Tag Archives: precious metals

Gold, silver and rare earth; which is right for you?

Gold, silver & rare earth

Which has the strongest trend right now?

In today’s video we will be looking at the gold market, analyzing the silver market, and finally, checking into the rare earth market.

Before you look at the video, you may want to consider doing this as an exercise: Write down which market has the strongest trend – up or down. Then rate the markets. Number 1 ……..Number 2 …….Number 3 ……. Once you see the video it will become clear to you how we rate these markets. It might surprise you.

http://www.ino.com/info/670/CD3336/&dp=0&l=0&campaignid=3

If you’re using MarketClub’s “Trade Triangle” technology the answer is simple and you’ll discover it in a matter of seconds. If you haven’t used our “Trade Triangle” technology, this will be a good exercise for you to look and see just how powerful this technology is and how it can help your trading.

http://www.ino.com/info/670/CD3336/&dp=0&l=0&campaignid=3

We all know that gold has had a big move, but so have silver and rare earth stocks. So what’s next?

I hope this video helps outline some ideas that you can put to good use in the future.

As always our videos are free to watch and there are no registration requirements. All we ask in return is that you Tweet about us and share this video with your friends. Also, please feel free to comment on our blog.

http://www.ino.com/info/670/CD3336/&dp=0&l=0&campaignid=3

Enjoy the video and every success in trading,

Adam Hewison
President of INO.com
Co-founder of MarketClub

GoldMoney Moves into Palladium

goldmoney

Greetings fellow precious metals investors. I have good news for those of you who enjoy the convenience of precious metals storage providers such as GoldMoney. The news is that the team at GoldMoney have announced that they are now offering another precious metal to their clients – Palladium. So thus far they’ve got Gold, Silver, Platinum, and now Palladium. That pretty much completes the precious metals quartet in my opinion. I still prefer gold above all the others but I may look into buying some Palladium sometime in the future and precious metals dealers/storage providers like GoldMoney provide a very convenient and safe way to invest in precious metals.

Here is a brief quote from GoldMoney’s press release:

“As part of our ongoing focus on improvements to GoldMoney’s
services, we are pleased to announce the further expansion
of our precious metals selection. In addition to gold,
silver and platinum, you can now buy palladium for storage
in our Hong Kong vault – another great way to diversify and
optimise your precious metals portfolio with GoldMoney.”

As you can read your Palladium will be stored in Hong Kong which IMO seems like a pretty safe place to keep it. It’s not Switzerland but I guess it comes pretty close.

For more details regarding GoldMoney or their products/services/etc please see their website.

Cheers,
Alan

Why is Gold so Strong?

gold bar

Gold is a highly coveted commodity, but is the causal factor for the strength of the value of gold as simple as it being in high demand? The reason gold is so strong is a combination of factors including its popularity, its stability and its uselessness for anything much more than adornments.

The demand for gold is due to many factors and can be attributed to the fact that the demand for gold is not easily satisfied, giving it value because it is unattainable and rare. Gold is also unique in the fact that even after someone has obtained it, they still want more, with each acquisition being just as valuable. This is known as marginal utility, and this is a trait which gold shares with money – even though you have money you always want more, but you have to work hard to obtain it.

The marginal utility of gold has been high throughout history and most of the 155,000 tonnes which have been mined are still in existence. Despite this, we still mine for gold and extract what we can, making it the most hoarded commodity in the world. Silver was coveted alongside gold for some time, until it was discovered that this metal had industrial uses in photography and electronics for example. Similarly platinum has a price which is much greater than gold, but is not hoarded either, instead being used in industry, primarily in vehicle engines.

However, gold does not have a use which is sufficient enough to encourage us to part with it as an asset. Gold is also easily used as a currency because it is denser than most other metals, is immutable and does not corrode and this allows money exchangers to easily verify the authenticity. Gold is also the most malleable and ductile metal in existence which makes it easily divisible and has historically made gold a preferred metal for coins which cannot be counterfeited.

The Supply of Gold

The rules of supply and demand have proven that when there is an imbalance between supply and demand, prices adjust to correct it. This means that if demand exceeds supply, the price of a commodity will increase to a point where demand reduces due to affordability restrictions, or supply increases to take advantage of the demand.

