U.S government debts. The government have piled up trillions of debts and precisely what they are doing is to print lots of of paper dollars to resolve the debts. Therefore devalued the U.S dollar. When that happens, people's confidence fell and these people start to purchase physical gold.

But buying gold in physical form is not the best case for people having very little capital since the gold price is currently costly per ounce. So when you trade gold online, you're allowed to leverage on the margin account that the broker provides you. By trading properly and adhering to the rules of a profitable gold trading system, you'll be can handle risk and money effectively. Furthermore, as you can find value in gold, the risk of losing money is minimal.

For almost any other businesses around, you can be sure that you'll need a lot of hardwork and starting a business is really tedious. The hardest thing you will find is that not only your energy and hard work will be thrown away, your capital is gone too. This show that there is no guarantee you are able to be successful in that business even you have invest your efforts into it.

The great thing with regards to online gold trading is that you don't need any knowledge or technical analysis abilities to do well.There are 2 things you'll have to invest in and they're: a affordable capital of around $1500 to $2500 and a gold trading software that can help you handle your trades according to the ever-changing market conditions.

There are many benefits of online gold trading that many other business won't have. You do not need to deal with any clients, you don't need a lot of time to monitor the market and there is not much maintenance needed. You will only require to spend couple of minutes per day to ensure that the gold trading software is working well and then you don't have to monitor much after that. When this semi-automated business is successful for you, you could also branch out into other businesses or do whatever other things that you don't have time to do before.

Another beautiful thing is that you don't require to have any knowledge or education to be in this online gold trading business. Any individual can make recurring money from it. The only thing that needs constant updates and keep adapting to the market conditions is the auto gold trading system. This trading software will require to have one of the most superior technology to track the history of gold price and to adapt to the ever-changing market conditions.

The author, Daniel Su, is a professional currency and commodity trader who provides free premium gold trading tips and resources to help traders achieve their long term financial success.

China Now World's Largest Market For Silver Investment

In spite of rapid development in the Chinese silver market over the past decade, both silver demand and supply are expected to achieve further growth, says a Thomson Reuters GFMS study released Thursday by the Silver Institute.

In 2011, China’s demand for silver bars and coins soared to 17 million ounces, accounting for 8% of worldwide net purchases of physical silver.
The report, The Chinese Silver Market, forecasts growth in China’s domestic silver mine production over the next couple of years. “This growth is premised on a strong project pipeline from primary silver mines, coupled with ongoing gains in silver produced as a by-product of base metals and gold mining,” said the study. “Gains will be further augmented by a greater degree of commercialization and consolidation across the Chinese mining industry.”

Meanwhile, investment demand from Chinese silver investors has jumped in recent years, making China the world’s largest market for both physical investment and paper trading of silver future and other similar contracts, says the study.

Thomson Reuters GFMS’ analysis determined China’s supply of silver has grown to 281.5 million ounces between 2002 and 2011. “This rapid expansion was due to a combination of, firstly, substantial economic growth during this period (GDP growth has averaged 10% over the last 10 years), igniting industrial development, and secondly, rising commodity prices which helped accelerate exploration, development and, in turn, mine output.”

The third source of supply is imported silver bullion with the final contribution made by silver recovered from imported base metal concentrates, mainly a by-product of copper, lead and zinc production.

The report discusses four mains components of Chinese silver supply, including mine production, which last year recorded an increase for the ninth consecutive year to reach 104.6 million ounces. Secondly, domestic scrap supply has been rising steadily as Chinese industrial fabrication increased to 31.9 million ounces of silver last year.

MINE PRODUCTION

Continued investment by larger, state-owned Chinese mining companies has continued to yield productivity and output expansions, both through the development of new mines sites, and the modernization of equipment and processes at existing sites, Thomson Reuters GFMS observed. “We also estimate that exploration spending in China remains elevated, with the larger miners undertaking aggressive exploration programs in country.”

The biggest slice of industrial demand has come from the electrical and electronics sector, estimated at 40 million silver ounces in 2011.

In the meantime, China has become the world’s largest silver jewelry fabricator. “Looking ahead, we expect to see further growth in jewelry fabrication volumes in coming years,” the report advised. “Ongoing urbanization should fuel the expansion of retail outlets and lift the exposure of silver as fashion jewelry alternative.” The report also suggested that as western economies recover, further gains in Chinese jewelry fabrication will be achieved.

