Commodity HQ: Gold Stocks To Play QE3

With QE3 now an announced fact, gold has come back into the spotlight. While the actual historical performance of gold as an inflation hedge is more mixed than some goldbugs realize, the reality is that gold has done pretty well during most prior periods of monetary stimulus. Moreover, with the ongoing uncertainty regarding the economic health and future of Europe, the United States, Japan and China, gold’s demonstrated value as a hedge against uncertainty may also come into play.



Investors have a variety of ways to use gold to enhance or secure the performance of their portfolio. Here are five names to consider.

Please read more here:
http://commodityhq.com/2012/gold-stocks-to-play-qe3/

Commodity HQ: A Deeper Look At Australia's Commodity Industry

One of the wealthiest countries in the world, and the richest in Asia in GDP per capita terms, Australia is an unusual mix of a modern market economy with a large commodities-driven export infrastructure. Despite the influx of wealth created by its natural resources, Australia has never been particularly successful in developing a large manufacturing base. What’s more, the country has run large and persistent current account deficits for over a half-century. Nevertheless, Australia has very significant and efficient mining and agricultural sectors, and ranks highly in the world in many categories.

To read more, please click the link:
http://commodityhq.com/2012/a-deeper-look-at-australias-commodity-industry/

FinancialEdge: Should You Follow Soros Out Of Gold?

Investors can't seem to get enough of stories talking about what this or that famous investor is doing with his or her portfolio. In the latest example, news that George Soros has liquidated his gold holdings has some investors and commentators wondering whether the markets are looking at the end of an impressive run in gold. Whether Soros is right or wrong with this latest move, investors ought to consider some of the reasons to reject or copy his move.

Less-Legitimate Reasons to Copy Soros 

Playing a Different Game 

Simply put, investors like Soros, Paulson, Gartman and the like are playing a different game than you or me. In many cases, the funds run by famous hedge fund managers are leveraged up the hilt, and have relatively inconsequential trading costs. What that means is that fund managers can sell on Monday, buy on Wednesday, sell again on Friday and make money all along the way. That's something that the average investor cannot do. Playing an anticipated 2% move makes sense in an environment of minimal taxation, minimal transaction costs and massive leverage. For the regular investor, it's a sure way to get poor quickly.

Read the full text here:
http://financialedge.investopedia.com/financial-edge/0911/Should-You-Follow-Soros-Out-Of-Gold.aspx#axzz1YOY6xEze

Investopedia: Central Banks Take Another Kick At The Can

Investors who believe that markets work best when governments stay as far away as possible are likely grinding their teeth again. In response to widespread rumors that major European banks are finding dollar-denominated sources of liquidity dry up, most of the Western world's central banks have decided to step in and address the matter. While this will certainly move the markets in the short run, central banks do not have an indefinite supply of fingers to plug the seemingly endlessly leaky dyke that is the European financial system.

The Latest Effort  
With Greece still apparently on an express lane to default, and fears of knock-on effects in countries like Portugal and Italy, investors have started to approach many European banks (particularly French and German banks) from the viewpoint that much of their balance sheet is about to go up in smoke. Accordingly, there are fewer and fewer willing lending partners in the market and many banks have reportedly found it difficult to get the dollar-denominated financing that they need.


Read more below:
http://stocks.investopedia.com/stock-analysis/2011/Central-Banks-Take-Another-Kick-At-The-Can-STD-BCS-UBS-SPY-IEF-GLD-GE0920.aspx

FinancialEdge: How Much Disaster Can Gold Hedge?

Lying somewhere between meme and cliché is the idea that when the going gets tough, the smart buy gold. Gold has had a special hold on the minds of many investors for centuries, if not millennia, offering the promise of being the one asset that will never go to zero, and the one medium of exchange that other people will always accept in trade. While these notions are basically true, investors would do well to consider just how much disaster they can really hedge by buying gold.

Forget Inflation 

Whenever it is time to debate the merits of gold, it is only a matter of time before someone mentions the iffy correlation between gold and inflation. The history of gold versus inflation looks a lot like a bungee cord - years and years go by and nothing seems to be happening, until there's a point of release and the price of gold rockets up.

