Thoughts on Markets

Monday, May 24, 2010

Metals Moving Upward - Demand High



Both of our precious metals are moving higher today with the great demand for physical metals. In spite of the action of the boyz, the demand remains very high. We are seeing small investors buying coins from the mint. By the way, if you shop flea markets and garage sales, you may run across some pre-1965 junk silver dimes and quarters. These are often a good buy for pocket change. The spot value of the silver content in these coins can be easily estimated using the following formula: Spot Price of silver X Face Value of the coins X 72% = Spot Value of the silver content. Good formula to commit to memory.


From Bloomberg.com:

Gold Rising as Euro Weakens Spurs More Speculation

May 24 (Bloomberg) -- Speculators are buying gold faster than the world’s biggest producers can mine it as analysts forecast a 27 percent rally that may extend the longest run of annual gains since at least 1920.

Exchange-traded products backed by bullion added 41.7 metric tons in the week to May 14, the most in 14 months, data from UBS AG show. China, Australia and the 15 other largest mining nations averaged weekly output of 41.6 tons last year, researcher GFMS Ltd. estimates. Even though prices have fallen 5.1 percent to $1,185.30 from a record $1,249.40 an ounce May 14, the median in a Bloomberg survey of 23 traders, analysts and investors shows it will reach $1,500 by the end of the year. Read it HERE.

From SeekingAlpha.com:

Emerging Market ETF Inflows Drop in Flight to Quality

In uncertain times, people engage in the time-honored tradition of “flight to quality.” U.S. investors are forgoing riskier assets like emerging market ETFs, and instead are sticking to the “safety” of government bonds and gold.

According to Blackrock, European investors have thrown $3.25 billion into emerging-market ETFs in the first four months of the year while U.S. investors have slowed investment inflows to just $1.5 billion, compared to $27 billion for the whole of 2009, writes Alex Dumortier for The Motley Fool.

Asset manager GMO calculates that emerging market stocks will earn an annualized after-inflation return of 4.7% over the next seven years. Though, that number is 2% less than the long-term historical real return of 6.5% in U.S. stocks, and emerging markets are also associated with higher volatility. Read it HERE.

From TheStreet.com:

Gold Prices Rise Amid Jittery Markets

NEW YORK (The Street) Gold prices Monday were rising as investors opted for the safety of the precious metal and sold out of stocks to buy gold.

Gold for June delivery was adding $7.40 to $1,184.90 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Monday has traded as high as $1,119.10 and as low as $1,176.80. The U.S. dollar index was rising 1.16% to $86.36 while the euro was slumping 1.80% to $1.23 against the dollar. The gold spot price Monday was adding over $6, according to Kitco's gold index. Read it HERE.

The miners from Scottrade.com:

The currencies from Kitco.com:

Note that the miners are all in the green this morning as prices of the metals rise. It seems that more folks are beginning to see the fraud of paper currencies which plague us. Here are some prices early this morning: BYDDF 7.53; FVITF 1.96 (That's below $2 and in a tempting range for me); TLT 98.72 (Means that bonds are up a bit.); TBT 38.45 (Short on banks is down.); DOW is down 85.48 to 10107.81 (Were the DOW to close below 10000, there is little resistance below that figure and the bottom would likely drop out.); Gold up 10.60 to 1187.40, and Silver up 0.18 to 17.82.

Here is a graph on Fortuna Silver (FVITF):

Rest in the fact that the Lord is in control in spite of what you see about you. I am avoiding the general market and concentrating upon precious metals, mining stocks, and some cash. This is my current plan which has been committed to the Lord and I am waiting patiently (more or less) for His assurance that the plan is correct and for His results. We must always remember that He works in accordance with His divine plan and not ours unless ours is in total concert with His. His timing and results are always the best.

Best to each, Doug





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