Archive for the ‘precious metals’ Category
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Precious metals markets are witnessing a slight pullback, but their long-term outlook remains positive as far as I’m concerned. Pullbacks in the prices of the precious metals are simply buying opportunities for me.
My two favorite precious metals—gold and silver—have marginally declined in price over the past few days as the U.S. dollar has been increasing in value against other world currencies.
In these pages, I have rigorously said that gold will keep climbing, but other precious metals, especially silver, may outperform it. Central banks can print more money and manipulate their currencies, but they can’t make more gold and silver.
According to Beijing Antaike Information Development Co., silver demand for China will increase 10% next year. (Source: Business Week, October 25, 2012.) The reason: Chinese investors are buying silver because their economy is slowing down and their wealth is declining. Key stock indices in China have relentlessly declined since 2011.
Below is the chart of Shanghai Stock Exchange Composite Index, which should give you a very good idea of what’s going on right now.
Chart courtesy of www.StockCharts.com
Together with increased demand from investors in China, silver holdings in exchange-traded funds (ETFs) have increased 6.5% this year alone to 592 ounces. The world’s largest silver ETF, iShares Silver Trust (NYSE/SLV), holds 9,918.67 tonnes of silver and reported an increase of 30.12 tonnes in its holdings on October 24, 2012. (Source: FXEmpire, October 25, 2012.)
Why are investors starting to prefer silver over gold?
Gold has become expensive for an average investor to own in physical form. But for big players like central banks, it’s still the only way … Read More
Gold bugs are feeling the pain, as precious metals continue with their slower-economic-growth correction. As well, the prospect of action on the Europe debt crisis is tempering the marketplace’s appetite for gold futures. My view is that gold and silver continue to represent some of the most attractive assets going forward over the next several years. We’re in a market where new trends take a long time to develop and we’ll likely see the spot price of gold trade around $1,600 an ounce for quite a while yet.
It’s pretty difficult to get enthusiastic about the stock market with sentiment so focused on the sovereign debt situation inGreece. Even in the face of solid earnings expectations for the third quarter, investors are looking into the future and seeing slow economic growth, translating into slower earnings. It’s the perfect storm for equities and it makes choices for equity investors very limited.
The recent stock market selloff was due to the U.S. Federal Reserve saying that the domestic economy faces some serious challenges over the next year. The central bank didn’t take much in the way of new policy action, because there isn’t much left their toolbox. Interest rates can’t go much lower; therefore, the economy is on its own.
|Trailing 12-month EPS for Dow Jones companies (Most Recent Quarter)||$988.36|
|Trailing 12-month Price/earnings multiple (Most Recent Quarter)|
|Dow Jones Industrial Average Dividend Yield||2.39%|
|10-year U.S. Treasury Yield||2.72%|
Dear Reader: There is no magic formula to getting rich. Success in investment vehicles with the best prospects for price appreciation can only be achieved through proper and rigorous research and analysis. The opinions in this e-newsletter are just that, opinions of the authors. Information contained herein, while believed to be correct, is not guaranteed as accurate. Warning: Investing often involves high risks and you can lose a lot of money. Please do not invest with money you cannot afford to lose.
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