Investors got a new reason to consider investing in dealer gold this week from the U.S. Congress, which appears unlikely to take steps in the short term to deal with a rising national debt that has alarmed many economic experts.
Various media outlets are reporting that President Barack Obama is set to propose a three-year freeze in the growth of spending for many federal programs. However, on Tuesday he suffered a setback when a proposal for a bipartisan task force to try to reduce the deficit fell short of the 60 votes it needed for approval.
The proposed task force would have convened after the November elections to try to shield members from cost-cutting decisions that would have proven to be politically unpopular.
With efforts to reign in a deficit that now exceeds $1 trillion and a national debt that stands at more than $12 trillion, there is concern in many financial quarters that the costs of financing this debt alone will prove unsustainable in the long run, causing serious damage for the dollar's stability.
With this in mind, investing in gold and other precious metals can be a useful option when it comes to navigating any future economic uncertainty that may emerge.
Friday, January 29, 2010
Wednesday, January 27, 2010
Gold, equities top inflation hedges in Asia: Survey
Gold could increasingly be investors' top hedge against mounting inflationary pressures in Asia, a regional survey showed on Wednesday.
With economic growth in Asia expected to lead the world again in 2010, 45 percent of investors in the region's markets outside of Japan picked the precious metal as their most favoured tool to protect their returns from inflation, while 42 percent chose equities, according to a quarterly survey from ING.
In the final quarter of 2009, gold was still only the fourth-favourite choice among investors, even though the percentage of investors expecting a rise in inflation in 2010 climbed 6 percentage points to 77 percent, suggesting there is room for gold to rise.
"It's a perfectly rational response if you think inflation is going to pick up to shift more of your portfolio to commodities and gold. That has traditionally been the smart thing to do," said Paul Klug, regional general manager of ING Investment Management Asia Pacific.
The ING Investor Dashboard survey polled 3,700 high net worth investors in December.
Inflation expectations for 2010 showed the biggest quarterly rise in Thailand, with the share of investors expecting prices to climb more quickly nearly doubling to 85 percent. India was next, with 86 percent of those canvassed expecting inflation to accelerate, up 28 percentage points.
China remained among the countries with the highest proportion of investors predicting more price pressures this year, edging up 5 points to 87 percent in the fourth quarter.
Investors around the world have been reducing their exposure to risky assets and currencies after rampant lending in China spurred Beijing to tighten monetary conditions to prevent excess cash in the economy from fuelling inflation and asset bubbles.
So far in January, the MSCI index of Asia stocks outside Japan is down 5 percent and gold in the spot market is up 0.5 percent .
The investors in the survey remained very confident stock and real estate markets will hold ground in the first quarter of 2010. In Asia ex-Japan, 83 percent expect stocks to either stay near current levels or rise, and 86 percent see residential real estate prices steady or climbing.
"We're still very early in the recovery," said Klug.
"There's demand that is justified and I don't think we have reached a point where there is too much money chasing too few investment opportunities."
The survey's sentiment index for Asia ex-Japan rose for a fourth consecutive quarter to 147, up 101 percent on the year.
Source: Economic Times
With economic growth in Asia expected to lead the world again in 2010, 45 percent of investors in the region's markets outside of Japan picked the precious metal as their most favoured tool to protect their returns from inflation, while 42 percent chose equities, according to a quarterly survey from ING.
In the final quarter of 2009, gold was still only the fourth-favourite choice among investors, even though the percentage of investors expecting a rise in inflation in 2010 climbed 6 percentage points to 77 percent, suggesting there is room for gold to rise.
"It's a perfectly rational response if you think inflation is going to pick up to shift more of your portfolio to commodities and gold. That has traditionally been the smart thing to do," said Paul Klug, regional general manager of ING Investment Management Asia Pacific.
The ING Investor Dashboard survey polled 3,700 high net worth investors in December.
