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Global News

The proposed with Western Potash to pay the City of Regina millions for its waste water, took a small step forward Tuesday. 

With a new mine planned to open in 2016 southeast of Regina, the city stands to earn over $225 million over 45 years for its waste water.  

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BY TERRENCE MCEACHERN, LEADER-POST

The City of Regina is prepared to enter into a 45-year, $228-million deal with Western Potash Corp. to supply recycled water to the company’s anticipated mine site near Gray.

On Wednesday, the city’s executive committee recommended the proposal and sent the matter to the June 25 city council meeting for final approval.

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by Marc Davis - BNWnews

“Bigger is better” is a bit of boastful bravado that proud Texans are renowned for proclaiming, often with a genteel southern smile. After all, the ever-industrious citizens of this sprawling, oil-rich southern state like to do things on a grand scale.

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CBC News

WATCH VIDEO >>

Posted by Wealth Wire

The debt-based monetary system creates an illusion of wealth. It allows for claims on real goods to significantly exceed the actual amount of real goods. You then have a number of people believing they have wealth, since they have claims (pieces of paper or tokens) showing that they have these real assets, whereas, in reality, if everyone was to claim the real goods, there would not be enough to go around.

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Interview With Ted Butler

Ted Butler is one of the better-known silver analysts (and longtime silver bulls) in the world. The founder of Butler Research, a monthly publication focused on precious metals, Butler has been pounding the table on silver since way back when it was trading for $4/ounce.

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By Marc Davis, BNWnews.ca

With potash prices spiking higher in response to surging global foods costs, the world’s most advanced “independent” potash project is in the cross-hairs of an increasing number of deep-pocketed suitors.

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Author: Brian Sylvester

Austerity programmes across Europe, continued debt problems in the US and further political uncertainty all point to a continued uptrend in gold prices, says Brien Lundin. A Gold Report Interview.

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By Michael Brush, MSN Money

Recent dips are giving us another chance to get in on the great gold rush. The factors driving the metal higher -- broken governments and fragile economies -- aren't going away.

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Author: Lawrence Williams

Speaking at GATA's sold-out Gold Rush conference in London, Eric Sprott affirmed his strong views on gold and his even more positive thoughts on silver.

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Edmund Conway

That's right: come Monday morning we will have managed to survive four decades of fiat money – though, given the chaos in markets in recent weeks, it is anyone's guess how much longer it will last.

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By Myra P. Saefong, MarketWatch

SAN FRANCISCO (MarketWatch) — Silver has always been seen as less precious than gold, but it has certainly proved itself worthy of investors’ attention — and demand for it as a hedge against the world’s financial woes is likely to grow.

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Edmond J. Bugos

After launching the Shanghai Gold Exchange in October 2002, the exchange’s principals announced a three-part plan to liberalize trading: 1) establish a deferred delivery service (as physical transactions are settled pretty much the same day); 2) create gold-related investment products in order to promote domestic investment demand and create liquidity; 3) integrate the exchange into international markets – which includes expanding import/export licenses and allowing foreign entities to become members.

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Author: Amanda Cooper (Reuters)

Analysts believe that gold stocks could well take the upper hand after a long period of underperformance in relation to physical bullion as the flow of cheap money from the U.S. slows

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By The Economist

Striking gold is generally considered a slice of good luck. Owning it, however, is a sign that you fear the worst. Some people buy the yellow stuff because they think it looks pretty, to be sure. But the quintessential gold bug is an investor who expects every form of paper wealth to collapse, along with civilisation itself.

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By Marc Davis, www.BNWnews.ca

Though Nevada’s world-famous gold fields have historically yielded over 150 million gold ounces, they are still proving to be geologically fertile hunting grounds for exploration-minded junior mining companies. Two good examples are Auex Ventures and Fronteer Gold.

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By David Galland, Casey Research

While there are many reasons that gold and silver are going to keep moving higher as the fiat currencies trend lower, at our recent Casey Research Summit in Boca Raton, faculty member Mike Maloney pointed out a fact that, while obvious in hindsight, I had never heard mentioned previously.

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Author: Fayen Wong
SHANGHAI (REUTERS)  -

London specialist consultancy GFMS reckons Chinese gold imports could exceed 400 tonnes in 2011 with silver, too, expected to exceed domestic supply.

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By William Mbaho, BNWnews.ca

Heightened global demand for vanadium especially from China, is prompting the global steel industry to aggressively seek out new supplies, especially in the U.S. where this 21st century metal is becoming increasingly indispensible. Even U.S. President Obama is championing this metal’s promise for green energy applications.

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Author: Geoff Candy

The yellow metals performance in the face of silver's washout last week was rather impressive and an addition to the factors why UBS expects gold to continue going higher this year.

Gold's performance last week, in the face of a drop of around 30% in the price of silver was rather impressive and, could be an indicator of things to come.

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By Marc Davis, www.BNWnews.ca

The quest to commercialize one of Latin America’s last undeveloped major gold deposits is one major step closer to a prospectively big pay day for its unlikely owner – a small gold explorer named Exeter Resource.

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By Debbie Carlson 
Of Kitco News 

After a sharp drop in prices this week, the outlook is hazy for precious metals price direction, but some analysts believe the metals could see the slide ending next week, at least for gold.

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Author: Lawrence Williams

Some observers think gold is in a bubble, but silver has been rising far faster. Can this momentum be maintained or is now the time to take at least some profits as the price closes on $50.

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Author: Jan Harvey (Reuters)

Silver rose to its strongest since 1980 and Gold hit five week highs on the back of growing unrest in the Middle East

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By Marc Davis, www.BNWnews.ca

Silver promises to become the next big buzzword among investors in 2011 and beyond, according to one of the investment industry’s most prescient and successful experts on precious metals.

