Buying Gold | It's Time To <b>Buy</b> This 3x Leveraged <b>Gold</b> Mining ETF - Seeking Alpha | News2Gold |
- It's Time To <b>Buy</b> This 3x Leveraged <b>Gold</b> Mining ETF - Seeking Alpha
- Global <b>Gold</b> Demand Steady Despite Indian Repression; Stealth <b>...</b>
- Kevin Kerr: Not <b>buying gold</b> now is 'somewhat foolish' - MyGold
- Why this top technician recommends <b>buying gold</b> now - CNBC.com
| It's Time To <b>Buy</b> This 3x Leveraged <b>Gold</b> Mining ETF - Seeking Alpha Posted: 21 May 2014 02:53 AM PDT
For everyone bullish on gold and silver and related mining companies, the past two and a half years have been extremely painful. Anyone joining the party late in 2010, early 2011 has had only pain, with no joy till this year. And those smiles quickly turned back to tears in March. Amongst all the cries back then of gold going to $5000 and silver going to $100 and higher, there were a few wise voices saying that there was going to be a big fall. I wish I had listened, but I didn't understand the logic and stuck by my belief that massive money printing had to lead to inflation and would thus continue to fuel the rise in gold and silver prices. Fast forward to December 2013 and gold was putting in a double bottom and many miners were hitting new lows. Direxion Shares Exchange Traded Fund Trust, NUGT, had crashed much lower because of its triple leverage. When metal prices are falling, this is just about the worst stock to be holding, but when prices turn to the upside, then that triple leverage works in your favor. There weren't many voices in December shouting, "Buy gold!", and anyone suggesting it wasn't shouting. There was simply growing confidence that the time to buy was near. The fact that NUGT had fallen from a high of $100 in August to just $25 made it very, very compelling. For anyone that made that bet, they had a great run to its high near $58 in March. Now, with the price back down and bouncing off lows of $34 and lower, and gold building strength to the upside, I think it's time to make that bet again. NUGT data by YCharts As you can see from the chart, the drops can be scary so you need to have stops in to sell, but once a bottom seems to be in, then you have a decent chance of getting a good run up. And I don't think I need to emphasize the need for caution. The pain felt by those holding SPDR Gold Trust, GLD, or physical gold has been very severe but it looks almost insignificant next to the declines of NUGT. Such are the risks (and potential rewards) of 3x leverage, on top of the leverage that you inherently get from investing in miners rather than physical (or paper) gold. NUGT gained a whopping 120% since its low in December to its high in March, while GLD, which follows the price of spot gold gained roughly 14%. Since their March highs, NUGT has fallen about -42% while GLD has given up about -7%. In comparison, some miners like Pan American Silver Corp., PAAS, ran up 56% from December lows to March highs, and they've only fallen -15% from those highs. New Gold Inc., NGD, is another miner that I like. It gained a modest 38% and is now down -22%. NUGT data by YCharts Hopefully this paints a clear picture of the potential benefits and risks of leveraging the price of gold by investing in miners and then 'supercharging' that leverage 3x by investing in NUGT. So what are the advantages of buying NUGT versus individual miners? Firstly, it's an ETF so your risk is lower, versus an individual miner that could suddenly go bankrupt. Secondly, when the bottom seems in and the next likely move is up, it will likely give better gains than most any individual miner. What are the risks? Obviously, if the price of gold drops below $1278, NUGT will sink like a rock. Notice that NUGT was around $24 in December when gold was bottoming around $1180. Now, NUGT is ranging between $33-$38 and gold is ranging between $1280-$1310. If the price of gold returns to $1180, NUGT will go much lower than its previous low of $23. I suspect it would drop to mid-teens or lower. That's the risk of leveraging. It's perhaps a bit like playing with nitroglycerin. Dangerous, but very useful if used wisely. What are NUGT holdings? It's simply a triple-leveraged play on Market Vectors Gold Miners ETF, (GDX), whose top 10 holdings as of 11/26/2013 are Goldcorp Inc. (GG), Barrick Gold Corp (ABX) Newmont Mining (NEM) Randgold Res-Adr (GOLD), Yamana Gold Inc (AUY), Silver Wheaton (SLW), Franco-Nevada Corp (FNV), Kinross Gold (KGC), AngloGold As-Adr (AU) and Agnico-Eagle Min (AEM). These are all major companies with very little risk of going bankrupt but are also less likely to give stellar returns in the near and long term if gold and silver prices improve. NUGT data by YCharts The remaining question is, "Is gold going to go up from here?" The sentiment from most of what I'm reading is yes, and this chart from MarketClub gives a nice technical view that gold is indeed ready for an up move. Summary: If you believe that the price for gold and silver is likely to move higher in the near to long term, then a very good option is to buy NUGT. If you have other gold and silver holdings that are still sitting at a loss, it may be wise to sell them, take the loss, and buy NUGT in order to get leveraged gain to the upside, thus recovering your current losses quicker. And again, a word of caution, NUGT will also explode to the downside if the price of gold drops below the current base of $1278. So play safe! Best of luck to everyone. Disclosure: I am long NUGT, PAA, NGD, SLW, KGC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Want more from this author? Follow and be the first to know when they publish.  (9 followers)
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| Global <b>Gold</b> Demand Steady Despite Indian Repression; Stealth <b>...</b> Posted: 20 May 2014 04:31 AM PDT by GoldCore Today's AM fix was USD 1,291.50, EUR 943.46 and GBP 767.56 per ounce. Gold climbed $0.50 or 0.04% yesterday to $1,293.60/oz. Silver rose $0.03 or 0.15% to $19.39/oz. Gold prices are marginally lower today as market participants digest yesterday's European central bank gold agreement and the World Gold Council's report on global gold supply and demand.