Inflation expectations for 2010 showed the biggest quarterly rise in Thailand, with the share of investors expecting prices to climb more quickly nearly doubling to 85 percent. India was next, with 86 percent of those canvassed expecting inflation to accelerate, up 28 percentage points.
China remained among the countries with the highest proportion of investors predicting more price pressures this year, edging up 5 points to 87 percent in the fourth quarter.
Investors around the world have been reducing their exposure to risky assets and currencies after rampant lending in China spurred Beijing to tighten monetary conditions to prevent excess cash in the economy from fuelling inflation and asset bubbles.
So far in January, the MSCI index of Asia stocks outside Japan is down 5 percent and gold in the spot market is up 0.5 percent .
The investors in the survey remained very confident stock and real estate markets will hold ground in the first quarter of 2010. In Asia ex-Japan, 83 percent expect stocks to either stay near current levels or rise, and 86 percent see residential real estate prices steady or climbing.
"We're still very early in the recovery," said Klug.
"There's demand that is justified and I don't think we have reached a point where there is too much money chasing too few investment opportunities."
The survey's sentiment index for Asia ex-Japan rose for a fourth consecutive quarter to 147, up 101 percent on the year.
Source: Economic Times
Tuesday, January 26, 2010
Gold dealers anticipate ongoing strength in market
Gold prices have settled somewhat in recent weeks, potentially providing investors with new opportunities to set themselves up to take advantage of longer-term price gains.
A report from Bloomberg News notes that gold prices had remained relatively unchanged in London during Friday's trading, while platinum and palladium prices had fallen somewhat.
The financial news provider quoted Afshin Nabavi of MKS Finance SA in Geneva as saying that "the physical market thinks these prices are fantastic to buy at," while adding that "the dollar is also a little bit lower."
One reason why the dollar has fallen somewhat this week is concern in the financial sector over new proposals by the Obama administration that would place new regulations on banks in response to the problems that plagued Wall Street earlier in the recession.
The strength of the dollar is often a factor to consider when gauging the potential for gold investments. However, gold and other precious metals have also been showing more signs of strength in recent months regardless of what the dollar does.
News brought to you by Gold101.com
A report from Bloomberg News notes that gold prices had remained relatively unchanged in London during Friday's trading, while platinum and palladium prices had fallen somewhat.
The financial news provider quoted Afshin Nabavi of MKS Finance SA in Geneva as saying that "the physical market thinks these prices are fantastic to buy at," while adding that "the dollar is also a little bit lower."
One reason why the dollar has fallen somewhat this week is concern in the financial sector over new proposals by the Obama administration that would place new regulations on banks in response to the problems that plagued Wall Street earlier in the recession.
The strength of the dollar is often a factor to consider when gauging the potential for gold investments. However, gold and other precious metals have also been showing more signs of strength in recent months regardless of what the dollar does.
News brought to you by Gold101.com
Tuesday, January 19, 2010
Gold forecast to hit $1,350 per ounce
A leading investment institution is predicting that gold dealers will continue to see strength in their sector in the coming year, despite concern about some pending economic factors.
The UK's Telegraph newspaper quoted a report from Goldman Sachs economists as predicting that the price of gold will reach $1,350 per ounce a year from now, based on the expectation that the Federal Reserve will not raise short-term interest rate targets either this year or next.
"We continue to expect that the resulting low real interest rate environment will continue to support gold prices," the newspaper quoted the report as saying, going on to note that last week, gold prices stood at about $1,139 per ounce and that investors will also be able to benefit from commodities like platinum and palladium in the coming months.
Some economists have warned that the size of the U.S. federal deficit and national debt could undermine the performance of the dollar in the longer term, which could also be a positive sign for gold investments.
Another trend to consider is the economic activity being seen in a number of developing economies, such as China and India, where materials like gold and silver are increasingly in demand for industrial applications and also because of a rapidly growing middle class.
News brought to you by Superior Gold Group
The UK's Telegraph newspaper quoted a report from Goldman Sachs economists as predicting that the price of gold will reach $1,350 per ounce a year from now, based on the expectation that the Federal Reserve will not raise short-term interest rate targets either this year or next.