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Jason Hamlin


There are some bizarre things going on in the silver market at the moment, reminiscent of the supply shortages and high premiums witnessed in 2008. For starters, silver is currently in both short-term and long-term backwardation, suggesting there is higher demand for silver NOW than in the future.

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The Economist

Rising commodity prices both reflect and threaten the world’s economic recovery.

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Ryan Jordan

Cheap, Industrial Silver is an illusion

From the beginning of the financial crisis in 2008, contrarian investors began murmuring about getting into gold and short term Treasuries. It was almost a mantra: gold and Treasuries… gold and Treasuries. Something missing?

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The Economist

Commodity prices are surging at a very early stage of the cycle

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By Frank Holmes

Wall Street has been calling gold a bubble since 2005 when it hit $500. Some media naysayers remained negative even as they wrote the headlines proclaiming record highs and saw gold rise almost 30 percent in the past 12 months.

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Gold Stocks to Outpace Bullion Post QE2

Author: Amanda Cooper (Reuters)

Analysts believe that gold stocks could well take the upper hand after a long period of underperformance in relation to physical bullion as the flow of cheap money from the U.S. slows

Gold's performance has eclipsed that of gold mining stocks this year, but gold equities now are likely to take the upper hand as the flow of cheap U.S. cash slows and miners boast juicy margins and good growth prospects.

Gold's status as a quasi-currency and safe haven has helped pushed the price of the metal up about 20 percent since the start of the year to above $1,520 an ounce, making it one of the top performing asset classes of 2011.

That compares with an 8 percent drop in the ARCA Gold Bugs index, which includes shares in some of the world's largest gold miners.

The U.S. Federal Reserve's $600 billion bond-buying program, which has kept down interest rates and the dollar; the disaster in Japan and the violence in the Middle East, which have shaken investor confidence; and evidence of sluggish U.S. growth and concerns about China have all boosted gold but dented global stocks. And gold shares have not been immune.

Now that the Fed's easing program has come to an end, Japan is recovering and China has managed to stave off some of the biggest fears about price pressures, there is some doubt that gold can keep up that strong performance.

Gold stocks, meanwhile, are supported by a gold price near record highs and may benefit from improving sentiment for equities markets. They also appear relatively cheap at the price.

Catherine Raw, who helps manage BlackRock's $4.7 billion Gold & General Fund, said the rise in the gold price has outpaced cost inflation in the industry, meaning that gold miners are likely to see their margins and their profits increase this year.

"I, as an investor, would say that in the end, given that believe the world isn't going to collapse, while there maybe a good few months of volatility left, if you're prepared to be patient, then I would see now as a very good buying opportunity," she said.

"The fundamentals of gold companies have improved, and yet their shares have fallen, and you've seen valuations now much more comparable to the rest of the mining sector. So you're not having to pay a ridiculous premium as you would have done say five or six years ago, and yet margins are growing significantly, in a way that they weren't five or six years ago," Raw added.

VALUE SHINES

Shares in Barrick Gold, the world's largest gold miner, trade at nearly 14 times anticipated earnings, while second-largest Newmont and third-largest AngloGold Ashanti trade at roughly 12 times expected earnings.

This compares with base metal producer BHP Billiton, which trades at nearly 17 times expected earnings, or Anglo American, which trades at 40 times earnings.

HSBC Global Asset Management, which recently unloaded most of its holdings of physical gold in favor of gold shares, said gold equities are two-thirds shares and one-third gold price.

An environment of uncertainty, negative real interest rates and turbulent stock markets will cause gold equities to underperform, even while they benefit from a rise in the gold price, HSBC said.

Historically, gold has outperformed gold mining shares in times of financial market stress and instability. The ARCA Gold Bugs fell by 29 percent in 2008, the low-point of the global financial crisis, while the gold price rose by 6.05 pct.

The index fell 44 percent in 2000, when the dot.com bubble burst, while spot gold fell by just 6.3 pct in that time.

But over the past 10 years while gold has been consistently rising, for a gain of over 400 percent, the Gold Bugs index has risen by 770 percent.

Daniel Sacks, who co-manages Investec's $750 million Global Gold Fund, said gold miners are generally looking much healthier than they did in 2008, because many have issued equity to cancel out debt.

He added that gold miners, as a rule, tend to avoid taking on debt as their lenders encourage them to hedge their future production as some form of guarantee.

"They still don't compare to high-yielding industrial or financial stocks, but compared to their history, gold shares are yielding a lot more than they used to. It's just an indication of the width of their margins," Sacks said.

Sacks said gold equities tend to outperform in the northern hemisphere summer months, largely because of the lull in consumer buying of physical gold. This was not the case last year when the eruption of the euro zone debt crisis prompted an investor push into gold and out of equities.

In summer 2009, however, gold rose 7.7 percent compared with a 31 pct rise in the Gold Bugs index. In 2007, as the extent of the credit crunch was becoming apparent, gold rose 12.6 pct between June and September, while gold stocks gained 18 percent.

"After a rip-roaring 2010 as the metal went mainstream, gold has become the gift that has stopped giving for some investors," said JPMorgan Chase in a recent note. "We feel gold still has a very significant role in portfolios. However, it has become apparent that the metal and the equities act differently."

The U.S. bank added, "Gold equities will remain under pressure while investors remain fearful. Once investors feel that the risk of another leg down in general markets passes, or after a downswing in the markets, we feel the gold equities will do some catching up."

(Reporting by Amanda Cooper, editing by Jane Baird)