Investors weighed uncertainty surrounding developments in Ukraine as pro-Russian separatists and Ukrainian forces in the eastern reaches of the country continued to clash yesterday, resulting in the death of one Ukrainian soldier. Ukraine will hold elections on May 25 and concerns persist of a civil war. Another geopolitical flashpoint are the rising tensions between the U.S. and China. The superpowers are clashing over territorial disputes and yesterday the U.S. indicted five Chinese military officials for stealing trade secrets. China has responded by suspending its involvement in a cyber security working group and threatened further retaliation. The indictment is a "serious violation of the basic norms of international relations and damaged China-U.S. cooperation and mutual trust," Foreign Ministry spokesman Qin Gang said in a statement. Russia's President Vladimir Putin has arrived in Shanghai ahead of a summit at which Russia and China are hoping to deepen ties including a $60 billion gas deal. This would likely see China pay for Russian gas in yuan thereby delivering another blow to the dollar as a global reserve currency as currency wars intensify. The two countries will make a "substantial" announcement and sign agreements, said state Chinese media Xinhua. They will also kick off a joint military exercise involving their navies. Global Gold Demand (Official) Steady At 1,074 Tonnes In Q1, 2014 Global demand fell to 1,074.5 metric tons in the quarter, from 1,077.2 tons a year earlier. Jewellery demand gained moderately, largely due to the environment of lower gold prices compared with Q1 2013 and seasonal factors in many markets including Chinese New Year and Valentines Day. Divergence was seen within the investment sector. The source of supply that was ETF liquidations came to an end as ETFs flows were zero, compared with 177 tonnes of outflows in Q1 2013. Store of value, bullion coin and bar demand unsurprisingly fell below the record Q1 levels of demand seen a year ago. Central bank demand fell marginally but remained robust as central banks continued to purchase gold for its diversification and risk management properties . Thus, jewelry purchases primarily from store of value buyers in Asia countered declines from record levels in investment, store of value and central-bank buying. Conclusion Another important caveat to the figures is the 'elephant in the room' that is demand from the People's Bank of China (PBOC). The PBOC does not declare their monetary gold purchases to the IMF or release the data. However, most market participants accept that they have and are quietly buying significant amounts of gold as part of their foreign exchange diversification programme and as part of their strategic goal to position the yuan as a rival reserve currency ( see Currency Wars: Bye, Bye Petrodollar – Buy, Buy Gold). The World Gold Council report and the important context of gold smuggling in India and elsewhere and undeclared central bank demand shows that the supply demand fundamentals of the gold market remain robust. They should both support gold at these prices and lead to higher prices in the coming months after gold's multi month period of correction and consolidation. Follow GoldCore and GoldCore's Head of Research Mark O'Byrne on Twitter. |
| Kevin Kerr: Not <b>buying gold</b> now is 'somewhat foolish' - MyGold Posted: 08 May 2014 09:21 PM PDT
"Prospects for gold in 2014 have increased significantly in the face of fast moving Ukrainian developments," he wrote. Prices for the metal have been very volatile in the short term, but the downside risk, especially when gold's decline last year is factored in, is "very limited," said Kerr, who's also editor of CommodityConfidential.com. Gold futures prices dropped 28% last year. "Not taking a long position in gold is somewhat foolish at this stage," he said. (A long position is essentially a bet that prices will go higher.) Kerr's comments are contrary to those of Brien Lundin, editor of Gold Newsletter, who said in a recent note that gains in gold on the back of the turmoil in Ukraine represent a "sucker's rally." The best time to buy gold is during "post-crisis corrections, and not during the crisis-fueled rallied," he said. According to Kerr, other catalysts for gold gains include: The economic debacle and non-stop money-printing has "run amuck," and with resources getting tighter and tighter, there is going to be more "fiat (paper) currency sloshing around." So consumers will need more of that paper money to buy more real things, he said, referring to the situation as hyperinflation. One solution to hyperinflation is to switch to a non-fiat form of money, and one of the oldest currencies in the world is gold, Kerr said. At the same time, the Chinese "cherish gold as the premier symbol of wealth and store of value," and they're buying the metal "hand over fist." "If you're worried about the U.S. economy, we suggest you buy gold," said Kerr. "And if you're not worried about the Chinese economy, buy gold." He admits that gold will have a "volatile time" climbing over $2,000 an ounce and beyond, but "it'll happen much quicker than most 'experts' think as demand picks up." Original Source: Market Watch |
| Why this top technician recommends <b>buying gold</b> now - CNBC.com Posted: 24 Mar 2014 09:53 AM PDT Gold suffered another tough session Monday, dropping nearly 2 percent following a bad week. But one of the most respected technical analysts on Wall Street says it's high time to buy in. Indeed, Sterne Agee chief market technician Carter Worth predicts that gold will rise about 15 percent from current levels. After a painful 2013, bullion was finally finding some strength in the beginning of 2014. The key, for Worth, was that the metal was able to turn around a grim trend. "When you're cascading, you make a low and then you violate it. And make a low, and then violate it. Make a low, and then violate it. Low after low," Worth said Friday on CNBC's "Options Action." "But then, we have this massive low in June, as everyone knows, and again, we have a rally. But this time, we don't violate. So we have a well-defined double bottom." |
The Russian invasion of Ukraine is only one of many reasons behind higher prices for gold, according to a post by ITrustGold Editor Kevin Kerr that appeared in its 2014 Gold SuperCycle Report.| You are subscribed to email updates from buying gold - Google Blog Search To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
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