"We continue to expect that the resulting low real interest rate environment will continue to support gold prices," the newspaper quoted the report as saying, going on to note that last week, gold prices stood at about $1,139 per ounce and that investors will also be able to benefit from commodities like platinum and palladium in the coming months.
Some economists have warned that the size of the U.S. federal deficit and national debt could undermine the performance of the dollar in the longer term, which could also be a positive sign for gold investments.
Another trend to consider is the economic activity being seen in a number of developing economies, such as China and India, where materials like gold and silver are increasingly in demand for industrial applications and also because of a rapidly growing middle class.
News brought to you by Superior Gold Group
Monday, January 18, 2010
Gold steady, seen rising on economic worries
Gold, little changed in London today, may climb as concern about the soundness of Greece's public finances boosts the metal's appeal as a haven. Palladium and platinum rose to the highest prices in at least 17 months.
European finance ministers meet today to discuss Greece's budget deficit. The country's worsening finances last month prompted credit-rating companies to cut its creditworthiness. The US Dollar Index, a six-currency gauge of the greenback's strength, fell as much as 0.3 per cent today. Gold typically moves inversely to the dollar.
``The market is very concerned about the situation in Greece,'' said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. ``Gold is having speculative interest, rather than real physical demand.''
Gold for immediate delivery added $US2.65, or 0.2 per cent, to $US1,133.57 an ounce at 4:38 p.m. local time, paring a climb of as much as 0.6 per cent. Bullion for February delivery gained 0.3 per cent to $US1,133.50 in electronic trading on the New York Mercantile Exchange's Comex division. Floor trading is closed today for the Martin Luther King Jr. holiday.
The metal declined to $US1,134.50 an ounce in the afternoon ``fixing'' in London, used by some mining companies to sell production, from $US1,135.75 at the morning fixing.
Gartman sees `upside'
``We see the recent consolidation pattern that has evolved since early January between $US1,120 and $US1,160 to be a consolidation that should resolve itself eventually with prices breaking to the upside,'' Dennis Gartman, a Suffolk, Virginia- based economist and hedge-fund manager, told clients in his Gartman Letter today.
Greece on Jan. 15 presented the European Commission with a three-year budget plan that includes deficit-reduction measures for this year to bring down Europe's biggest budget shortfall. The country won't default on its debt or abandon Europe's single currency, Luxembourg's Jean-Claude Juncker, who heads the group of euro-area finance ministers, said that day.
The US dollar index has slipped 1 per cent this year after a 4.2 per cent drop in 2009. The currency slumped last year as the Federal Reserve held interest rates near zero to revive the US economy and investors favored higher-yielding currencies and assets on expectations of a recovery from the world recession.
``Silver and gold are currently mainly driven by investment demand, and thus react more sensitively to changes in the dollar,'' Stefan Graber, an analyst at Credit Suisse Group AG, wrote in a note today.
SPDR Holdings
Bullion held by the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, fell for a second day, slipping 0.91 metric ton to 1,112.84 tons on Jan. 15, according to the company's Web site.
Palladium rose for a fourth day, heading for the longest rally since Nov. 16, 2009. The metal for immediate delivery climbed as much as 1.1 per cent to $US460.02 an ounce, the highest price since July 2008, and was last at $US458.50. Platinum added as much as 1.8 per cent to a 17-month high of $US1,628.50 an ounce and last traded at $US1,623.75. Both metals are used in catalytic converters that curb pollution from vehicles.
``Platinum and palladium are more closely linked to the business cycle than gold and silver, due to their heavy use in the car industry,'' Graber said. ``Given that we expect a continued recovery in global economic activity, we still think that platinum and palladium are likely to continue outperforming gold and silver over coming months.''
Palladium held in ETF Securities Ltd.'s exchange-traded commodities products rose 2.6 per cent to a record 679,938 ounces on Jan. 15, according to the company's Web site. Silver holdings added 226 ounces to a record 24.334 million ounces.
