A List of US Gold & Precious Metal Mutual Funds

• American Century Global Gold
• Amex Precious Metals
  
• Fidelity Gold
• Franklin Gold
• ING Gold
• Invesco Gold
• Monterey Gold
• Oppenheimer Gold
• US Global Gold
• Scudder Gold
• Van Eck International Investment
• Vanguard Gold

Golden Opportunity To Buy Silver Dips

The fall in gold and silver due in the main to the strengthening dollar and weakening oil price is offering a “golden” opportunity for us to see some action this day and buy the silver dips.

Sorry about the very obvious pun but we thought we should tell you that we have placed a day order for SLV Jan 2010 $17 call (SLVAQ) at $0.90 a contract.

At the time of writing the trade has been partially filled although the published bid is still at $0.95.

Readers will recall some very nice profits banked from an earlier trade we talked about, namely the SLV October $15 call so lets hope we can repeat another successful option trade in the metal.

A substantial proportion of our portfolio is held in physical gold, gold and silver ETFs and precious metal miners for the long term as you might expect but when an opportunity arises to take advantage of that excellent piece of market trading advice “buy the dips, sell the peaks” then speculate we will.

Using the power of leverage offered by call and put options means that for a limited amount of financial exposure powerful profits can be made at the same time as knowing exactly how much you might lose within your chosen time frame.

As long as you always bear in mind that options are time sensitive and can expire worthless you can keep potential losses under control without risking the much more expensive and capital intensive speculative route of buying or shorting the actual stock.

Our order has now been filled and the ask is still $0.95.

Silver may go down again tomorrow, if so we will be watching the market closely after the opening hour and if the opportunity occurs we will buy more silver calls at below our target today.

Remember that the dollar is has been heavily shorted and those shorts have to be covered. To further cloud the short term outlook the dollar is now becoming the preferred currency of the carry trade, so expect swings to the upside from time to time that seem to bear no relation to the fundamental facts.

Those facts are that the Feds have made it very obvious that they will continue to pump new money into the so called quantative easing program, interest rates are not going to be raised for a long time yet, another round of mortgage resets and other housing horrors are becoming due and, so far this seasons earnings reports have hardly set the markets on fire.

Lest we forget the most telling statistic of the nations health, at least in our opinion, is that unemployment continues to rise even if a little less quickly.

A hiccup here, a hiccup there, but gold and silver are destined to preserve wealth in the longer term as the dollar gradually continues to give up its status as the worlds´ preferred currency and the US sinks ever deeper into the sea of debt that it is creating for itself.

Gold and silver have never enjoyed more trading opportunities than are available today. We read that even those most conservative of investment bodies, the pension funds are no longer ignoring the precious metal markets and are adding gold ETFs to their holdings.

The market is no longer the preserve of the uber rich and specialist traders, any investor, however limited in capital can now get profitably involved.

How To Invest In Rhodium

At the end of last week Rhodium for 30 day delivery was trading around $1500 an ounce, more expensive than platinum and palladium with which it shares its primary use in auto catalyst applications to control exhaust emissions.

We assume that our readers are conversant with its properties and range of uses. Now lets see how to invest in Rhodium and if it is worthwhile.

As it is such a rare metal there is no primary miner, that is, it is a by- product of other mining activities.

Just to cloud the issue the two principle sources of the metal are South Africa and Russia, both countries with question marks over their political futures so gaining exposure by investing in Rhodium miners will require a high degree of research, together with an outlook on the future political direction of both countries.

It is also known that auto manufacturers are actively researching ways to cut down on the dependency of expensive Platinum Group Metals in catalytic converters, with Rhodium the most costly of all.

We know of no ETF, mutual fund or unit trust trading solely in Rhodium on any world market.

To gain investment via this route your best bet is through one of the several PGM or precious metal funds where rhodium is part of the mix.

There is a Rhodium ´pool´ operated by Kitco through whom you can buy and sell the physical metal as ´sponge´, that is in a powder form. You should be aware that the spreads can be very high indeed when trading the metal by this route.

For more information about joining the ´pool´ go to www.kitco.com and search Rhodium pool.

That leaves the physical metal in ingot, bar or coin form. This is an exceptionally grey area that we are reluctant to comment on with the exception that we have heard of platinum/rhodium coins being minted.

Our advice is that trading in physical rhodium is highly specialised and is the domain of a few very high worth players. It is not a market that even the most sophisticated of knowledgeable general market investors can expect success by trading this exceptionally rare metal with its extraordinary properties and with a limited usage base as it rarely obeys the rules of the game.

For instance, just check out the spreads.

Although we have had questions on how to invest in Rhodium, we trust that readers will not mind if we sum up, in the hope that everybody will benefit, by advising that the safest way to get a toehold into Rhodium is via a producer.

• If the metal flies to the moon the odds are heavily in favour of the other PGMs doing the same.

• If a less expensive substitute for Rhodium and Platinum does arrive in the auto industry, at least some sting will be taken out of the downside by the wider applications enjoyed by the other metals produced by the miners.

