The case for staying invested in gold bullion - Wealth Managers

Over the past decade investors have poured billions into exchange-traded funds that track the price of gold. Now with gold prices falling, many are yanking some of that money back out -- a move investing pros say misses the whole point of owning the shiny metal in the first place. 

Gold's recent slump -- down 4% so far this year -- has turned many former gold bulls into bears. In the first two weeks of March, investors pulled $1.6 billion from gold ETFs, according to data compiled by BlackRock, the largest ETF provider. That follows outflows of more than $5.6 billion from the funds in February, the largest monthly outflow ever. 

Many of these investors are simply seeking better returns: The decade-long gold rally may have stalled (or be over), but stocks are on a tear. So far this year, the Dow Jones Industrial Average has returned 11% and is hovering near an all-time high. 

"Some people chase momentum," says Russ Koesterich, BlackRock's global chief investment strategist. 

But some advisers say that strategy could backfire. For starters, they point out that gold could bounce back if there's a sudden jump in inflation, a flare-up of the European debt crisis (perhaps tied to the Cyprus crisis) or a stock-market correction at home. But more importantly, they say owning gold isn't about buying low and selling high, but about owning an insurance policy for the long term.

More information can be found online at http://www.goldbullionadvisors.com

"Gold Bullion is the ultimate money," Ron Paul tells Fox Business - Wealth Management

 Are more people going to think of gold as money in the wake of the Cyprus crisis? "Absolutely," former Congressman Ron Paul, R-Texas, tells Fox Business in a March 20 interview that also touches on the Federal Reserve. 

"And that's the nature of government. When they get into trouble, they either try to raise taxes, which is confiscation, but this is a little bit more blatant. ... But we're not immune from these kinds of things. It happened in the Depression and different times. So, yes, the ultimate test is money. Not because I think it's money but because history has proven that. If you really want to know the ultimate money, think of the countries that get into trouble and people try to leave their borders. Do you think you can give a paper dollar or a paper currency to bribe somebody at the border? No, you need gold because gold is the ultimate money." Paul dismissed the stock market's recent gains as "price fixing" stemming from the Federal Reserve's massive quantitative-easing program.

More information can be found online at http://www.goldbullionadvisors.com

$1,800 Gold Bullion by September, Weeden strategist predicts - Wealth Management

 "The way I look at gold is the dichotomy is really between the physical gold trade and the paper gold trade," Weeden & Co. strategist Michael Purves tells Bloomberg in a March 20 interview. 

"The physical gold story, if you will, is intact. We see large-scale purchases by central banks. That's continuing apace regardless of what prices you're seeing on the screen. ... 

"I think we'll head up to $1,800 by September is my target right now. But I think it's a lot choppier trade than what we've seen over a lot the last several years because you have a lot of people who have come in above this, a lot of people came into QE3 last September, and they've seen nothing but price corrections. We're going to see people sell into rallies and I think it's going to take time to clear out some of that, but I do think that there's no question that the fundamental trends over the longer term are very much, absolutely intact, and that will provide support here."

More information can be found online at http://www.goldbullionadvisors.com

5 reasons gold could hit a record high this year - Wealth Management

 1) The Feverish Growth of Fiat Money: The USA, Europe, China and most of the developed world is printing money much faster than the amount of new gold being mined or discovered. Runaway money printing presses are always bullish for gold.

2) The Feverish Demand For Gold: As central banks continue to print, individuals are continuing to relentlessly buy gold, especially in the world's two most populous nations, China and India, which in 2002 accounted for 23% of world gold demand. Today, just these two nations alone make up nearly half of all demand at 47%. This is just the beginning. Meanwhile, less than 2% of all investment funds are invested in gold. Does that sound like gold is in a bubble?

3) Even Central Banks Have Begun Buying: Central banks, especially RUSSIA and China as well as the developing nations' Central Banks are buying and hoarding gold at a record pace. It is my belief that China will drastically expand its gold buying year after year on a cumulative basis in an effort to accumulate enough gold to back the Yuan by at least 25% to 50% with gold in their effort to replace the US $ as the world's reserve currency.

4) High Demand Meets Short Supply: The other side of the equation is supply. The gold mining industry is struggling to find more gold. The industry as a whole spent a record $8 billion in 2011 to explore for gold and yet their successes for gold discoveries are declining drastically. Bloomberg reported that from 1991 to 1999 there were 40 three million oz. or more gold discoveries, yet from 2001 to 2009 there were only that.