“This has propelled China into becoming the world’s second largest silver fabricator, with its share of global demand standing at 17 percent at the end of 2011.” Overall, silver fabrication demand has grown to 159.5 million ounces or 137% from 2002-2011, Thomson Reuters GFMS estimates.

“This report underscores China’s growing importance to the global silver market,” said Michael DiRienzo, executive director of the Silver Institute. “It is impressive to see the dramatic development in so many sectors of their domestic silver market in the last decade.”

 

    

Gold May Be Near A Peak

If there has been one thing over the years that I have learned. It is this. Do the opposite of whatever Goldman Sachs says. This is the most positive statement I have heard for the Gold and Silver markets in some time. Expect Gold and Silver to rally near the end of December.

While we see potential for higher gold prices in early 2013, we see growing downside risks. As a result, we find that the risk-reward of holding a long gold position is diminishing,” the bank said."

"Goldman Sachs lowered its gold price forecasts across the board on Wednesday, noting increased chances for weakness.

The risk-reward of holding a long gold position is diminishing? You could of fooled me. The rewards only seem to get greater and greater everyday. Regardless of the short term manipulated price changes.

Investing In Gold Mining Stocks

Gold mining stocks is an excellent way to invest in the gold market. Gold-based stocks are not as pure of a play as buying gold futures or a gold ETF, but it is still a solid and probably more conservative investment approach than the more risky gold futures. Generally, gold stocks will move higher if the price of gold is trending higher. The larger gold companies are typically the safer and better bet when buying gold stocks. There are numerous small companies with little operating history that make up the very speculative group of gold mining stocks. They can often fail to participate in rallies, as they are less well-known and sometimes very questionable companies. The price of gold is your only concern when investing in gold futures, but more factors can affect the price of a gold mining stock than just the price of gold. Gold stocks can move with the overall market. If the stock market is trending lower, gold stocks could still be under pressure even if the price of gold is moving higher. Below are the main publicly traded gold producers in the United States. They are the largest and probably the more conservative investments in the industry. I don’t recommend speculating in the gold penny stocks. They are usually nothing but trouble.

• Barrick Gold (ABX)

• Goldcorp Inc (GG)

• Newmont Mining (NEM)

China’s $3.8 Trillion Hemorrhage

Over the past decade, about $3.8 trillion has left China illicitly. The trend, if you’ll recall yesterday’s discussion, is accelerating. Somewhere around $50 billion per month is flooding out of China.

Today I want to cover the final ramifications of this monetary hemorrhage, and why it matters to your investments and your wealth…

In addition to investing in Chinese assets — stocks, property, gold, etc. — there’s long been anecdotal evidence of Chinese moving funds offshore in shady ways, as illustrated by the Vancouver story about suitcases full of cash. In other times and other places, I’ve heard similar stories of Chinese suitcase money: in Russia, across the Middle East, in Africa and South America. 

There’s an old saying in the field of statistics that “The plural form of the word anecdote is data.” And recently, a number of investigators have gained access to much more hard data about how much Chinese money has moved overseas. The amount of money is huge, to the point of shocking.

At the individual level, what’s a Chinese saver to do? Over the past decade, the Chinese have sought wealth preservation, if not investment returns, in China’s stock market, as well as in Chinese property markets. These ideas worked out well for some Chinese investors, but not for others. Plus, as I mentioned yesterday, the Chinese buy gold — lots of it. 

The bottom line is that large numbers of Chinese are moving money offshore, by hook or by crook. According to Hurun Report — a Shanghai-based service that caters to a very upscale clientele — the average wealthy Chinese (defined as having a net worth over 10 million yuan, or about $1.6 million) holds 19% of his assets overseas. 
Meanwhile, per Hurun, 85% of wealthy Chinese plan to send their children to school outside China, while 44% have plans to emigrate at some point in their life. In and of itself, that’s hardly a ringing endorsement for the future livability of China.

Also, according to a report issued Oct. 25, 2012, by the Washington, D.C.-based Global Financial Integrity (GFI) group, almost $3.8 trillion (yes, trillion!) illegally exited the Chinese economy between 2000 and the end of 2011. About $602 billion left China in just 2011, so the trend is accelerating. 