Silver for immediate delivery in London gained 1.1 per cent to $US18.615 an ounce.
Source: Sydney Morning Herald
European finance ministers meet today to discuss Greece's budget deficit. The country's worsening finances last month prompted credit-rating companies to cut its creditworthiness. The US Dollar Index, a six-currency gauge of the greenback's strength, fell as much as 0.3 per cent today. Gold typically moves inversely to the dollar.
``The market is very concerned about the situation in Greece,'' said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. ``Gold is having speculative interest, rather than real physical demand.''
Gold for immediate delivery added $US2.65, or 0.2 per cent, to $US1,133.57 an ounce at 4:38 p.m. local time, paring a climb of as much as 0.6 per cent. Bullion for February delivery gained 0.3 per cent to $US1,133.50 in electronic trading on the New York Mercantile Exchange's Comex division. Floor trading is closed today for the Martin Luther King Jr. holiday.
The metal declined to $US1,134.50 an ounce in the afternoon ``fixing'' in London, used by some mining companies to sell production, from $US1,135.75 at the morning fixing.
Gartman sees `upside'
``We see the recent consolidation pattern that has evolved since early January between $US1,120 and $US1,160 to be a consolidation that should resolve itself eventually with prices breaking to the upside,'' Dennis Gartman, a Suffolk, Virginia- based economist and hedge-fund manager, told clients in his Gartman Letter today.
Greece on Jan. 15 presented the European Commission with a three-year budget plan that includes deficit-reduction measures for this year to bring down Europe's biggest budget shortfall. The country won't default on its debt or abandon Europe's single currency, Luxembourg's Jean-Claude Juncker, who heads the group of euro-area finance ministers, said that day.
The US dollar index has slipped 1 per cent this year after a 4.2 per cent drop in 2009. The currency slumped last year as the Federal Reserve held interest rates near zero to revive the US economy and investors favored higher-yielding currencies and assets on expectations of a recovery from the world recession.
``Silver and gold are currently mainly driven by investment demand, and thus react more sensitively to changes in the dollar,'' Stefan Graber, an analyst at Credit Suisse Group AG, wrote in a note today.
SPDR Holdings
Bullion held by the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, fell for a second day, slipping 0.91 metric ton to 1,112.84 tons on Jan. 15, according to the company's Web site.
Palladium rose for a fourth day, heading for the longest rally since Nov. 16, 2009. The metal for immediate delivery climbed as much as 1.1 per cent to $US460.02 an ounce, the highest price since July 2008, and was last at $US458.50. Platinum added as much as 1.8 per cent to a 17-month high of $US1,628.50 an ounce and last traded at $US1,623.75. Both metals are used in catalytic converters that curb pollution from vehicles.
``Platinum and palladium are more closely linked to the business cycle than gold and silver, due to their heavy use in the car industry,'' Graber said. ``Given that we expect a continued recovery in global economic activity, we still think that platinum and palladium are likely to continue outperforming gold and silver over coming months.''
Palladium held in ETF Securities Ltd.'s exchange-traded commodities products rose 2.6 per cent to a record 679,938 ounces on Jan. 15, according to the company's Web site. Silver holdings added 226 ounces to a record 24.334 million ounces.
Silver for immediate delivery in London gained 1.1 per cent to $US18.615 an ounce.
Source: Sydney Morning Herald
Sunday, January 17, 2010
In Currency Markets, Back Commodities Plays
Boosted by growth in China and other emerging markets, commodity-backed currencies look set to outshine the dollar and euro in the near term.
The challenges evident in the U.S. labor market and real-estate sector have sapped December's optimism over a rapid U.S. economic recovery. The rebound isn't taking hold fast enough to convince investors that the Federal Reserve will raise interest rates soon, leaving the dollar to languish under ultralow rates, intended to stimulate the economy, that making it unappealing as an investment currency. The euro is weighed down by concerns about the stability of the financial systems of someeuro-zone members.