This balance between supply and demand is always changing and so prices are always adjusting to compensate however, an imbalance has existing in the gold industry for some time because commercial demand is much greater than worldwide production. If this situation were facing any other commodity the prices of that commodity would soar. However, since gold is not consumed – but hoarded – this is not the case. Of the amount of above ground stock of gold, around 120,000 tonnes is available to source at any time. Plus, these stocks are increasing at a relatively rapid rate of around 1.7% each year with the largest annual increase in the last 50 years being 2.1% and the smallest of 1.4% and with advances in technology, the average growth rate of 1.7% per year is expected to continue.

Gold in Demand

Gold is in demand because of its safety as an investment with turbulent financial markets around the world. It is central banks, mutual fund managers, residents from developing countries and refugees of war who have been fleeing a panicked market in pursuit of gold investments. Therefore while gold is essentially useless because you can’t fuel your car with it or take it to the supermarket, this inanimate rock is seen as a safe haven for investments.

At the beginning of the 21st century gold was seen as a relic, and the gold price was just under $300 an ounce. Since then a change has developed in the gold and silver markets where demand is coming from the jewellery market, and from rural and agricultural demand from India, while in the developed world gold was bought as a supplementary asset and often played a complimentary role in jewellery alongside precious stones.

Despite the agricultural sector in India being relatively poor, 70% of the demand for gold came from this area to fulfil the cheaper side of the jewellery market and as financial security for newlyweds. Since food prices were not increasing, there was more income available to buy gold and in this instance the higher prices did not decrease demand.

In western economies gold made the transition from a cheap component of jewellery to an investment as it was turned into small bars and coins. The demand for gold had become a desire for wealth and a way to protect investments from the unstable money systems. Many institutions have also found they inadvertently invested in gold with the introduction of the gold Exchange Traded Funds which sold shares in gold mining companies to those forbidden from physically owning gold. The holdings of these trust funds places them as the fifth largest gold owners including central banks.

For central banks the pressure from politicians and bankers for a paper only currency with no holdings in gold has seen gold sold off, and sidelined as a form of money, which in turn increases the supply of gold. However, in 2007 the finance industry realised that gold was useful in counteracting the swings in the value of the dollar and Germany was the first nation to refrain from other European countries selling their gold. European banks eventually stopped selling entirely while at the same time China and Russia began buying gold assets at a rate to rival the central bank.

Gold is now recognised as a vital asset to have in reserve and higher gold prices have actually lead to higher demand and more buying. Gold prices, and silver, rise in relation to global financial uncertainty and as a result more and more investors are looking to gold, often for the first time. These investors are not seeking out gold to make a profit but to instead preserve the wealth they have in a safe asset.

The Strength of Gold in the Current Market

The value of gold is currently experiencing record highs of 1400.00 and silver is trading at a 30 year high of 27.50 and although the American dollar is strengthening, financial markets are finally taking notice of the situations in Europe. Germany is expecting bonds holders to carry some if not all of the burden from this point and while that is the intention of bond market, investors are distancing themselves from the debt surrounding a lot of Europe.

Where there is no EU baking, investors in Greece, Ireland and Spain feel they are not being adequately compensated for the risk they are taking with these debts and the spread between Irish bonds and the German bonds which are the benchmark is 550bp which is a new record. This now means it is cheaper to insure Iraqi debt than debt for Ireland.

However, the issue is greater than just the un-saleability of Irish bonds because just as the euro dropped four figures, gold surged ahead, being valued at more than EUR1000 which is almost on par with the all time high of EUR1051.40 which was reached at the height of the Greek financial crisis. The President of the World Bank Robert Zoellick has pointed out that gold needs to be once again used as an international reference point for inflation, deflation and future currency values, and that those countries with gold stores can benefit from these strong prices.

The Strength of Gold in the Future

While it is possible to estimate where the above ground stock levels of gold will be in the future in relation to demand from the fashion and jewellery industry, with more gold being held for monetary purposes its future value can be harder to ascertain. Gold investors will determine the value of their stores based on economic, political and personal factors to help them decide when to sell, and others looking to invest in gold for monetary reasons will use the same factors in their decision.