Indeed, if about $50 billion per month ($602 billion divided by 12 months) left China in 2011, it’s no wonder that, for the past year, we’ve seen market-moving reports that China’s economy is slowing down. Perhaps China’s economy isn’t so much “slowing down,” in many respects, as it’s decapitating due to illicit outflows.

Silver And Gold Bullion – Which One Is A Better Investment?

An important consideration if you want to invest in precious metals is the choice between silver and gold bullion. These are two of the most popular metals chosen, but they are not your only possible choices because you can also choose a palladium bullion investment or other precious metal instead. You can also choose a gold and silver investment, buying both of these metals in varying amounts. If you only have enough capital to choose one though, which is a better choice when it comes to investing? Both investment in gold and silver have seen rapid price increases in the last few years, but right now silver is more affordable and the initial investment amount required may be lower.


If you are trying to decide between silver and gold bullion, look at your investment goals as well as your personal preferences. Determine the type of bullion you want, and the form you want to invest in. You can pick among various forms of physical metal, such as coins, bars and even nuggets. As an investor there is no right or wrong choice between silver and gold bullion, the final answer will depend on what you are looking for as an investor and collector.

Silver investing will allow you to buy more bullion than gold will at the start, but you may not see a drastic rise in price the same way that gold has. Both of these precious metals will see market fluctuations, and usually when one metal increases in market value the others also follow. Gold bullion has risen to record highs in the last few years, at a pace that silver has not kept up with. Palladium bullion is another investment choice that may not be well known but can be a terrific investment in the precious metals sector. Silver and gold bullion both can be the right choice for a number of investors.

As a conclusion, answering the question whether you should purchase gold bullion or its silver counterpart, is perhaps like comparing which is better, eating apples or oranges.

UK Economy Is The Best In Europe

The best economic performance for five years means the UK now leads the way in Europe, experts said last night. Britain stormed out of recession despite the slowdown in the global economy and the escalating crisis in the eurozone. Research group Capital Economics said the UK was the strongest performing major economy in the world between July and September – and it will outstrip the rest of Europe until at least 2015.

Capital Economics predicted outright recession across the eurozone in the coming months, with Germany not recovering until early 2014 and France, Italy and Spain not recovering until 2015 at the earliest.
Samuel Tombs, an economist at Capital Economics, said: 'The latest GDP figures suggest that the UK economy is emerging from recession at the same time that the eurozone is entering one.
And there are still a number of constraints that will mean that the economy struggles to grow at all in the coming quarters.’

It marks a significant turnaround for Britain which was among the first of the major economies to suffer a double-dip recession following the fragile recovery from the banking crash four years ago.
The Capital Economics report warned that Britain faces another quarter of decline – with output sinking 0.4 per cent in the final three months of this year.

But the economy is expected to bounce back in the first quarter of next year – avoiding a dreaded triple-dip recession while the rest of Europe sinks deeper into the mire.

The latest forecasts from the International Monetary Fund also suggest Britain will be the strongest economy in Europe next year – although it will fail to keep up with the US.

Why A Rising Gold Price Is Bad News

We have written about our concern that high annual deficits and accumulating public debt will lead to higher mortgage rates and to higher interest rates in general, burdening future generations with the interest cost and jeopardizing the country’s credit rating, continuing to burden economic growth, and adversely impacting employment.

The Fed has temporarily countered the interest rate risk by artificially keeping interest rates low by inflatiing the money supply, thus discouraging savings and investment, causing long-term misallocation of resources, and leading to higher commodity prices and living expenses down the road. This note explains why a rising gold price is bad news.

But many businesses are not interested in borrowing to finance expansion, given the difficult economic situation. They are concerned that consumers are paying down debt rather than spending, are burdened by ever more regulation, and are unsettled by temporarily extended and unknown future tax rates on income, capital gains, dividends and estates.

Add in the higher costs of employment benefits — particularly health care insurance costs — and you have an economic environment in which established businesses have no incentive to expand and entrepreneurs are not keen to take the risk of starting new businesses.