5) My Favourite Reason For $2,400 Gold in 2013: The vast majority of analysts consistently forecast too low and are even predicting declining gold prices farther out. But guess what? They've been consistently wrong for 12 years. Meanwhile, breakeven costs continue to rise meaning the price floor keeps rising. And only the richer discoveries can and will be exploited. That's one reason why I expect gold prices to set a new all-time record price high in 2013, of $2,400.

More information can be found online at http://www.goldbullionadvisors.com

China "will always keep gold in mind as an option in reserve assets" - Wealth Management

A top Chinese central banker reaffirmed Beijing's continuing strategy of acquiring more gold without driving up prices on the global marketplace. Take with a grain of salt, however, his pledge of gold constituting a 2% maximum of its total foreign exchange reserves. Yi Gang's statement also shows how China is indirectly accumulating gold by allowing its citizens to purchase it:

China is likely to limit its gold holdings to 2 percent of its total foreign exchange reserves, said Yi Gang, a deputy Chinese central bank governor. 

The People's Bank of China last made known changes to its gold reserves in 2009, announcing that it held 1,054 metric tons. The bank hasn't made any revisions since then. That's about 1.8 percent of its total reserves, according to data from the World Gold Council. 

"If the Chinese government were to buy too much gold, gold prices would surge, a scenario that will hurt Chinese consumers," Yi said today in a press briefing in Beijing. "We can only invest about 1-2 percent of the foreign exchange reserves into gold because the market is too small." ...

About two-thirds of China's foreign reserves are dollar-denominated and another quarter is in euros, according to Yao Wei, a Hong Kong-based economist at Societe Generale SA. China is now encouraging companies and residents to keep more foreign currency in a strategy known as "hiding foreign currencies among people," meaning that the government's foreign reserves may "gradually fall," Yang said. ... 

"We will always keep gold in mind as an option in reserve assets and investments," Yi said. "We are able to import 500-600 tons a year, or more, but we will also take into consideration a stable gold market."

More information can be found online at http://www.goldbullionadvisors.com

Gold "could make a run at $1,900 or $2,000," says Bianco Research - Wealth Management

 "The price hasn't gone down at all; the price has been unchanged" after a wave of gold ETF selling, Bianco Research chief Jim Bianco tells Bloomberg in a March 12 interview. 

"There is a huge underlying demand for gold in the last couple of weeks. It's offset what are the equivalent of about 7% or 8% of world production being sold in just a few weeks. Contrarian speaking like a technical analyst, that's bullish. You can find a buyer for all that gold. ... ETFs are usually bought by retail investors. Retail investors, when the price broke $1,600, started to run for the exits. Everybody else has absorbed their selling. Now when they start to wane on their selling and they've already sold a record amount for the 10-year history in ETFs, I think the price will start back up again. ...

"Gold is more than just an inflation hedge. It's an anti-fiat money hedge. In this currency war every major central bank is trying to out-ease the next central bank and devalue their currency. How does one get out of the financial system? Well, the answer is you can't. But the closest you can come to it is gold, and gold is the hard-money currency in a world of devaluing currencies. That has been its story for the last 10 years, and I think that will continue to be its story. ... I think once we're done with this little selloff here and once we've stabilized, I think we could make a run at $1,900 or $2,000. It's not that far away from current levels."

More information can be found online at http://www.goldbullionadvisors.com

"There are staggering bullish market indications for gold bullion" - Wealth Management

Golden Jackass publisher Jim Willie recently joined Greg Hunter of USA Watchdog to discuss precious metals. Willie, who holds a Ph.D. in statistics, says, "There are staggering bullish market indications for gold. The primary cylinder is negative real interest rates for the past 10 years." 

Dr. Willie says other bullish factors include "phony accounting at insolvent global banks" being propped up by massive money printing. Dr. Willie contends, "In January alone, the European banks were the beneficiaries of $1.2 trillion from dollar swap facilities as directed by the U.S. Fed. That's what's keeping these bonds floating and the banks alive. They're zombies." 

Dr. Willie says, "Europe is on the verge of collapse." When it does, Dr. Willie says a new "Gold Trade Finance System" is already in place to take over for the dollar. Dr. Willie's sources say, "The trade finance system has already agreed on a gold price of $7,000 to $8,000. Silver would be $150 to $200 per ounce."

