How to Buy Gold And Profit

How to buy gold is a question asked by many smart investors who are interested in seeking out options for their portfolio that they know will always stay strong in the market. To learn how to buy gold, one must take the time to understand what types of gold products are out there ready for purchase. Buying gold is not like finding a nice house on the market to invest in. For starters, the real estate market fluctuates so wildly this type of investment may just not be nearly as steady and reliable as an investment in gold. But, also, there are just so many forms of gold and ways to learn about how to buy gold that other investment types just don't have.

To understand how to buy gold, consider what forms are available for buying by the average buyer. Of course there are those pieces that are wearable art forms like necklaces, earrings and other jewelry items, but these types of things are not really what we are talking about when we suggest you learn how to buy gold. The items we think about in terms of gold buying are things like gold bullion products and gold coins. These types of gold items are one of the most profitable ways to invest in the market and figure out how to buy gold for a solid investment. Those other types of gold items are nice and may become cherished heirlooms, but decorative gold pieces are not necessarily as sound an investment as the gold items we are talking about here.

When thinking about how to buy gold, there a couple of main routes to take when scouring the scene for gold bullion products and gold coins to add to your investment portfolio. One path to take is to invest in products that have value not only for their gold quality but also for their age. For instance, some gold bullion products may have been around for centuries and, thus, their value derives not only from the gold but also from their age. Another path to take when learning how to buy gold is to consider the mass produced quality of the piece. It goes without saying that a gold item of which there are few known pieces will garner the greater value.

Public Gold On TV1 News 17/01/2010 7.00am

Gold is the Decade's Best

The decade that ends Thursday is on track to be the worst in recorded history for the U.S. stock market – worse than all of the many boom-and-bust cycles of the 19th century, worse than the Great Depression-era 1930s, worse than the recession-plagued 1970s.

The S&P 500 opened the decade at 1,469.25 on January 3, 2000. When the market closed on Christmas Eve, the S&P 500 stood at 1,125.46 – with four trading days left in the decade, the index’s annual performance over that span is negative 2.6 percent. The Dow Jones Industrials has lost about 1 percent per year over the same period, and the Nasdaq Composite is down a whopping 5.9 percent annually. When adjusted for inflation, the 10-year returns for these indices are even lower.

Meanwhile, what about gold?

The chart above from Bloomberg tells the story – a $100 investment in gold when the market opened on January 3, 2000, was worth about $380 as of this week (data through December 21) – that’s a total return of 280 percent and an annualized return of 14.3 percent. Gold stocks (as measured by the XAU Index) have also had a good decade, climbing 9.4 percent annually.

Commodities (as measured by the S&P GSCI Enhanced Total Return Index) posted average gains of 13.6 percent per year over the period, driven mostly by rapid economic growth in Asia and elsewhere in the developing world.

There are many commentators out there who see no value in gold and who denounce it as an investment at every opportunity. They are certainly entitled to their opinions, but it’s hard to argue with the numbers over the past 10 years – investors on average would have been better off with a gold allocation than having no exposure.

We consider gold a legitimate asset class, and for that reason, we consistently suggest that investors consider a maximum 10 percent allocation to gold-related assets – half in bullion or bullion ETFs and the other half in gold equities – and that they rebalance each year to capture the swings.

What the next decade will bring for gold? Who knows. But we do know one thing – those who held gold for the past 10 years will have a happier New Year than those who listened to the perma-skeptics.


by Frank Holmes
CEO and Chief Investment Officer
U.S. Global Investors, Inc.

Gold tumbles as dollar surges after positive data

By Moming Zhou & Polya Lesova, MarketWatch

NEW YORK (MarketWatch) -- Gold futures tumbled 4% Friday, sustaining their first major loss in a run that began early in November, as the U.S. dollar rose sharply after an upbeat U.S. jobs report.

On the Comex division of the New York Mercantile Exchange, gold for December delivery fell $48.60 to end at $1,168.80 an ounce.

Friday's losses erased gold's weekly gain. The benchmark contract ended the week down 0.5%, falling for the first week in the past five.