To read more, click below:
http://financialedge.investopedia.com/financial-edge/0911/How-Much-Disaster-Can-Gold-Hedge.aspx#axzz1YOY6xEze

FinancialEdge: Of Gold, Greeks, And Governance

Few assets both confound and fascinate investors or politicians like gold. Like stocks, there is a great deal of conventional wisdom and many rules of thumb regarding what makes gold tick, but many of these notions fail careful inspection. Gold is an inconsistent hedge of inflation and hardly an international proxy for "real money," but it does seem to be a global decree on the current state of government policies and the near-term economic outlook. The past 10 years have offered up a lot of evidence and anecdotes as to what really matters when it comes to government actions ultimately influencing the price of gold. (For more on gold, read 8 Reasons To Own Gold.)


In the Beginning
Looking at a long term chart of gold, the price really started to get going around mid-2001. One of the first things that President Bush did in his administration was to pass a major tax cut; a cut that even in the day looked to reverse a lot of the fiscal solvency achieved during the prior Clinton administration. When the September 11 attacks occurred later that year, gold prices spiked again on a rather more familiar "global chaos" trade.

As time went on, there was more and more concern about deficits and government profligacy. Then-Vice President Cheney's comment that "deficits don't matter" arguably highlighted this concern, while the U.S. government began a program of heavy deficit spending to fund new counter-terror military efforts.

Read the full column here:
http://financialedge.investopedia.com/financial-edge/0911/Of-Gold-Greeks-And-Governance.aspx#axzz1Y1QV93yF

2010 - The Year Silver Caught Up

Gold has a special hold on the minds of some investors; so much so that sometimes other precious metals are left behind in the rush to buy the yellow metal. While silver spent much of the recession rally lagging gold, 2010 was a little different and silver dramatically outperformed gold. Just how well has silver done? Within Morningstar's industry lists, only one industry has done better than silver, and the one-year appreciation is better than 90%. 

ETF Bullion
As has been true in gold, investors have flocked to the convenience of a bullion-supported ETF. The iShares Silver Trust (NYSE:SLV) now boasts over $10 billion in assets and holds 350 million ounces of silver in trust - enough to meet the industrial demands of the world for about a year. As it tracks the price of silver (minus a management fee and some ephemeral premium/discount from day to day trading), it is no surprise to see this ETF up more than 60% for 2010, trouncing the better-than 25% performance of SPDR Gold Shares (NYSE: GLD) as of late December. (For related reading, check out Commodities: Silver.)

Market Digs the Miners
As miners are clearly leveraged to the underlying prices of the metals they mine, it is no great surprise to see that the miners did even better than the metal in 2009. Not only is this relatively typical within the industry (again, since miners are leveraged to the metal), but it may be even more so in silver as there are relatively few investable silver companies listed on U.S. exchanges. Even at the end of 2010, a phenomenally strong year for the sector, there are just eight stocks labeled as silver miners with market capitalizations in excess of $250 million.

Among the larger players, Silvercorp (NYSE:SVM), MAG Silver (NYSE:MVG) and Endeavor Silver (NYSE:EXK) led the charge. Even the worst-performing stock in the group, Silver Standard (Nasdaq:SSRI) handily beat the market for the year.


Please continue on to the full piece:
http://stocks.investopedia.com/stock-analysis/2010/2010-The-Year-Silver-Caught-Up-SLV-GLD-SVM-MVG-SSRI-PAAS-SLW1229.aspx

FinancialEdge: 5 Investment Ideas Heating Up Right Now

Give Wall Street a little credit - if there is a demand for a product, they will meet it. If there is no demand for a product, they will figure out how to create that demand. With investors back out of their bunkers and looking to put money to work, Wall Street and Main Street have been working overtime to meet that demand. While not all of these ideas are new per se, many are seeing a resurgence in investor interest, and new themes and sub-types are emerging to siphon off some of that demand. (To learn more, check out The Wall-Street Animal Farm: Getting To Know The Lingo.)