With such a range of variables dictating the price of gold, and factors which can be as fickle as an emotional urge or a political decision the future gold price is also measured against the US dollar, which is constantly changing, making the future value of gold hard to pin down. The value of the US dollar is dictated by changes in quantity and quality, however, it s true value is linked to the financial and political system which can be just as unpredictable.

If the future value of gold were to be considered for investment purposes, investors should be aware of the risks of short term commodities trading. The success of trading in commodities is dependent on knowing and understanding what others will be doing in the short term and a seemingly good investment can sell at a low.

Instead, investors in gold markets should not be doing so in search of a profit, but instead as a way to add security and stability to their investments when currencies are fluctuating and debt levels are uncertain and rising and a gold bar will be as solid in 20 years as it is right now.

Alban

Alban is a personal finance writer at Home Loan Finder, a home loan comparison website.

Gold, Silver, Platinum…W.T.F.?

Precious Metals

Brad Stafford here in place of Adam Hewison and I have a great new video for you. I’m sure many of you read that title and your mind went in the gutter, but today I’m going to show you a whole new meaning for this acronym and how it applies to gold, silver, and platinum.

These three markets have a lot of volume, government implications, and technicals lining up for potentially great trades. Gold makes a record high, then pulls back. Silver is inching towards an all-time high level and platinum is making people rethink their decision to go with a white gold wedding band.

Where do you stand in these markets and maybe more importantly, where should you stand?

Click here to find out what W.T.F. really stands for and what does it have to do with gold, silver, and platinum?

You’ve got to watch the video to find out.

http://www.ino.com/info/503/CD3336/&dp=0&l=0&campaignid=3

Brad Stafford
Director of Marketing
INO.com & MarketClub

Metals rise as dollar continues to fall

The prices of various metals continue to rise as the dollar falls deeper into the abyss. Well now, if this isn’t a clear sign of massive inflationary pressures, then I don’t know what is. Some experts say the United States economy could even be facing a potential stagflation – that dreaded bogeyman that haunts economists in their darkest dreams.

A tumbling dollar and strong oil prices prompted investors and speculators to buy gold heavily on Tuesday, with the metal hitting a 28-year high and trading about $30 below its record peak.

Platinum advanced to an all-time high of $1,466 an ounce, while silver surged to $15.09, its highest level in 18 months and targeted a 25-year peak of $15.17 hit in May 2006.

High prices sparked sales of gold scrap from Indonesia and Thailand to Singapore, a key centre for bullion trading in Southeast Asia. Physical buyers remained nervous in India, the world’s top gold consumer, ahead of a key festival this week. Spot gold hit a high of $821.30 an ounce, its best level since January 1980 when it set a lifetime high of $850. It was at $820.15/820.85 against $808.80/809.60 late in New York on Monday.

Gold also surged in some other currencies, with the metal quoted in sterling hitting a record high of 391.42 sterling per ounce. It traded at 561.74 euros, just below last year’s all-time high of 569.90 euros.

In other markets, the benchmark contract in Tokyo gold futures rose above the closely watched 3,000 yen per gram level for the first time since July 1984. The most active December US gold contract added $10.8 an ounce to $821.4. Silver was at $15.09/15.13 an ounce from $14.64/14.69 on Monday. Platinum was $1,466/1,471, against $1,459/1,463. Palladium rose $4 to $375/380.

Copper prices bounce: Copper prices bounced on Tuesday but analysts said the metal, used in power and construction, was likely to come under pressure from higher stocks and supplies, as well as falling demand.

Aluminium touched a three-month high and tin hit record highs on growing concerns about supplies. Higher base metal prices and stronger sentiment on equity markets boosted London-listed mining shares such as BHP Billiton , Xstrata and Rio Tinto, which were all up more than 3 percent.

Copper stocks in LME warehouses at around 168,000 tonnes are at their highest since mid April. They are up nearly 30 percent since late September. More physical material also means the cash price is at a $3 discount to the three-month contract.

Aluminium gained to $2,638 a tonne, the highest since August 9 and traded at $2,634 from Monday’s $2,610. Tin hit a record high of $17,100 a tonne on worries about supplies from Indonesia, the world’s second biggest producer after China. It was quoted at $16,950/17,000 from Monday’s last quote at $16,725/16,775.