Trouble Ahead

Unfortunately, a rising gold price signifies trouble ahead. It’s a kind of canary in a coal mine. As more individuals become concerned that their dollars will buy less in the future and exchange them for hard assets, commodity prices such as food and fuel and metals and building materials will continue to rise. Foreign central banks that hold large quantities of depreciating dollar-denominated debt will demand higher interest rates to compensate for their loss in value or will swap out of dollars to buy gold, and the gold price will continue under upward pressure, while the value of the dollar declines.

Investors Can Hedge Against The Risk Of Hyperinflation

As an individual you can protect yourself to a large extent against the erosion of your purchasing power and economic disaster by adding gold and silver to your investment portfolio. Owning gold can provide security and opportunities not available with other investments.

But few American investors are familiar with gold. Its high value, its need to be stored somewhere secure, and the fact that it is available in sundry forms by a broad spectrum of sellers including bullion dealers, commodity brokers, stockbrokers, coin dealers and mutual fund managers lead to exaggerated claims, myths and general confusion.

Fed’s Straitjacket

The only way out of the problem is to expand the economy, to get businesses to hire and put Americans back to work. People with stable jobs pay taxes, pay their mortgages and buy goods and services. The Fed has limited tools to accomplish this: injecting money into the economy and lowering interest rates, both of which they have done with little benefit. As noted, businesses are reluctant to hire and expand regardless of the availability of short-term credit.

The main reason that businesses will not expand and hire: Administration policies that result in more expansive government, entitlements and regulation, which mean both higher cost of doing business and higher government debt. Which brings us back to the depreciating dollar, the reluctance of foreign holders to hold more US government debt, higher bond interest rates (when they are allowed to rise), and higher gold prices.

Gold's Shifting Floor Price

While the re-election of Barak Obama to the US presidency has created a positive backdrop for gold, as we head toward Diwali some debate remains about the level of buying seen in Asia.
While Indian traders remain positive about gold demand in the country during this festive season, as my colleague Shivom Seth writes in the piece Indians head for gold as Diwali closes in, some commentators, like Barclays Capital, have been disappointed by levels of demand.

Standard Bank, however, writes in its latest Commodities Daily report that "Although there was some selling of gold, the metal is finding support on approach of $1,700. We continue to see good physical buying, not only from India ahead of Diwali but also from South East Asia. ETF holdings also reached new all-time highs yesterday, with total holdings standing at 83.33m oz - up almost 8m oz since the start of the year."

But, as James Steel pointed out on Mineweb.com's Gold Weekly podcast earlier this week, the phyiscial market has definitely been eclipsed by investment in recent years. 10 or 15 years ago, he says, the physical jewellery market was 75% or more of physical demand - that has dropped to something like 45% now.

With India and China now dominating the market - different economic drivers also come into play. As he says, "those economies are more price sensitive whereas in the west we think there's a stronger relationship between jewellery demand and employment and income rather than price."
Jewellery is still Steel points out, the single biggest component of demand, but he says "you have to take into account that investment is very important in determining near-term prices."

Steel adds that another thing to bear in mind about the jewellery side of the market is the shift in locus that has taken place in the last 10 to 20 years from West to East.

"This is important because it means that when gold has traded higher, we get a quicker response on the demand side from the emerging world because they cut back purchases more quickly and so that's why we are not in the massively bullish camp because over $1900 we'll begin to see some reduction in jewellery demand. Correspondingly you fall down to $1550 or so and we're likely to see an increase in jewellery demand," he adds.

German Crisis: European Commission Cuts 2013 Growth Forecast For Eurozone

The European Commission cut its growth forecast for the Eurozone as the debt crisis ravages southern Europe and gnaws at the economic performance of export-driven Germany. The 17-nation euro economy will expand 0.1% in 2013, down from a May forecast of 1%, the Brussels-based commission said. It cut the forecast for Germany, Europe's largest economy, to 0.8% from 1.7%. Europe's "economy continues to deal with a difficult post- financial crisis correction," Marco Buti, head of the commission's economics department, said in a statement.

Next year's near-stagnation across Europe masks a north- south divide, in which the economy ekes out positive numbers along an arc from Finland through the Low Countries to France, and contraction grips Greece, Spain, Italy, Cyprus, Portugal and Slovenia.

North-south tensions over the debt crisis will bubble up on November 12, when finance ministers judge whether Greece has made enough budget cuts and economic reforms to deserve the next installment of 240 billion in aid offered since 2010.

