Category: Precious Metals

On yesterday I mentioned once again that gold is inversely related to the dollar.  Since I keep harping on this point, I thought an example might be helpful to illustrate the relationship.  This may bring back some bad flashbacks from math class, so if you really don’t care of the “why” – just remember that gold and the dollar move inversely to each other and that will put money in your pocket.

Gold is priced in US Dollars (USD).  So, if it is currently selling at 640 USD/oz – it requires the exchange of 640 USD for 1 ounce of gold anywhere in the world.  Thus owners of non US Dollars must exchange their currency for USD to purchase gold. This happens behind the scene and is transparent to the purchaser. Therefore by definition the price of gold is linked to foreign exchange rates.

Continue reading “The Dollar & Gold Relationship”

In my article, “Wealth Building Thru Gold Investing – It is All About Supply and Demand” I stated that Asians have a strong affinity for gold and as Asian investors become wealthier their ownership of gold will increase.  The sheer number of potential Asian investors buying small amounts of gold will create an unprecedented demand driving the price of gold higher.  The following provides additional support for my position.

Continue reading “2007 Year of the Golden Piggy Bank”

Spend some time surfing these pages and you will find many ways to profit from metals and minerals in the upcoming year.

Source: Scotiabank

Nickel was the top performing commodity in 2006, climbing an extraordinary 159 per cent over the past year. Recent news that Australia’s Ravensthorpe mine will not come on stream until 2008, instead of second half 2007, and that Inco/CVRD’s Goro mine will be delayed until late 2008, has raised concern over supplies, in an environment of strong global demand growth. World stainless steel production advanced by 12 per cent in 2006, boosted by robust demand for oil drilling equipment, electric power expansion and booming aircraft orders. A ‘super-cycle’ is expected in nickel, with prices staying strong through 2008.

Uranium was the third-best performing commodity in 2006 and will likely be the top performer in 2007. “Uranium and zinc are our top ‘picks’ for investors in 2007, with precious metals, especially silver, also expected to benefit from further weakness in the U.S. dollar,” says Patricia Mohr, Vice-President and commodity market specialist, Scotia Economics. “Potash fertilizer should yield good gains for investors. Wheat, barley and canola should also perform quite well relative to past experience, linked to new demand for ethanol additives in gasoline and biodiesel, although metals & minerals are expected to retain their leadership position.”

Given rising metal prices, the pennies and nickels in your pocket are worth more melted down than their face value.  However, to ensure that enterprising entrepreneurs don’t get any bright ideas the government has instituted new regulations prohibiting the melting of the coins. Violators face penalties of up to five years in prison and a $10,000 fine. 

What about shipping your penny jars to relatives outside of the US to melt for you?  The Government has covered that as well.   The new laws restrict shipments of the coins out of the country to legitimate coinage and numismatic purposes and cap the size of any one shipment to $100 worth of the coins (US Mint Bans Melting Pennies, Nickels).

Oh well, there is still plenty of money to be made buying stocks of metal mining companies.  Profiting from a basket of stocks such as the Big-Build Out portfolio has been like taking candy from a baby.