The currencies of the commodity-exporting economies of Australia, Canada and New Zealand stand to benefit the most from improving global conditions. These three currencies are often called the dollar bloc as they tend to advance or retreat in unison.
"The kind of countries we're investing in tend to play into a global recovery story," and emerging-market and commodity-backed countries are most attractive, said Geoffrey Pazzanese, co-manager of Federated Investors Inc.'s $710 million Intercontinental Fund.
Late Friday in New York, the euro was at $1.4379, down from $1.4499 late Thursday. The dollar was at 90.83 yen from 91.10 yen, while the euro was at 130.54 yen from 132.09 yen. The U.K. pound fell to $1.6259 from $1.6324, and the dollar firmed to 1.0267 Swiss francs from 1.0188 francs.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 77.222, from 76.729 on Thursday.
The euro this week should trade between $1.4370 and $1.4620, analysts said. The dollar should trade between 90.60 yen and 93.80 yen.
Despite a hiccup as fiscal concerns within the euro zone and a possible increased tightening in Chinese fiscal policy swept the market on Friday, the dollar-bloc currencies will outperform their competitors in the near term, analysts said.
As the global recovery picked up steam at the end of 2009, Investec Asset Management in London sold some investments in dollar-bloc currencies to take profits on positions that had run up big gains, said Thanos Papasavvas, head of currency management for the firm.
"We've put some of that risk back on," buying into the commodity-backed currencies in 2010, "because the overall environment is quite positive," said Mr. Papasavvas, whose firm manages more than $60 billion.
Dollar-bloc currencies should benefit from Thursday's release of fourth-quarter Chinese gross domestic product, which is expected to have grown 10.8% from the year-earlier quarter, according to a Dow Jones Newswires survey of economists.
Even if China continues on its path to slowly tighten fiscal policy, strong growth in emerging markets should keep demand stoked for commodities, helping prop the dollar-bloc currencies, said Robert Lynch, currency strategist at HSBC in New YorkThe Australian dollar hit a nearly two-month high against the U.S. dollar Thursday, while the Canadian dollar soared to a three-month high. Both slipped a bit Friday, but are expected to rebound.
The Australian dollar this week should trade around $0.9093 to $0.9330, while the U.S. dollar should trade around C$1.0200 to $C1.0420, analysts said. Late Friday in New York, the Australian dollar was at $0.9236, while the U.S. dollar was at C$1.0295.
"We're quite confident that the commodity currencies are going to have pretty well-supported levels," Mr. Papasavvas said. "Even if they don't rally against the [U.S.] dollar dramatically, we would expect them to appreciate."
For much of 2009, the euro would gain when the global economic picture brightened and investors decided to buy riskier assets, but that relationship has broken down so far this year. The currency will sag under the weight of fiscal worries in the euro zone, especially concerns about how Greece will reduce its outsized deficit, analysts said.
"The euro is a major currency that's just a baby, and is still going to be going through growing pains," said Jonathan E. Lewis, founding principal of Samson Capital Advisors, which has $6.5 billion under management and is slightly overweight in commodity-backed currencies.
"That doesn't mean it's not going to grow to be a fine currency when it gets to maturity, but it's not far from entering those difficult teenage years," he said.
Source: Wall Street Journal
Commodities to drive investments growth
Commodities-driven investments from China, Korea and the Middle East countries are going to fuel a conservative 10 percent investments growth in the country this year, the Board of Investments said.
Trade and Industry Undersecretary and BoI Managing Head Elmer C. Hernandez said that huge commodities (metals and agriculture) projects are expected to come in the first semester this year.
“Investments are coming in 2010. What I am aware of is 60 percent of those that we talked to in the Middle East are coming in with business delegation to look closely into their investment plans here,” Hernandez said.
Hernandez, who went to the Middle East countries late last year to promote investments, is working on a program for the upcoming visit of Middle East businessmen.