Nickel was at $31,885/31,890 from $31,600 on Monday, lead was at $3,740/3,750 from $3,695 and zinc was at $2,769/2,770 from $2,725.

Now I think we need to take a break and reflect upon what these numbers are trying to tell us. Did all these metals become more scarce all of a sudden? No, what is clearly happening is that dollar are becoming a lot more abundant. There is no doubt in my mind that precious metals act as an economic health diagnostic tool. When the prices of precious metals relative to national currency are high, then the economy is undoubtedly in a “sick” state. The majority of these financial maladies come as a result of massive money supply inflation carried out by central banks – like the Federal Reserve for example.

That does it for my two gold-backed cents. Cheers everyone, and happy investing.

Sleep tight, and don’t let The Fed Bugs bite! ;)

BullionVault – The best method of gold ownership

You may have seen my numerous post about gold, and gold ownership in general. Call me a “goldbug” if you will but I am one who believes that everyone should own some gold. I’ve researched various method of investing in gold and I’m sure you won’t be surprised when you hear me say that so far in my book BullionVault provides the best service for investing in gold. Before finding out about BullionVault I seriously thought about just buying gold bullion and storing it in a safe somewhere in my house. No doubt having some gold in your pockets for those “hard times” is still a good idea, but if you intend to be a serious investor in precious metals you’ll soon realize that doing it this way is not so wise. Then I thought about just buying gold backed e-currencies and just “hoarding them”, but e-currencies have a series of disadvantages when it comes to purely investing in precious metals. Sure, they’re great if you intend to use the gold & silver as money, but there are serious cost overheads to consider especially since you’ll have to pay hefty “in/out exchange” fees. I then thought about using GoldMoney but their above spot rates are a bit too high for me. BullionVault allows me to buy directly from other members of the gold market and therefore get the best price.

OK, let me cut to the chase and tell you why BullionVault is peerless:

*An inaccessible market becomes accessible*

Gold's spot market is reserved for professionals.

Settlement requires the seller to make delivery in

400 oz bars ($250,000 each) which have never left a

recognised bullion vault. It is hard to find any

professional dealer who will deal under $1,000,000 a

time. Also you must have access to a vault, and

generally they do not open bullion storage facilities

for private individuals.

This is why the private individual has to buy coins

and small bars for private custody. Here the costs

are approximately 6%, insurance is difficult and

expensive, finding buyers who trust you is always

difficult, and shipping overseas in time of crisis

is impossible. These are reasons why the retail

gold market has stayed small.

BullionVault acts as a bridge into the professional

marketplace - allowing private buyers to benefit from

spot market pricing, professional domestic and offshore

storage, and dealing in their own currency. Typical

overall dealing costs are down from 6% to about 0.9%

(a little more for sub $30,000 and a lot less for

more than $30,000).


*Safety*

A string of innovations has made BullionVault

exceptionally secure. Not only is the gold's purity

guaranteed, but it is stored in some of the world's

most secure vaults - with insurance included - as

your direct personal property. There are burglar

alarms on user's accounts, a published Daily Audit,

and a guarantee that your money can only be returned

to you.

*Accessibility*
You can buy and sell 24 hours a day.

You have immediate access to your money which can be

wired back to the original funding bank account on

the day you choose to sell. There is a normal banking

fee for a same day or international wire (usually about

$20) or you can choose a three day transfer which is

free.

*Choice of Vaults*
Very many users say how much they appreciate a

geographical choice of vaults, and the ability to

switch storage location quickly – by selling in one

location and buying immediately in another. This sort

of ability to quickly move physical wealth across

borders by instantly settled trading, rather than by

shipping, is very highly valued.

*Trust Deeds and Law*
Most gold ownership mechanisms are based on trust

deeds, which vest ownership of the gold in the trust,

and make the investor a beneficiary under the trust.

Trust deeds tend to be long and complicated documents

and they are prone to legal challenge.

BullionVault does not use a trust deed. The client

enjoys direct personal ownership of gold, which is

an exceptionally reliable ownership right.

*Storage Charges*
Subject to the minimum of $4 per month BullionVault

storage charges are 0.12% per annum, which is almost

the wholesale rate [0.1%]. This compares with costs

of 1.5% for gold stored in the Allocated Accounts

of bullion banks.