More information can be found online at http://www.goldbullionadvisors.com

Gold buying opportunity: "This is an investor's paradise" - Wealth Management

 "Right now, this is an investor's paradise here in gold," iiTrader strategist Bill Baruch tells Yahoo! Finance's "Breakout" show.

"We haven't seen the market since 2011 below $1,500. Right now we're pressing the lows that we've seen on the year and I think it's a great buying opportunity. What you're seeing right now is the equity market is low volatility, slow grind higher -- (that) takes a lot of the luster away from gold. But at the same time, this market has a lot of value. You're seeing premiums in Asia on the market right now as well. There's a lot of shorts in the market below $1,600, and then there's a lot of money managers that have gotten out of gold over the last, say, 12 months. But if this market starts to move, there's a lot of gold bugs, gold bulls, looking to buy and looking to get in this market. ... I think this is a buying opportunity down here. We may flush out a little bit at these levels here, but if we get above $1,600, that's when you want this market to start moving. We could go from $1600 to $1700 in such a hurry that if you're not in this market, you're gonna miss it. ... I don't think we're going to approach $1,900 this year, but if we get momentum above $1,600 ... we can go through $1,700, and my target, I do think that by end of the year we can get up to $1,800. ... If we hold $1,500, we're going to see $1,800 by the end of the year."

More information can be found online at http://www.goldbullionadvisors.com

Don't fight the central banks when it comes to Gold Bullion - Wealth Managers

As gold falls out of favor with investors in a "risk-on" trading environment, one expert says the market bears should think carefully about betting against the precious metal at a time when central bank demand for gold remains strong.

"When you see central bankers acquiring gold, you can kind of take it like this: You don't fight in the stock markets when the Fed is easing, so you wouldn't want to fight the central banks when they're buying gold, because they have deep pockets," Philip Silverman, managing director at Kingsview Management in New York, told CNBC on Thursday.

"As far as ETFs go, a lot of hedge funds have been burnt by holding gold in an environment where equities are going through the roof. At the same time a lot of commodity trading advisors were getting out of gold and then going short," he said. "The selling is much more of a reaction to what's going on with gold right now. If you take a long-term horizon, it's a good time to add gold."

More information can be found online at http://www.goldbullionadvisors.com

Gold to hit $1,900 but not until stock bubble bursts, Blackstone investing icon says - Wealth Managers

 "Right now we have a euphoric spirit in the (stock) market and that's always a point of vulnerability," Blackstone Group vice chair Byron Wien tells Bloomberg in a March 5 interview that includes Donald Baer of Burson-Marsteller. 

"We're putting $85 billion into the economy every month. In 2007, the entire balance sheet of the Federal Reserve was $1 trillion. Now in 2013, we're going to put $1 trillion in in a single year. It took from 1913 to 2007 to put the first trillion in, and it's only taken 12 months to put this trillion in. The Fed balance sheet has gone from $1 trillion to $3 trillion now and it's going to go to $4 trillion before Christmas. ... Too much of the money has gone into the stock market; not enough to the real economy. ... The case for gold is central banks around the world -- in Europe, the United States, and Japan -- are debasing their currencies. You're going to want to own something real. Gold is perceived as real, and that's why I think it's going up. But it won't go up until stocks start to go down, so we really need a crisis in the market. ... I do think gold is going up; I don't know if today's the day. I do think we're in a consolidation period. I don't think that you're vulnerable if you own gold. And it's just impossible to determine when the moment of truth is going to come."

More information can be found online at http://www.goldbullionadvisors.com

Gold "offers good value at current prices," Morgan Stanley says - Wealth Management

Morgan Stanley, which for a while has touted gold as its No. 1 investment idea in the commodity space, isn't ready to throw in the towel just yet.

In fact, according to the bank's chief metals economist, Peter Richardson, "The reasons for owning gold may be evolving." ...

To sum it all up, Richardson concludes, "In these circumstances, we believe that gold has demonstrated considerable technical strength, offers good value at current prices both as an entry level to the trading range between US$1,540/oz and US$1,800/oz and as an option on any remaining upside surprise above this range that might result from the third part of the Great Monetary Easing."

More information can be found online at http://www.goldbullionadvisors.com

Dow at record high, but "it's going to end very badly," hedge-fund legend predicts - Wealth Managers

Yes, the Dow Jones has hit all-time record highs, but according to hedge-fund legend Stanley Druckenmiller: "The party is going on, and money is being pumped in," but it can't last.