According to Hernandez, the investment promotions the BoI conducted in July last year in China and Korea are just starting to bear fruit. The Korean private sector led by the ASEAN Korean Center has recently sent a 15-man delegation with interest in various sectors from mining, manufacturing, IT, and construction.
The Chinese just paid a visit with a delegation from the Hangzhou Wahaha Group Co. Ltd., the leading beverage producer in China, which has keen interest in establishing an integrated fruit juice processing plant in the country for the Chinese market.
Wahaha has roughly 70 subsidiary companies and 40 manufacturing centers scattered throughout China. Wahaha employs about 20,000 workers. It is headquartered in Hangzhou, Zhejiang province.
“Both the Chinese and Korean groups are doing due diligence work,” Hernandez said.
Source: Manila Bulletin
Saturday, January 16, 2010
Why commodities move the way they do
If we were to pick two words to describe the gist of Jim Rogers book Hot Commodities, it has to be demand and supply.
His explanation for ‘commodities' as an investment, rings a very simple tone that should resonate with any investor looking for an answer as to why his investments move the way they do.
The book is sprinkled with several historical anecdotes and simple intros to the modus operandi of a variety of industries including oil, gold, coffee and sugar.
The book also provides a glimpse into Mr Rogers' thought-process, one which has made him one of the world's most recognised commodities investors.
Jim Rogers is famous for co-founding the Quantum Fund with George Soros.
The fund racked up a index-whopping 4,200 per cent gain in the 1970s at the end of which he retired and focussed on his commodity holdings and travelling, the latter arguably providing an edge in his early insights into several markets such as China and India.
Rogers has dipped into politics, geology, economics, psychology and history, among other disciplines, to giving a well-rounded, albeit sometimes polarised, view on why commodities move the way they do. Here is a summary of what Rogers says:
If stock investors may have to pore over ratios that are numerous enough to fill a dictionary, commodity investors too have to understand numbers. Like the equity markets, a variety of opinions go into arriving at a market price, providing considerable scope for mis-pricing due to pessimism or optimism.
Unlike equity markets, however, the data pertaining to commodities isn't easy to manipulate. Once understood, commodities as an asset class are no riskier than stocks.
DEMAND AND SUPPLY
The range of commodities and the complexity of the contracts one trades them with can be astounding. Ranging from various grades of iron ore to varieties of crude oil and dairy products, commodity contracts could virtually cover everything we consume.
Figuring out the moorings of demand and supply are crucial to avoid being carried away by the bull and bear price runs of commodities, which can be protracted and painful on the wallet. The dot-com equity bull market of the late 1990s also marked historic lows for a variety of commodities, including oil and gold. However, Rogers made an early call that commodities were poised for a bull market.
By simply linking the fact that no major oil finds were made over the last 30 years and the rapidly growing demand from Asia, Rogers managed to capitalise on crude oil's big move from the sub-20 dollar prices of late nineties to levels of over 140 dollars in 2008. Lax demand with the sub-prime crisis and the subsequent loss of consumer confidence sent oil plummeting back to the sub-40 levels.
Supply considerations including OPEC, a consortium of oil-producing nations, which adjust production and geo-political factors such as a moody-Venezeulan dictator and unrest in Nigeria have all sent oil riding back close to the current 80 dollar mark. At the end of the day, while politics and trading may shape prices in the short term, the big picture of how much oil is left under the ground, how much time and money it takes to get new capacity up and the race to secure supplies between nations is going to shape long-term returns.
Trends in alternative fuel sources such as tar sands, fuel-cells and renewable energy may also decide the future of the crude oil market.
When Rogers explains to you the expense associated with extracting crude oil from Canadian Tar sands or the sheer inefficiency and controversies surrounding the oil business in regions of the former Soviet Union, you know they are his opinions and there is a chance the scenario could change very quickly. But rest assured, when they do change, having an approach like the one Rogers advocates — having your ears to the ground and your sights on the output numbers — will give you a perspective before news of the price move is actually flashed on a news channel.
