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Gold Investing

Tips in picking good mining stock investments

Some investors find physical gold investment very expensive, so they invest in mining stocks to get exposure in gold. While there’s no substitute for investing in wealth via the precious yellow metal, mining stocks can generate a good amount of dividends if you know how to choose a good company.

Investing in physical gold for wealth purposes has always been the choice of veteran investors. Physical gold never loses its merit as a tradable commodity, and the long-time secret of Germany’s strong economic position. In a news article by BullionVault, it was discussed that investing in physical gold lets investors use geography to spread the risk of losses — something that gold mining stocks cannot do. Germany’s original reason for holding gold in the vaults of US, UK, and France was due to fear of an invasion from the Soviet forces. While that fear has long been gone, geopolitical diversification still makes sense in case of a sudden invasion.

While there’s no way to predict the future of a mining company, you may lessen your chances of losing resources by knowing which ones have a bright outlook. Here are a few things to keep in mind as a gold mining investor.

Pick companies with low operational costs

Gold mining companies that generate a huge amount of gold every year doesn’t necessarily mean profitable in the long run. While quantity is important to gain profits, a company with low operational costs is king.

In 2013, a lot of mining companies suffered huge losses because of high operational costs and gold’s worldwide price slump. Gold prices in June 2013 were at a 3-year low, fluctuating only around $1,180 per ounce.

Look for companies with newly-discovered technology in making mining costs cheaper. AngloGold Ashanti is very attractive right now, what with their new discovery of a mining technique called Reef Boring.

Don’t underestimate the power of small gold mining companies

A lot of investors say that small companies are risky. However, little do most of them know that investing in the big ones are a tad bit riskier.

First of all, small companies are easier to manage because they have fewer projects. This means that they are able to focus all their energy and resources on small-scale mining operations and address problems quickly and cost-efficiently. On the other hand, bigwigs of large-cap companies manage a lot of mining sites around the world. While this yields a lot of quantity, they spread themselves too thin most of the time. If a problem arises (gold prices suddenly declining, no more gold to extract etc.), imagine how much work and money big companies need to shell out in order to minimize the damage in operations.

Secondly, large companies tend to focus on numbers on a quarterly basis, due to the criticisms they have to face from major news sites. When big mining companies do this, it could lead to short-term decisions that aren’t usually good for investors.

Remember, don’t always choose what everyone else chooses. Always check the mining company’s track record, if its operational costs are low, and if they’re focused on small-scale mining operations. While companies with operations around the world can be very profitable, sometimes, it’s better to stick to the “slow and steady” ones given the volatility of the precious yellow metal.

Precious Metals – Gold and Silver Price Targets

by Adam Hewison

The gold and silver markets rallied dramatically to the upside as concerns and worries over oil supplies, inflation, and general nervousness in the world markets pushed both metals into new high ground.

I have just completed a new short video where I share with you my upside target zones for gold. The video only takes a few minutes to watch and emphasizes how important technical analysis is in the gold market. Our weekly Trade Triangles have been long gold from $1,368 and it looks as though that position is going to work out well.

We also refer back to a video that I made on September 20th last year, which underscores the importance of cyclic work in the gold market and, how if these same cycles hold true, can predict with a fair degree of certainty when the next cyclic high is going to occur.

I reveal all of this in this new short video that I think you’ll find both informative and educational. Take a look at the short video here:

As always all our videos are free to watch and there are no registration requirements. If you’d like to share this video with your friends, please feel free to do so.

Free video: Gold and silver price targets

Gold Prices Today – Why isn’t gold higher with the turmoil in Egypt?

by Adam Hewison

Despite all the turmoil in Egypt and the Arab world, gold has stubbornly refused to rally. This probably causes great concern amongst the gold bugs and the folks who are bullish on gold.

As we have mentioned before many times on this blog, “perception is more powerful than fundamentals.”

