Global Reasons Why the Gold Trend is Your Friend By Anna P Best
At last the world monetary forces are beginning to accept the inevitable. Gold will continue to rise.
1. China is buying. And that is not only government and Central Bank purchases. The Chinese are being told to invest in gold and silver as a means of securing their future. 2. India has purchased 200 tonnes of gold from the IMF and is rumoured to be purchasing another 200. 3. Russia has indicated it will substantially increase its gold reserves. It has purchased 15 tonnes already this year and we understand, want to add another 30 tonnes by the year end. 4. Smaller nations - Sri Lanka, Singapore, Malaysia - are taking the lead of their large neighbours
These new economies account for most of the increase in foreign currency reserves in the last 5 years. Their reserves are predominately in US Dollars, not the world's favorite currency right now. The emerging economies need to protect their new-found wealth, and holding onto US Dollars does not seem the most secure method of protecting their future.
China and India are increasingly uncomfortable with this position, are not happy with the western fiat currencies, which are not underpinned by any guarantees, and wish to replace them with something more solid and more durable - gold and commodities. China has been using its reserves to buy mines in Africa, South America and Eastern Europe for some years now but now they are really on a gold buying spree. But to buy all the gold needed to increase their share of reserves to anywhere close to the western levels, there may not be enough gold being mined. Can you imagine what will happen to the price of gold when the collective force of gold buyers realizes there just isn't enough out there to satisfy the demand? Now thats what leads to manic buying.
And are the developed economies still buying? Yes. The Central Banks are net purchasers of gold, new gold bullion hedge funds are opening, the general public who may never have owned an ounce of gold, apart from their wedding ring, are now inspecting gold depositories to store their newly acquired gold eagles, gold bars, and silver bullion. These investors understand what the actions of China and India have been telling us for years - the US Dollar is under threat and the only way to preserve value is to have your own little gold hoard.
If you are already a gold investor now is not the time to take profits. Hang on there even though the volatility can be really unnerving. Last week gold dropped $50 in one day and came back up again. Even nimble-fingered traders would have difficulty keeping up with it.
And if you are still undecided on what form of gold to invest in, we should warn you that again the rumor is surfacing that gold and silver are in short supply. Owners of forward contracts are increasingly wanting delivery in bullion rather than rolling over contracts. We understand deliveries are slow, or even that the buyer is being offered a premium to accept cash rather than bullion. This brings us back to the safety of ETFs backed by precious metals. If a shortage of the metal becomes apparent, the ETF concerned could be discounted against the metal. Beware.
If you want to know how to invest safely in gold check our Gold Report. Anna P. Best was based in Singapore for many years where she developed her interest in precious metals. Currently the Asian economies are leading the run on gold which is not exactly unexpected. Until recently Gold has not been an area the average investor would consider, but that has changed and suddenly there are so many opportunities out there to profit from gold and silver. Anna enjoys sharing her knowledge with other enthusiasts. She has prepared a complimentary report packed with facts which you can download at Gold Report
Back in the Money Again - Gold Mining in 2010 By Lance Winslow
Many of the gold mines in the world had closed, but now the gold prices are up at $1100 an ounce, and countries like China and India are buying gold in record amounts. So, we should see the gold mines of the world digging up all they can find. There're quite a few methods for mining gold, some include breaking up the rocks, with giant machines that shred and crush pure rock into nothing more than powder, and then sift the gold out, but this takes a lot of energy and unless the gold prices are extremely robust, and the concentration of gold is very large, things don't always work out the way they should, and a gold mine cannot remain profitable.
Occasionally, a gold mine will find a huge vein of gold, and they will dig it up, and by doing this, they don't have to do very much crushing at all. Of course, this doesn't happen very much, but there are places in the world where gold deposits, and gold veins are common. There are also new methods of mining the seafloor, and there are places in the ocean at depth where the concentration of gold in the rock and sediment is 1% or more, which is hardly ever found on land, unless the mining company hit a vein of gold.
Some of the companies that plan to mine the bottom of the ocean, prefer that method, as they leave the waste product, on the bottom of the ocean, and there are no environmentalists down there to complain about what they are doing. And the companies that do this type of mining state that there is no pollution, because they only bring up what they need and they let everything else settled back in place, while they process the gold on the actual ship, returning what's left over back to the seafloor.
Either way, the gold mines are back in the Money Again in 2010.
Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes in raw materials and resources.