One final thought, just like platinum and palladium, rhodium remains unchanged in the catalytic process and therefore is subject to very intensive recycling.

Gold – Buy The Dip Today!

Gold has dropped $20 in a day and $30 in ten days. Not quite the mother of all dips but substantial nevertheless.

Has there been any fundamental change to the long-term outlook for the yellow metal? Not in our book, if anything the US economy and the dollar are sinking ever deeper into the mire.

That brings us to our headline “gold – buy the dip today” while the bullion price is below $990 an ounce.

After a weekend of reflection on the hot air coming out of the G20 meeting, reality is likely to step in, leaving it unlikely that gold will stay below $1000 an ounce next week.

There seems probable that the outstanding day to day and longer term influence on the gold price will remain the US dollar with the oil price having less input than in the previous twelve and more months.

Even if we are wrong in the very short term there is little likelihood that the dollar will enjoy remaining as the flight to safety currency if the stock market weaken.

Those that take this path quite understandably want instant access to cash to take advantage of any perceived continuity of the current stock market strength, bear bounce or otherwise. Right now the markets have looked flattish all week but there may be a last strong bounce before the inevitable.

We have heard some mention of the dollar as a carry trade currency but doubt whether this is yet a realistic scenario and can account for any significant change in its value.

Our favorite technical analyst tells us that there is a ´nice´ head and shoulders pattern forming in the Dow and S & P 500 that presages a significant fall in around six to ten weeks.

If and when that happens the fears of hyper inflation will re-emerge as risk takers lose their appetite and government may be strongly tempted to enter another round of so called quantative easing, better known as money creation!

The 400 tonnes of gold that the IMF is offloading has undoubtedly had a dampening effect on the market but rumours are strong that a deal will be struck with the Chinese at the summit this weekend.

Even if this does not occur the amount although significant, is not likely to overhang the market for long before the safe haven of gold lures more and more risk averse investors into its folds.

May we leave you with this thought “ don’t delay, buy the dip today´!
Happy investing.

What Caused Golds Record Leap?

Rumours and facts combined caused gold to leap to a record high of $1043.50 an ounce yesterday quickly followed by hitting $1048 in today’s early European trading before falling back to $1041 at 13.25 Central European Time.

The rumour that the Gulf States are considering dropping the US Dollar for oil trading, and using a basket of currencies, including gold, together with no little encouragement from China and Russia, has gained some ground.

We have mentioned before that these countries have expressed reservations about the continued use of the dollar as the world’s reserve currency but have doubts that the complexities of such a change over can be satisfactorily sorted within a short timescale.

We anticipate that if, or more likely when, this comes to fruition it will be after a long period of negotiated agreements between individual nations before a practical consensus evolves over the make up of the alternative trading currency.

The consequences for the value of the US currency should this come about will be little short of catastrophic bearing in mind that China and others will dump their vast dollar holdings as the US economy slides deeper and deeper into the mire.

Why hoard dollars if their purchasing power erodes almost on a daily basis and with little or no hope of US bonds ever being repaid, or perhaps even defaulting on the interest. Simple but grim!

Be that as it may, the fact is that the Australian decision to become the first significant economy of the developed west to signal an interest rise has added impetus to the rise in gold, with other precious metals following suit.

Our theory is that the Australian interest rate rise is being perceived by some investors as the first of many to come from other nations, with the likelihood of high inflation following close behind leaving gold in its centuries old situation as the store of value of the last resort.

There is still one outstanding opportunity for precious metal enthusiasts to cash in on the current bull run in gold. While gold has hit new record highs, silver is still shy of its March 2008 high of over $20 an ounce.

The gold silver ratio is over 60 (but only just) while we expect the historical average ratio of the lower fifties to reassert itself before very long. This will mean a silver price of around $25 an ounce if gold hangs onto the upside of $1040 an ounce.

One final observation, do not expect the US to take this situation lying down. The Fed and its minions will continue to play every trick in the book to undermine the rise in gold, ranging from manipulating the gold and silver markets to mounting any propaganda campaign that will scare the dollar doomsayers and encourage the voters.

How could anybody think that the dollar and US treasuries were a safe haven bet just a few days ago when the markets hiccupped but the dollar rose and yields fell? But it happened and no doubt will happen again as President Obama continues to initiate and authorise more and more government spending that the nation cannot afford.

As an example every socialist administration that the UK has had to endure has eventually had to constrain their spending, even to the point of going bankrupt and cap in hand to the IMF for a loan.

Each and every period of socialist government in the UK, from Attlee after the war, through Wilson, Callahan, Blair and now the mentally challenged Brown, has ruined this once powerful and influential nation and left the Right of centre Tory party to clear up the mess.

Looks like a similar scenario is developing in the United States.

Just as in Britain, short-term socialist style populist measures are being cobbled together with no thought of future consequences. The cash for clunkers is a case in point.

Did nobody think through the eventual outcome when the scheme was closed? Now new vehicle sales are way, way down, while Japanese owned manufacturers took the bulk of the artificially stimulated sales. Oh yes, we nearly forgot that cutting pollution, although we wonder by how little, was a major benefit according to the government’s spin doctors!