"The distress in more vulnerable member states has progressively started to affect the remainder of the union." The economic falloff may make it harder for European governments to pull Greece back from the brink and deal with a possible aid program for Spain, leaving the debt crisis to fester for a fourth year. Technically, the euro area will avert a recession, defined as two consecutive quarters of contraction, though the overall economy will still shrink 0.4% in 2012, ending a two-year expansion, the commission said.

Euro governments are aiming to wrestle it down to 120% by 2020. Germany is becoming less resistant to the economic woes of southern Europe just as Chancellor Angela Merkel, the dominant figure in handling of the debt crisis, embarks on a campaign for athird term in elections in late 2013.

Buti pointed to "wide cross-country divergences in economic activity and labor market dynamics" in a common-currency area meant to bring Europe together, not fracture it. The commission predicted "moderate" growth of 1.4% in 2014 that leaves Cyprus alone in negative territory.

How To Buy An Investment Property In Hot Markets?

Investing in real estate is a time-honoured method of achieving financial success. Throughout the ages, investment property has helped a lot of people make a great deal of money - sometimes quickly, sometimes over the long term. Those who invest for the short term are generally known as property speculators, and they play a dangerous game. Long term property investment is for forward thinkers who have an investment horizon of at least five years. The objective of a long-term property investor is to buy a property at a low price and sell it at a higher price. To be successful at this, one needs to know what is going to happen in a certain location over the next few years.

Real estate gains its value because of new infrastructure projects, shopping centres, public transport facilities, etc. These can happen only in new growth areas, because established areas tend to have reached saturation point in these respects. If you look at the central locations of Pune, you will see that nothing more can happen there. These areas are saturated. In many of them, residents are facing a lot of problems because of overcrowding, lack of parking, open spaces, playgrounds for their kids, pollution and traffic clogging.

Even with the best of intentions, the city planning authorities cannot do anything to make life better for them - there is simply no space left. Though the property rates in Pune's prime areas are high, they cannot rise much further because the future has nothing to offer there. Long-term property investment means buying real estate in an area while it is on the rise - not when it is in saturation or decline mode. Buying investment property means buying it where people are going, not where they have already been for generations.

You will need to invest in a growing location, not an established one. This is especially true if you are a middle-class person living off a middle-class income. There are two reasons for this. First of all, properties in established locations cost a lot of money. At the same time, their long-term investment value is lower. The reason for this lies in the nature of the real estate market. The costly (or 'prime') areas gained their value over a certain period of time but will eventually stagnate or even down.

Even with the best of intentions, the city planning authorities cannot do anything to make life better for them - there is simply no space left. Though the property rates in Pune's prime areas are high, they cannot rise much further because the future has nothing to offer there. Long-term property investment means buying real estate in an area while it is on the rise - not when it is in saturation or decline mode. Buying investment property means buying it where people are going, not where they have already been for generations.

A hot property market is one where there are upcoming changes in the infrastructure, and where homebuyers are headed. In the case of Pune, this would especially include areas like Undri, Baner, Kharadi and Wagholi. Infrastructure can include things like major highway construction and shopping and entertainment facilities. Look for areas that have a lot of employment options, because people always want to live close to where they work.

Also keep your eyes open for areas where large corporations are relocating or already exist and have room to expand. When this happens, the real estate market in that area will boom due to demand for housing and small businesses. Business is one of the most reliable drivers for real estate prices.

Silver Price Projection – For 2013

An objective and reasonable estimate for the price of silver at the next intermediate peak (estimating 2013 – Quarter 2) is $50 to $60 per ounce (current price is about $28). This is not a prediction based on wishful thinking and hope, but a best estimate based on rational analysis of data stretching back to 1975. The actual price for silver at its next peak could be higher or lower, and the peak might be earlier or later, but this price range and approximate time is, by this analysis, the most probable.

Until the last century, silver and gold had been money for thousands of years. During the long history of gold and silver, the price ratio of gold to silver has averaged, depending on analysis, around 15 to 20. Since 1975, it has been as low as 17 and as high as about 102. The ratio is low when silver is expensive compared to gold – which occurs at peaks in the price of silver, such as in early 1980. 