While the gold bugs argue that the market is being manipulated, I am more of a realist and respect what the market is actually doing. The big question on everyone’s mind is: Why are food prices and other commodity markets soaring, while gold is dismally staying down in the $1,330 area?

Why isn’t gold higher?

MarketClub’s Trade Triangles are all Red, meaning that the trend for gold is likely to remain negative or at best move in a sideways fashion.

My best estimation at this point in time is that we are going to see more sideways action and probably some recovery from current levels. However, I would like to see some concrete evidence that the market has actually put in a low and that we will see a recovery in this yellow metal in the future.

One thing I can say, historically our monthly RED Trade Triangles have not been successful in gold. You would have been more successful fading the RED monthly Trade Triangle signal and going long gold.

Before getting, “gung ho” on this approach, you will be better off waiting for a green weekly trade triangle to kick in which would indicate that the market has probably made a low.

That is the main reason why, we recommend using the weekly Trade Triangles for trend, and daily Trade Triangle’s for timing.

In this short video, I explained what I mean and show you concrete examples of how you can use this strategy to make money.

Current Gold Prices – The big secret behind gold’s $100 collapse

by Adam Hewison

The question many investors are asking themselves today is, just what happened to the price of gold?

Did the world change? Did the problems in Europe go away? Did all the states manage to find funding to cover their deficits?

No, none of that happened, but gold still dropped $100.

It’s all about market perception and timing, two things we’ve talked about many times before on the Trader’s Blog. I don’t know about you, but I remember when gold was over $1,400 an ounce and all I could see on TV where ads from gold companies extolling the virtues of buying gold as it is real money. Since the fall, I expect we’ll see fewer of these advertisements on TV and in print.

So what did happen to gold?

Well, for starters there were some key technical levels broken. If you’re a gold trader, but not a technical trader, you really need to learn how to read charts and see what other traders are doing.

Secondly, there did not appear to be any other news to drive this market higher. When that happens, markets tend to fall under their own weight, and as many retail investors purchased gold, there was nobody on the other side of the market to support gold.

So the question is, is the move over in gold? That’s a tricky one. I want to show you in today’s video exactly how we’re looking at this very emotional market. Every time we have created a video indicating that there would be some pullback in gold, we were bombarded by the gold bugs saying that we’re crazy. When you see a market pullback as much as gold has, you have to have some respect for the market itself.

If we look at the price of gold today at approximately $1,330, it pretty much equates to what happened in the last 30 years when gold was trading at a high of $850 an ounce. If you factor in inflation over the last 30 years, gold is probably lower now than it was 30 years ago. So how good an investment is gold? I think gold is more of a barometer of fear than anything else. Clearly there are other investments in the marketplace that have better returns.

Let’s get back to gold and what we think will happen. In this short video we analyze the market using our “Trade Triangles,” the Williams%R, and the MACD indicator.

As always our videos are free to watch and there are no registration requirements. If you like what you see please comment on our blog and feel free to Tweet or e-mail your friends. I think there’s an important takeaway message in this video – what goes up, must come down.

Enjoy the video.

The #1 Reason Why Gold Collapsed

by Adam Hewison

Following the gold market as we do here at MarketClub, it was amazing that nobody, and I mean nobody, was bearish on this market. This always creates a problem as the markets tend to reverse when everyone is on one side and there’s no one else left to buy.

Another tip-off was on Fox Business News and also on CNBC indicating that gold was going to hit $1400 almost immediately. Well after Tuesday, we know what was to happen to the price of gold. If gold were so strong, should it really have gone down almost $70 in 4 days?

This is where technical analysis and Japanese candlestick charts really shine in my opinion. What happened in gold was a classic candlestick formation that any trader, whether they trade gold or other markets, should be aware of.

In this short video, I illustrate how this formation occurred and how it was confirmed the next day – and I don’t mean on Tuesday.

I also have a free candlestick book that I’m making available along with this video.