"The party can continue for awhile," he allowed. "I don't know when it's going to end, but my guess is it's going to end very badly." And he added a word of caution for investors only just being drawn into the markets after years of holding back: "If you're going to play ... for God's sake play in liquid instruments."

* Dow Jones Industrial Average: Then 14164.5; Now 14164.5
* Regular Gas Price: Then $2.75; Now $3.73
* GDP Growth: Then +2.5%; Now +1.6%
* Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million
* Americans On Food Stamps: Then 26.9 million; Now 47.69 million
* Size of Fed's Balance Sheet: Then $0.89 trillion; Now $3.01 trillion
* US Debt as a Percentage of GDP: Then ~38%; Now 74.2%
* US Deficit (LTM): Then $97 billion; Now $975.6 billion
* Total US Debt Oustanding: Then $9.008 trillion; Now $16.43 trillion
* US Household Debt: Then $13.5 trillion; Now 12.87 trillion
* Labor Force Particpation Rate: Then 65.8%; Now 63.6%
* Consumer Confidence: Then 99.5; Now 69.6
* S&P Rating of the US: Then AAA; Now AA+
* VIX: Then 17.5%; Now 14%
* 10 Year Treasury Yield: Then 4.64%; Now 1.89%
* EURUSD: Then 1.4145; Now 1.3050
* Gold: Then $748; Now $1583
* NYSE Average LTM Volume (per day): Then 1.3 billion shares; Now 545 million shares.

More information can be found online at http://www.goldbullionadvisors.com

"The current bull market in gold bullion is likely far from over" - Wealth Management

The ongoing gold correction has shaken faith in the metal among some investors, and the pain could continue for a while, argues James Gruber of Asia Confidential. However, once the smoke clears, he thinks a rebound toward to $2,000 is likely:

If I'm right about a further correction in the price of gold, the coming months will be a test for even the most ardent gold proponents. It's worth keeping in mind though that the current bull market in gold is likely far from over, for the following reasons:

* Commodity bull markets have lasted an average 18 years over the past century; the shortest bull market was 14 years. We're into the 13th year of the current gold bull market.
* Bull markets always end with parabolic spikes. For instance, gold went up 4x in 13 months during 1979-1980 and the Nasdaq climbed 171% in 17 months before peaking in January 2000. Gold hasn't had this spike this time around.
* Retail investors have minute exposure to gold. During bull markets, the general public invariably gets enamoured with assets whose prices are rising. We just haven't seen this kind of enthusiasm towards gold.
* More fundamentally, gold remains the best hedge against currency wars. ...

Though short-term caution is warranted, I eventually see gold testing, and possibly going well beyond, its real all-time high near US$2,400/oz.

More information can be found online at http://www.goldbullionadvisors.com

Rick Santelli: If you're playing a gold ETF, all you've got is a piece of paper

CNBC analyst Rick Santelli interviewed Frank Lesh of FuturePath Trading in a Feb 27 interview on the subject of gold exchange-traded funds. Santelli makes some pointed observations on gold ETFs versus physical bullion:

"One of the biggest changes we have seen in the [gold] market is the fact that it has turned into a security here," Lesh says. "Evolution of ETFs. What this has done is enabled a lot of people to participate in this gold market that never would have been in it."

Santelli notes: "But didn't it take the whole point away to some extent, Frank? I hate to interrupt you. Back when I was trading gold, the newspapers used to have on the front page of the (Chicago) Tribune, the gold watch, the silver watch, people were taking antique silver sterling that was passed down and melting it. It is not the same now. If you're trading paper, the notion of many who trade gold, the Ayn Rand-ers as I call them, if the financial world comes to an end, they're going to have the gold. If you're playing in an ETF, you're going to have a piece of paper. You're not going to -- so it takes away some of what I perceive are the driving forces behind the run-up in the early stages after the crisis."

Lesh replies: "Yeah, all of this is true, because you're not going to be able to be able to get at that gold in a crisis." Santelli responds: "It's just my opinion, folks, but I don't know, in the garage of the ETFs, if all the gold that's supposed to be there is there. I know that may be heresy, but, Frank, what I'm saying is what all gold bugs talk about."

More information can be found online at http://www.goldbullionadvisors.com