Silver is a smaller market and much more volatile in price than gold, so the ratio can stretch one way or the other depending on the degree of speculative fervor in the market or the degree of price depression and disinterest in precious metals, such as in 1991. Extremes in the ratio usually occur at highs and lows in the prices of both metals.  

How is this useful? 

Instead of working with the gold to silver ratio, invert it and use the silver to gold ratio. That ratio peaks with price peaks in silver and bottoms with price bottoms in silver. However, there is no simple answer as to what ratio is “high” or “low” since the ratio might be very different between the decade of the 1970s and the 1990s. 

There is, however, a technical indicator called the Relative Strength Index that is normalized between 0 and 100. The RSI can be used with any time scale, such as 5 minute price data, or 50 month data. The result is the same, a number between 0 and 100, with low numbers (such as 14) indicating a severely “oversold” condition and high numbers (such as 80) indicating a severely “overbought” condition.

The problem is that the silver market, while overbought, could rally further and become even more overbought, and the RSI of the ratio might rise even higher, say to 85, while the price of silver jumps even higher. If you had sold silver (when the RSI was 78), you missed some profit, and if you sold short, you incurred some losses. This is the dilemma of all traders: when to buy and when to sell. (Few people can buy at the lows and sell at the tops, so they need other tools to help time their trades.) I don’t know of any simple and fool-proof answer.

What I do know is that we can delve deeper into the above SI/GC ratio analysis and come to some high probability predictions that will give us a reasonable degree of safety and security in our quest to buy low and sell high.

• Run the same Relative Strength Analysis for the SI/GC ratio, but use a longer time scale – like 40 weeks. Further, average the 40 week RSI numbers over a centered 11 week period, using the current week’s number plus the 5 weeks both before and after the current week. The result is a smoothed RSI that is centered about the relevant week in the analysis. (Clearly the last few weeks in the series are not using the future RSI values.) This removes much of the short term “noise” – the weekly fluctuations that mean nothing in the long term.

• Calculate the 7 week simple moving average of the actual silver prices. This gives a short term average that is much more volatile than the 65 week moving average.

• Calculate the 65 week simple moving average (add the prices for the last 65 weeks and divide by 65) of the actual silver prices. This produces a long term trend for silver prices that has removed all but major fluctuations in price.

• Subtract the 65 week average from the 7 week average. Then divide by the 65 week average. This produces a percentage above or below the long term trend of the 65 week moving average for silver. 

         This is important because it measures a deviation from average in percentage terms, 

          but not in actual silver prices, which have varied over the past 12 years from $4.01 

          per ounce to nearly $50 per ounce. Further, it relates the percentage (over or 

         under) to a long term moving average, which accounts for both bear and bull 

         markets in silver prices.

• Examine the graphs of both the RSI and the percentage of price deviation. You will find that major lows in the RSI and percentage price deviation (PPD) occur approximately every 2 years, and similarly, highs occur about every 2 years, but the timing is not consistent enough that you would trade on these cycles. A chart since 1975 will not display well due to the amount of data. However, the following chart (data since 2004 is more manageable) shows the correlation between the RSI of the SI/GC ratio and the percentage of price deviation in silver.

• Graph the 40 week (centered) RSI of the SI/GC ratio against the percentage that the 7 week moving average of prices is above or below the 65 week moving average of prices (percentage of price deviation or PPD). The graphs of both are similar as to direction, highs, and lows. In fact the correlation since 1975 is 0.69 and since 1/1/2002 (silver bull market) is 0.85, a high degree of correlation.

Why Invest In Gold?

Investors should have some gold in their portfolio, according to a recent research report from Trinity College. The report found that buying gold is a good hedge against declines. That's because gold prices increase dramatically after a stock market crash, but only for about 15 days. 

After that, gold prices tend to lose relative value against stocks, which often rise again shortly after a crash. For similar reasons, gold also tends to gain in value as the value of the dollar declines. Many investors also buy gold as a hedge against inflation. 

This research showed that gold prices increased from 1999 through 2006, while the stock market declined from 2000 to 2003. Gold prices spiked when the stock market crashed, as scared investors panicked, sold their stocks and bought gold. However, when panic was over, the money moved back into stocks, and gold was no longer a better investment.