*Audit Trail*
BullionVault believes that there are huge cost

advantages to retail customers in using a collective

mechanism for owning gold. But collective ownership

creates the risk of an undetected record keeping

failure. BullionVault's web publication of its DAILY

AUDIT gives transparency to the records of the

system while still retaining anonymity and allowing

customers reliably to prove their individual

ownership of gold in the pool.

Every business day the sum of the vault and bank

balances is proved to equate exactly to the

thousands of users - not one of which is overdrawn.

Then the proof is openly published on the site.

The DAILY AUDIT sets a new standard in record-keeping

accuracy, and BullionVault both invented the technique

and is the only gold storage business in the world

to use it.

*Right of sale on main markets*
Under BullionVault Terms and Conditions users have

a right of sale on the local bullion market.

You can only do this on deliverable quantities

(usually large bars), which may be above your planned

personal investment. However the effect is that even

if it is too large for you it makes your gold attractive

to other users who have sufficient gold. Should any

price differential arise other users can be expected

to bid for your smaller amount very nearly to the main

market sale price. The result is an almost direct

link from your smaller holding to the main bullion

market - and the link is maintained by natural market

forces.

You have a right of withdrawal too (albeit admittedly

expensive on small withdrawals because coin supply is

not our primary business).

*Security*
BullionVault has assumed that against the odds

your internet access WILL be compromised, and we

have implemented substantial further safeguards to

guard against such an eventuality so as to still

keep your gold and your money safe…

We only allow money which might be raised on your

BullionVault account (i.e. by selling your gold at

the market price) to be returned to the bank which

originally funded your BullionVault account - i.e.

yours.

It would be inconvenient for you, but not catastrophic

- and because the criminal would not profit there is

little incentive to go to the effort and risk the

consequences of detection.

All mechanisms for authorizing a transfer of money

depend on the presentation by the payee, and to the

paying agent, of some data which is supposed to be

difficult to duplicate [signature, PIN, password,

digital key]. Yet nowadays that data is routinely

entered into computers, which are re-programmable

machines designed to save, process and distribute

accurate copies of data! That's why BullionVault

has been designed with this failsafe mechanism to

ensure it returns your money to you.

*BullionVault's failsafe access provides you with

considerably greater security than is possible from

your bank. Your bank probably has to effect payment

on your behalf to hundreds of different places in

the banking system. It cannot switch them off and

still be useful to you. We on the other hand can

switch them all off, and we are much more secure

for you because of it.*

*Unallocated accounts*
BullionVault is sometimes compared to unallocated

accounts. Unlike BullionVault unallocated gold

accounts are not based on gold ownership but on

gold credit. They provide the investor with no

meaningful protection from default. This critical

fact is too frequently hidden from investors when

they buy gold.

*Summary*
Here is a summary the key advantages of buying

gold through BullionVault.
1. Deal costs are down from 6% for small bar gold

to about 0.9%. On bigger volumes as low as 0.1%.

2. Warranted large bars are high integrity gold.

There is less doubt about the quality of the gold

you own.

3. You can deal in any size you want.

4. Insurance and storage is 0.12% per annum - less

than a tenth of typical Allocated bullion storage

at a bank.

5. You get a choice of international storage

locations, and can switch between them.

6. You can deal directly in Euros and Sterling

- as well as US Dollars

7. Dealing is available all day and every day.

8. Your money can be returned to you in 24 hours.

9. There is no nonsense - you own your gold outright.

It is your legal property.

10. We also greatly reduced the time and complexity

of dealing. With reasonable efficiency at their

banks most of our users are able to buy gold on the

day they first make contact with BullionVault.

*BullionVault has made a big impact on the way

people are buying gold. There are already 25,000

users, $100 million in client holdings, and 1,297kg

of gold added already in 2007. It is now easily the

biggest provider of privately owned bullion in the UK,

and one of the biggest in the world.

*You can learn how to use BullionVault by opening

an account. And because we give you a FREE gram of

gold bullion, you can practice trading on the system.

You can open your account and get your gram of gold here:

http://www.bullionvault.com

If you haven’t got the slightest clue as to why you’d want to invest in gold in the first place then you need to read this report (thanks goes out to David MacGregor for compiling it):
Free Gold Report – In Gold We Trust