Right now the US is heading for the abyss, but it is a large and resilient nation with many natural resources and a population blessed with many entrepreneurial and innovative citizens.

It needs a government capable of grasping the long-term essentials for rebuilding the nations prosperity regardless of any short-term voter unpopularity. Unless President Obama, who has some admirable qualities, has a serious rethink, it will be over three years before the voters will have the opportunity to vote in an administration that can straighten out the mess that seems likely to be left.

In the meantime we must hope that a politician emerges who has the integrity, intelligence and desire to put the good of the nation above all the vested interests and can gain the votes of the majority, whatever his party allegiance.

“Cometh the hour, cometh the man”

Until then put your faith in gold and silver.

Gold Weights Explained

Gold is one of the most popular precious metals in the world. It is used for many purposes such as gold jewellery, in medicine and electronics. Gold is also an essential part of the world over economy, and has an established global market.

Gold has been used as a currency in many countries in history. In the past, many countries had adopted the Gold Standard, which meant their official currency was gold. Although that standard was abolished, gold has retained its importance in the global economy. It is seen as a good investment that should be a part of every portfolio.

The value of gold depends on its weight, and there are many types of gold weights that are used for trading, or investment. The most common type is a gold bar. A Gold Bar is a gold ingot available in many sizes, and weights. They can be specified into tow major categories. One category includes gold bars made through casting. This is a procedure in which, gold is melted, and is poured into different moulds to give them a specified shape.

The next category is that of minted bars. Minting is the process of hand cutting gold blanks according to exact measurements. When the bars are minted or casted, their weight is engraved on the top, so that it is known exactly what its value is. When weighed in grams, sixteen weights are available internationally, which range from five hundred gram to point third of a gram. In ounces, eight weights are available, from twenty ounces to below one ounce.

There are many different weights of these gold bars. Central banks usually hold gold in the form of four hundred oz bars. These bars are allowed to vary between three fifty, and four thirty oz, and are of around 99.5 percent purity. The most widely traded gold weights in the world are the kilo bars. It is the most popular kind to be used by traders, and investors, as it does not sell at a high premium, and thus can be cheaper than other alternatives. Apart from these, there are gold weights of a tone, 1 tola, or 10 tolas.

In London, the market deals in the London Good Delivery gold bullion bar. This gold bar is the most important gold bullion in the world, and it weighs four hundred oz. Loco London is the de-facto standard for bullion spot trading all around the world. This means that the physical bars will be passed from buyer to seller in a transaction.

Gold bars can be denominated in different weights around the world. Internationally, they are weighed in grams while in many English speaking countries including the UK; they are mostly weighed in ounces. In the Asian and Middle Eastern region, they are mostly weighed in tolas.

Nowadays, gold has become an increasingly attractive investment as gold prices are rising, and have reached their all time high this year. When prices rise, this brings profits to gold investors and sellers.

Understanding Stock Futures Trading

Stock futures trading are a way to hedge yourself in stock trading. Put simply, this type of a transaction is defined as the one where you agree to pay a seller a specific price for a specific amount of stock that you buy from him on a particular date in the future.

On the other hand, stock futures trading is an investment option and these can be traded on the markets in a manner similar to ordinary stocks. This type of trading is usually conducted on a margin basis, that is, you only pay a small part of the price of the stock when you enter into a contract.

What Are The Benefits?

This is an important investment avenue, open to investors for hedging their risky stock purchases. They can go short on such future contracts, implying that they sell the stock before they actually own it. They can also go long on such future contracts.

Being margin based, this form of trading allows an investor to buy a large portfolio of stocks with a comparatively smaller down payment as compared to traditional stocks.

Options available to the investor are much more than if you invest in traditional stocks. You can go long and short on the same stock. You can work on a calendar spread, wherein, you enter into a contract to sell the stock futures you have bought a month from now, and again enter into another contract to buy the same stock three months from now.

Disadvantages

Any high return investment avenue, by its very nature, will also be highly risky. The same is true for stock futures trading. Let us compare the scenario of an investment in traditional stocks versus investment in stock futures.

When you buy stocks of a particular company, you will need to pay the current price of that specific stock. If the price of that stock declines, at which point you sell the stock, you will make a loss to the extent of the difference in your purchase and selling price.

In the case of stock futures trading, you undertake margin trading and therefore, buy a much larger portfolio or a larger number of stocks than in the case illustrated earlier. If the price of the stock then declines, you are faced with a situation where you would lose most of your initial investment and will also owe money to your broker. In this case, you are required to make good the loss, and this can put a severe strain on your financial position.

Additionally, in contrast to the situation where you own physical stocks of a company, in stock futures trading, you do not have any rights of stock holders. You are therefore not entitled to any dividend or bonuses, which the company might announce, nor will you have any voting rights.

Stock futures trading are an exciting investment avenue; however, you can easily burn your fingers, so does your research well before you step into this arena.