Gold should not be bought alone as an investment. Gold itself is speculative, and can have high peaks and low valleys. That makes it too risky for the average individual investor. Furthermore, despite the peaks and valleys, over the long run the value of gold doesn't beat inflation. Instead, gold should only be part of a diversified portfolio which includes other commodities such as oil, mining and investments in other hard assets. 

The Bulls Are Back: Several Factors Lead To Gold And Silver Rally

For months, gold seemed to languish in the $1600 range, while silver hovered around $28 per ounce.
Many wondered what in the world was going on, while others questioned the metals’ resilience as an investment.
Was the bull market finally over?

Over He Last Two Weeks, The Bulls Have Come Roaring Back.

Since our last market update on 8/23, gold has continued its run, adding another $95/oz!
As of today (9/19), gold has run to over $1765/oz. While we’ve seen some profit-taking by institutional investors – which typically follow a run like this – gold has held strong at $1730 for the last few days.

With the information available at the time, it was too early to tell. One analyst speculated that gold would cross the $1700/oz mark in three months.
While that price forecast was certainly correct, the analyst was off on his timing.

So what’s driving This Gold-And-Silver Running Of The Bulls?

In reality, there wasn’t one, singular event that spurred the sudden rally.
Several factors – each with its own significance – have combined, determining what markets will do at any given time.

Here are a few of the factors we believe – along with many analysts – are responsible for the growth of gold and silver prices:

1.    Weak U.S. Jobs Report:

Last Friday, the Bureau of Labor Statistics released its monthly jobs report for August, and the news was not good.
Last month, the economy added a dismal 96,000 private sector jobs, down from 141,000 new jobs in July.

The unemployment rate did drop from 8.3% to 8.1%, but mainly because nearly 370,000 people stopped looking for work altogether. Bleak employment growth is a bad omen for the economy, which fuels speculation about further monetary stimulus.

2.     New Steps Taken By The Fed To Invigorate The Economy:

Ah yes, the old fable, “quantitative easing.”
Fed chairman Bernanke, along with other officials, has been quietly discussing just that.
While they may announce a new round of bond purchasing this week, aimed at lowering long-term interest rates (once again), and hoping to spur borrowing and spending, many don’t expect this to happen until later in the year.

Yet the mere rumor of a third round of monetary stimulus is enough to fuel a gold and silver rally. One analysis forecasts that gold will soon re-test its all-time high of $1920/oz if the Fed pumps the markets with added cash.

3.     U.S. Presidential Election:

Last but (certainly) not least, this year’s presidential election is part of the equation.
With the race at a dead-heat, many investors feel uncertain about the upcoming year, especially in terms of political leadership in Washington, DC.

While the election’s outcome is unlikely to have a major impact on the long-term price of gold or silver, uncertainty surrounding the race has been a short-term catalyst for growth in the metals’ prices.

After all, investors turn to goldcoins and silverbullion in times of grave uncertainty.
There are countless explanations for the recent rally – and current outlook – of gold and silver prices, and we have named but a few. Indeed, some are less obvious, even to the trained eye. (For instance, central banks in China and India have increased their gold-purchasing in the last couple of years.)

Investing In Silver: Double Down On The White Metal's Gains

Gold remains the favorite of precious metals investors, but silver is now a strong number two...with a bullet.

That means you should consider investing in silver now before it goes even higher.

In case you haven't noticed, after wallowing around in the mid-20s for months, silver prices have shot back over $30 an ounce.

And thanks to wildly bullish technical and fundamental indicators, silver could soon retest its 2011 high, or even blow through it.

If that happens, silver's run-up will hand investors a fortune, so here's how you can cash in.

Strong Signals for Silver Price Rally

From a technical viewpoint, the rally in silver may be just beginning.

You see, the silver futures markets are in what's known as "backwardization."

In other words, it costs more to buy silver today than it would to buy silver a month from now, or six months from now.

For instance, the September 2012 silver contract closed on Aug. 27 at $30.90. The December 2012 contract closed the same day at $29.64. And the March 2013 contract closed at $27.28.
It's a rare condition that occurs when the current cash price is higher than distant contract prices.
It's a rare condition that occurs when the current cash price is higher than distant contract prices.
There are also signs that industrial demand is improving. Unlike gold, silver has a bevy of critical industrial uses. There's silver in just about every electronic device out there - from televisions to computers to cellphones to tablets.
On top of all that, the latest Fed minutes suggest the central bank is ready to begin another round of quantitative easing, which has been favorable for silver and gold. Europe and China are also in stimulus mode.    