Gold
The idea that gold is pretty popular these days is hardly new, but gold bugs are getting increasingly inventive. The Market Vectors Gold Miners ETF (NYSE: GDX) has lagged the SPDR Gold Shares (NYSE: GLD) of late, but the Market Vectors Junior Gold Miners ETF (Nasdaq: GDXJ) has been hot.

Going a step further, would-be investors are apparently trying to get more of the actual metal in their hands. Demand for minted gold coins continues to run hot, with many mints forced to limit order sizes to see that no customer goes away entirely empty-handed. And now this - gold-dispensing ATMs are on their way to the U.S. 


Please click the link for the full text:
http://financialedge.investopedia.com/financial-edge/1110/5-Investment-Ideas-That-Are-Trending.aspx

5 Could-Be Bubbles Waiting To Burst

One of the oldest sayings of Wall Street (and one that happens to be true!) is that "there is always a bull market somewhere." In other words, no matter how bad one segment of the market may be performing, there is almost always some unrelated asset that is doing well at the same time. Taking that to its logical extreme, if there is always a bull market somewhere, there are almost always a few potential bubbles emerging. So which markets look like they have heated up to the melting point? (For more, check out The Myth About Market Bubbles.)

1. Bonds
To a lot of people, the current yield on government bonds just makes no sense. These people see the federal budget deficit, the huge debt burden and the risk of a stagflation-type environment of low growth and high inflation, and cannot understand how investors could be piling into bonds. Moreover, there is a strong sense that these artificially low rates are just a prelude to a withering bout of inflation that will smack fixed-income instruments hard.

For better or worse, there are other dynamics at work in the bond market. For starters, banks can make a solid "carry trade" on government bonds - banks take their ultra-low cost deposits and invest them in higher-yielding government securities. 


Click below for the full piece:
http://stocks.investopedia.com/stock-analysis/2010/5-Could-Be-Bubbles-Waiting-To-Burst-CRM-VMW-CTXS-LOGM1020.aspx

Copper ... It's Back

Gold gets all the attention, but copper has staged a pretty remarkable recovery from its early summer lows. After bottoming out below $2.80 a pound, the December contract is near $3.70 and the highs of 2008 are in sight. Considering just how useful copper is in so many industrial, construction and communications applications, an ongoing global economic recovery should be a solid demand driver.

Most of the major copper producers have already run up in concert with the price of the metal, but investors may want a refresher course on the major players with an eye toward buying the inevitable dips.

Freeport-McMoRan (NYSE: FCX)
These are the fat times for Freeport-McMoRan, as this company is not only a major copper producer, but a major gold miner as well. At current prices, the 83 billion pounds of copper and nearly 34 million ounces of gold in Freeport's reserves are worth over $800 per share. Of course, that does not include the costs of extracting those resources (nor the risk of lower future prices), but it should give investors a sense of the magnitude of Freeport's resources. Freeport has long since diversified its reliance upon its Indonesia mine to a tolerable level, and the company produces more than 10% of the world's annual copper output. (For more, see Taking A Shine To Copper.)

For the full article, please click on the link below:
http://stocks.investopedia.com/stock-analysis/2010/Copper---Its-Back-FCX-SCCO-TGB-TCK-RTP-BHP1011.aspx

Five Gold Ideas Off The Beaten Path

No matter what an individual investor may think about gold these days, there is no denying that it is a major topic of conversation. The SPDR Gold Shares (NYSE:GLD) is just one of several ETF options, and investors have been turning to funds, bullion, coins and miners of all shapes and sizes to make their plays on the shiny yellow metal that is once again so popular. (To learn more, see Why Gold Matters.) 

With such a significant interest in gold, it is difficult to find too many credible ideas that would really meet the standard of "overlooked" or ignored. Nevertheless, here are five ideas that investors may not always see in broader discussions of gold mining stocks. In particular, these are names that may attract the attention of larger miners looking to build their reserves through the checkbook instead of the drillbit.


To read the full piece, please go to:
http://stocks.investopedia.com/stock-analysis/2010/Five-Gold-Ideas-Off-The-Beaten-Path-GLD-ANV-NEM-AZK-IAG0916.aspx