Tag: Commodities

Gold Weekly Fundamental Analysis for June 27-July 01, 2011

Gold ended last week with heavy losses after the metal failed to sustain the gains versus the strong dollar and amid a heavy selloff on commodities.
This week, the downside pressures on gold might still be evident this week as the metal broke through critical support levels and accordingly the liquidations might still be evident especially amid heavy volatility in the market

Your Best Real Estate Investment is a Moat

Brazil’s new middle classes buy the same things we all buy when we have more money in our pockets. And that includes property…upgrading where we live to a better home in a nicer neighborhood, or buying a second home at the beach. Brazil’s middle classes are driving Brazil’s real estate market…

So invest in the right projects in the right markets in Brazil and you could be sitting pretty indeed. Here is one to consider:

In a sweet little beach town with miles of white-sand beaches – just 30 minutes from Brazil’s #1 domestic tourism destination – you can buy a beach lot in a residential community next to a new super-luxurious five-star resort. It’s expected that lot prices will double in the next three years. Listen in to the conference recordings and learn how you can get a big discount (and a low price not available anywhere else) and become an owner here. And the terms Ronan and Margaret have negotiated: No money down and interest-free payments for just two years…

There were other deals in Brazil. I sat through two workshops this afternoon given by Brazilian real estate experts. They both brought four extraordinary deals with top-dollar profit potential…

Why Are Gold Stocks Falling?

Gold stocks normally amplify the gains from gold. If gold goes up 10%, then a good gold stock should go up 20%. So traders look for this ‘leverage’ to the gold price in gold stocks.

That was until ETFs became such a big force on the market.

Now traders can invest directly in gold ETFs with borrowed money to get the same effect. It saves having to do all that annoying research into a gold company.

So with all that money heading for the ETFs – instead of the stocks – the gold price and gold stocks are diverging.

Gold Approached $1,570 an Ounce!

Gold approached $1,570 an ounce, extending a rally to a record, on bets that the dollar will extend a slump, enhancing the allure of the metal as a store of value. Silver posted for the biggest monthly gain in 28 years.
“Silver’s run is related to the rise in gold,” said Michael Cuggino, who helps manage about $12 billion at Permanent Portfolio Funds in San Francisco. “There’s a lot of speculation in silver. Anytime you’ve had a run like silver, you’re going to get a correction.”

Gold has climbed 33 percent in the past year, and silver has more than doubled.

How to Invest in Gold

How to invest in gold and key price drivers

Article updated on May 20, 2020

How to invest in gold and key price drivers

LONDON (Reuters) – Gold surged to a record above $1,500 an ounce on Wednesday as dollar weakness and a rise in oil prices added to fear-driven buying on the back of uncertainty over eurozone stability and U.S. growth.

The following are key facts about the market and different ways on how to invest in Gold.

 

HOW DO I INVEST?

SPOT MARKET

Large buyers and institutional investors generally buy the metal from big banks.

London is the hub of the global spot gold market, with more than $26 billion in trades passing through the city’s clearing system each day. To avoid cost and security risks, bullion is not usually physically moved and deals are cleared through paper transfers.

 

Other significant markets for physical gold are India, China, the Middle East, Singapore, Turkey, Italy, and the United States.

Find Out Why Countries & Governments Are Buying Gold

 

Russia continued to official gold reserves to fulfill the goal of boosting the Russian Federation’s national security. Given this statement, there should be no doubt that Russia views gold as an important monetary and strategic geopolitical asset.

 

FUTURES MARKETS

Investors can also enter the market via futures exchanges, where people trade in contracts to buy or sell a particular commodity at a fixed price on a certain future date.

The COMEX division of the New York Mercantile Exchange is the world’s largest gold futures market in terms of trading volume. The Tokyo Commodity exchange, popularly known as TOCOM, is the most important futures market in Asia.

China launched its first gold futures contract on Jan. 9, 2008. Several other countries, including India, Dubai, and Turkey, have also launched futures exchanges.

 

EXCHANGE-TRADED FUNDS

Media coverage of high gold prices has also attracted investments into exchange-traded funds (ETFs), which issue securities backed by physical metal and allow people to gain exposure to the underlying gold prices without taking delivery of the metal itself.

Gold held in New York’s SPDR Gold Trust, the world’s largest gold-backed ETF, rose to a record high of 1,320.436 tonnes in June 2010. The ETF’s holdings are equivalent to nearly half of the global annual mine supply and are worth some $59 billion at today’s prices.

Other gold ETFs include iShares COMEX Gold Trust, ETF Securities’ Gold Bullion Securities and ETFS Physical Gold, and Zurich Cantonal Bank’s Physical Gold.

 

BARS AND COINS

Retail investors can buy gold from metals traders selling bars and coins in specialist shops or on the Internet. They pay a premium for investment products of 5-20 percent above spot prices, depending on the size of the product and the weight of demand.

 

KEY PRICE DRIVERS:

INVESTORS

Rising interest in commodities, including gold, from investment funds in recent years has been a major factor behind bullion’s rally to historic highs. Gold’s strong performance in recent years has attracted more players and increased inflows of money into the overall market.

 

FOREIGN EXCHANGE RATES

Gold is a popular hedge against currency market volatility.

It has traditionally moved in the opposite direction to the U.S. dollar as weakness in the U.S.

The unit makes dollar-priced gold cheaper for holders of other currencies and vice versa.

This link sometimes breaks down in times of widespread market stress, however, as both gold and the dollar benefit from risk aversion.

Their ratio turned positive in late 2008 and early 2009 after the crisis following the Lehman Brothers’ failure.

Despite another drop in the usual strong correlation between gold and the euro-dollar exchange rate, the currency market still plays a major long-term role in setting gold’s direction

 

Analysts say gold’s strong performance last year was largely driven by concerns over the stability of all currencies, though primarily the dollar, as major economies have moved to dampen strength in their currencies to safeguard exports.

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