Why Invest In Gold?

Investors should have some gold in their portfolio, according to a recent research report from Trinity College. The report found that buying gold is a good hedge against declines. That's because gold prices increase dramatically after a stock market crash, but only for about 15 days. After that, gold prices tend to lose relative value against stocks, which often rise again shortly after a crash.

This research showed that gold prices increased from 1999 through 2006, while the stock market declined from 2000 to 2003. Gold prices spiked when the stock market crashed, as scared investors panicked, sold their stocks and bought gold. However, when panic was over, the money moved back into stocks, and gold was no longer a better investment.
Gold should not be bought alone as an investment.

Gold itself is speculative, and can have high peaks and low valleys. That makes it too risky for the average individual investor. Furthermore, despite the peaks and valleys, over the long run the value of gold doesn't beat inflation. Instead, gold should only be part of a diversified portfolio which includes other commodities such as oil, mining and investments in other hard assets.

For similar reasons, gold also tends to gain in value as the value of the dollar declines. Many investors also buy gold as a hedge against inflation.

Gold Price Holds Near $1,710, Awaits Fed, Bernanke

The gold price stabilized near $1,710 per ounce Wednesday morning as investors awaited the outcome of today’s Federal Reserve meeting. Gold prices have come under considerable pressure over the past two weeks amid broad-based weakness in financial markets and a rebound in the U.S. dollar.  On a month-to-date basis, the spot price of gold is now down by 3.8% and on pace to snap a four-month winning streak.

Gold stocks mirrored the stability in gold prices, as the Market Vectors Gold Miners ETF (GDX) oscillated between gains and losses near $50.95 per share.  The GDX has fallen 5.1% in October and is at risk of posting its first losing month since May.

On Wednesday, the majority of large-cap gold stocks posted modest advances.  Barrick Gold (ABX) rose by 0.1% to $38.93 per share, IAMGOLD (IAG) by 0.5% to $15.40, and Kinross Gold (KGC) by 0.8% to $9.96 per share.

Silver held steady alongside the gold price this morning, inching up by $0.07, or 0.2%, to $31.77 per ounce.  However, gold’s sister precious metal has experienced a challenging period of late as well, dropping 8.0% thus far in October.  Furthermore, silver is also on track to post its first losing month since May.

As for the Federal Reserve, while last month’s Federal Open Market Committee (FOMC) meeting marked the start of the open-ended third round of quantitative easing (QE3), today’s session is expected to contain far less significant announcements.  Instead, most market strategists are anticipating that Chairman Ben Bernanke and his fellow central bankers will focus more on their forecasts for the U.S. economy given that QE3 is only in its early stages.

With the Fed unlikely to launch any additional accommodative monetary policy measures at today’s meeting, gold prices could remain under “modest” pressure in the near term – according to analysts at HSBC.

Value Investing Is Not Necessarily Buy And Hold Investing

Many consider Warren Buffett as a great example of a successful value investor and Mr Buffett does ask the question if he will be comfortable holding a company for decades before he decides on making an investment in the stock. However, this is merely to ensure that the company he is considering investing in has quality of earnings and a sustainable competitive advantage that will confer a level of safety should something unpredictable occur in the future. 

Please note that even Mr Buffett will exit a position quickly (or as quickly as the liquidity allows) if he determines that the investment no longer has a merit.
Value investing is a process that aims to deliver outstanding long term returns. However, this should not be confused with the notion that value investors tend to buy stocks and hold them for the long term.

Value Investing is Essentially a Timing Exercise

It is not market timing in the sense most of us understand. Value investors choose to buy a stock when it is cheaper than the intrinsic value of the stock and sell it when it becomes more expensive. 

A company can come out with a news that could not have been predicted. The same stock that was overvalued at a given price, may suddenly become undervalued AT THE SAME PRICE. A new joint venture, FDA approval when the expectation was more delays, striking gold, whatever. Reverse may be true as well. A value investor tries to “time” the value of the company, whereas a market timer will completely miss this development as it is not something he is concerned with.

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