Being aware of one Mr King Hubbert's 1956 much ridiculed prediction that the then dominant American oil industry output was set to decline, enables you to cast a critical eye on claims made by several oil-producing nations on how large their reserves are.
Inverse relationships
Rogers' ideas such as inverse relationships between commodity markets and equity markets may not be hard and fast rules. However, they do give you a starting point to figure out links between various companies or commodities which may be poised for good returns.
By digging into the science of commodities much like the fundamentals of business, you gain an edge over the person fixating on the price or trying to outguess a trader's next move. By giving a good argument for the term investing in commodities instead of the more popular ‘trading' or ‘speculating' in commodities, Jim Rogers gives you a framework to tilt the odds of a commodities bet in your favour.
China helps fuel surge in commodities markets
Signs of an improving economy in China may be one more reason for gold and silver investors to continue adding to their holdings.
A report in the Christian Science Monitor notes that countries that export raw materials have reason for optimism in light of December's statistics showing that Chinese exports rose 18 percent on a year-over-year basis after 13 previous months of decline. The newspaper added that Chinese imports rose in December by a 56 percent margin.
"It seems very clear that what we are seeing are basically imports of raw materials and capital goods. These are all investment-related," the newspaper quoted Arthur Kroeber of Dragonomics as saying.
Also this week, various media outlets reported that 2009 statistics had left China as the world's top exporter of manufactured goods, replacing Germany in that category. A report in the Washington Post noted that later this year, China is also expected to overtake Japan as the world's second-largest economy.
The Post also noted that part of China's surge in commodities buying has been fueled by its various infrastructure projects brought on by its economic stimulus programs.
News brought to you by Superior Gold Group – expert gold dealers offering precious metals products & gold investment coins.
A report in the Christian Science Monitor notes that countries that export raw materials have reason for optimism in light of December's statistics showing that Chinese exports rose 18 percent on a year-over-year basis after 13 previous months of decline. The newspaper added that Chinese imports rose in December by a 56 percent margin.
"It seems very clear that what we are seeing are basically imports of raw materials and capital goods. These are all investment-related," the newspaper quoted Arthur Kroeber of Dragonomics as saying.
Also this week, various media outlets reported that 2009 statistics had left China as the world's top exporter of manufactured goods, replacing Germany in that category. A report in the Washington Post noted that later this year, China is also expected to overtake Japan as the world's second-largest economy.
The Post also noted that part of China's surge in commodities buying has been fueled by its various infrastructure projects brought on by its economic stimulus programs.
News brought to you by Superior Gold Group – expert gold dealers offering precious metals products & gold investment coins.
Gold was most lucrative investment of past decade
Gold dealers saw their clients enjoy some of the best investment returns of the past decade, notes a recent report.
According to Bloomberg News, the last 10 years saw investors more than triple their returns, significantly outperforming those who chose to stay in the stock market. Specifically, a $100 gold investment at the start of the decade would have reportedly been worth $380 as it came to a close, while the same investment in the stock market would have lost $10.
"The fear of inflation is in the gold price. Commodities and oil show emerging markets emerging, and the rest is the developed markets submerging," the report quoted Toby Nangle of Baring Investment Services as saying.
Stocks were especially hard hit over the past couple of years by a worldwide recession that claimed a number of corporate casualties while undermining overall confidence in the financial system and wiping out billions of dollars in investments.
With the economy recovering, gold remains a strong investment option because instead of just seeing it as a safe alternative to the stock market, it is also now in growing demand for industrial use and other applications in developing nations.
According to Bloomberg News, the last 10 years saw investors more than triple their returns, significantly outperforming those who chose to stay in the stock market. Specifically, a $100 gold investment at the start of the decade would have reportedly been worth $380 as it came to a close, while the same investment in the stock market would have lost $10.
"The fear of inflation is in the gold price. Commodities and oil show emerging markets emerging, and the rest is the developed markets submerging," the report quoted Toby Nangle of Baring Investment Services as saying.