The dollar advanced after the Labor Department reported the U.S. labor market improved markedly in November, with the unemployment rate falling back to 10%.

Gold has tended to fall when the dollar rises, as the greenback's weakness gives investors more reason to buy hard assets as an currency alternative that will hold value when paper currencies depreciate. Read more on dollar's jump.

"The pullback is related to the dollar reaction to the jobs data," said James Steel, gold analyst at HSBC in New York.

"The euro/dollar has fallen back below $1.50, which is a rather important level," Steel said. "It has reduced the near-term currency hedge buying in the gold market."
Job Losses Slow, Employment Outlook Turning

The U.S. economy lost the fewest jobs since December 2007 in November and the unemployment report dropped to 10%. The report suggests recessions's worst job losses may be in the past. (Dec. 4)

The Labor Department also reported that nonfarm payrolls dropped by a seasonally adjusted 11,000 in November, the fewest since December 2007. Read more on November employment.

The report was much better than expected by economists surveyed by MarketWatch, who were looking for 100,000 fewer jobs and a steady 10.2% unemployment rate.

Gold $5000+

Papua New Guinea gold mine declares increased reserves

[By Eric Tapakau] Lihir Gold Ltd-operated mine Lihir now has one of the largest and richest gold deposits in the world with its reserve increased by 36 per cent to 28.8 million ounces.

This of course is great news for PNG, as it means the Lihir Island operation will continue producing for many more years to come, while generating wealth for the PNG economy and Lihir community.

Managing director Arthur Hood said the increase in the reserves inventory was through expansion and refinement of the proposed pit shell and a rise in the long-term gold price assumption from 675 US dollars per ounce to 800 per ounce. He said the increase in gold ounces was also due to adjustments to cost assumptions of mining and processing costs offset by the cost benefits from the million-ounce plant upgrade project on Lihir Island, currently under construction, and depletion by mining to 30 June this year.

"This outstanding increase in reserves we are announcing is a reflection of the true world-class quality of the Lihir Island ore body, and leads directly to an increase in the value of the project for all LGL shareholders," Mr Hood said. "It also confirms the benefits of the initiatives that have been put in place over the past few years to lift production at Lihir Island and improve the economics of the project."

Mr Hood said strong production performance, rising cashflows, a solid financial position and positive outlook for the future have enabled Lihir Gold Ltd (LGL) to commence payment of dividends to shareholders. [passage omitted]

Source: Papua New Guinea Post-Courier website, Port Moresby, in English 1 Nov 09

BBC Mon AS1 AsPol pjt


BBC Monitoring. Copyright BBC.

Gold Prices to benefit from weaker dollar 'for the next quarter' - Bullion Vault

Gold Prices to benefit from weaker dollar 'for the next quarter'

- Friday 30th October 2009



A prominent analyst suggested today (October 29th) that physical Gold Investment positions are beginning to build up over fears about the dollar, Reuters reports.

Since passing the $1,000-per-ounce mark recently, market commentators have been divided on which direction the yellow metal's next significant move will be in.

Walter de Wet, from Standard Bank, which is the largest bank in Africa, explained that he is expecting further gains because the greenback looks set to struggle for the next three months.

He told the news provider: "We have some decent interest in the physical side. We see some base-building going on.

"Our view is that we are going to see a general trend for dollar weakness in the next quarter."

Those comments were strongly echoed last week by ScotiaMocatta, which is the precious metals division of the Bank of Nova Scotia - the third-largest bank in Canada.

In a note viewed by Reuters, the group predicted that gold prices could easily reach as high as $1,400 per ounce over the course of the next 12 months.

"Gold is going through a very interesting time, but there are a multitude of factors influencing the price, some of which are quite contradictory, such as the presence of deflation and the fear of inflation," read one section.

"We also have an uneasy feeling that after the near catastrophic events seen over the past 12 months, the sharp recovery seen since March seems too good to be true, and for that reason it probably is."

Source: http://goldnews.bullionvault.com/Goldbug/gold_price/gold_prices_to_benefit_from_weaker_dollar_for_the_next_quarter_19434596