Stocks were especially hard hit over the past couple of years by a worldwide recession that claimed a number of corporate casualties while undermining overall confidence in the financial system and wiping out billions of dollars in investments.
With the economy recovering, gold remains a strong investment option because instead of just seeing it as a safe alternative to the stock market, it is also now in growing demand for industrial use and other applications in developing nations.
Friday, January 15, 2010
Size of federal deficit may be one reason to buy gold coins
One reason why this is widely seen as a good time to buy gold coins is lingering uncertainty about the economy, in part because of concern about the size of the federal deficit and long-term prospects for the dollar.
With that in mind, an article in Reuters cited financial experts who warn that efforts to lower the national debt are essential to avoiding what is described as a "crippling dollar crisis."
The wire service quoted former Congressional Budget Office head Rudolph Penner, who said federal debt reduction "will be done some day" and that it can be done either with "enormous pain" or "more rationally."
The issue is said to be getting more focus at this point, with the Obama administration preparing to release its fiscal 2011 budget in February.
Throughout the recession, the federal government has struggled with the competing tasks of managing its already large debt and trying to stimulate the economy. As the deficit and national debt have grown larger, more investors have been attracted to the security that gold offers.
News brought to you by Superior Gold Group – expert gold dealers offering precious metals products.
With that in mind, an article in Reuters cited financial experts who warn that efforts to lower the national debt are essential to avoiding what is described as a "crippling dollar crisis."
The wire service quoted former Congressional Budget Office head Rudolph Penner, who said federal debt reduction "will be done some day" and that it can be done either with "enormous pain" or "more rationally."
The issue is said to be getting more focus at this point, with the Obama administration preparing to release its fiscal 2011 budget in February.
Throughout the recession, the federal government has struggled with the competing tasks of managing its already large debt and trying to stimulate the economy. As the deficit and national debt have grown larger, more investors have been attracted to the security that gold offers.
News brought to you by Superior Gold Group – expert gold dealers offering precious metals products.
Demand for precious metals unlikely to decline
Silver and gold dealers know that their products in demand because of the many products that require these precious metals, as well as the stable investment opportunity they tend to offer.
For example, a report on the U.S. Geological Survey website helps illustrate why silver is a sound investment, especially with economic activity picking up in developing nations.
According to the USGS, about 1,120 tons of silver with a value of about $570 million was produced in the United States in 2008, with Alaska and Nevada leading the way in overall production. Along with being used in coins, the report noted that silver is used in a wide variety of industrial applications because of its malleability, conductivity and reflectivity.
It is also used in products ranging from catalytic converters to batteries to cell phone covers, and even in photography. In fact, up to 90 tons of silver per year are said to be recovered from photographic wastewater alone. Other applications include using silver for wood treatment to fight mold and for the tiny antennas used in radio frequency identification technology.
As economic activity picks up around the world and as more countries manufacture and purchase products requiring silver, investors will be well-positioned to reap the benefits.
News brought to you by Superior Gold Group – expert gold dealers offering precious metals products
For example, a report on the U.S. Geological Survey website helps illustrate why silver is a sound investment, especially with economic activity picking up in developing nations.
According to the USGS, about 1,120 tons of silver with a value of about $570 million was produced in the United States in 2008, with Alaska and Nevada leading the way in overall production. Along with being used in coins, the report noted that silver is used in a wide variety of industrial applications because of its malleability, conductivity and reflectivity.
It is also used in products ranging from catalytic converters to batteries to cell phone covers, and even in photography. In fact, up to 90 tons of silver per year are said to be recovered from photographic wastewater alone. Other applications include using silver for wood treatment to fight mold and for the tiny antennas used in radio frequency identification technology.
As economic activity picks up around the world and as more countries manufacture and purchase products requiring silver, investors will be well-positioned to reap the benefits.
News brought to you by Superior Gold Group – expert gold dealers offering precious metals products
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