Many gold and silver mining companies struggled on the stock market this year, due to the swing in spot prices and the rising costs of production. Very few producing miners have done well on the stock market this year, whereas most did well in 2011
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New York, NY; Washington, DC; Los Angeles-Long Beach, CA; Chicago, IL; Houston, TX (PRWEB) November 30, 2012
In a recent article published by Profit Confidential, an e-letter of Lombardi Publishing Corporation, a 26-year-old consumer publisher that has served over one million customers in 141 countries, financial analyst Mitchell Clark gives the expert advice that, in the face of artificially low interest rates and huge increases to the U.S. money supply, investors should consider adding gold and silver trust exchange-traded funds (ETFs) to their portfolio.
Clark reports that spot silver prices have been on the rebound. The commodity started 2012 strong, closing in on $38.00 an ounce, only to retreat with gold prices over the summer and consolidate. Recently, however, the price of silver has climbed to the $34.00-per-ounce level, and $35.00 an ounce could be just around the corner, with gold prices now holding around $1,750.
The Profit Confidential expert observes: “Many gold and silver mining companies struggled on the stock market this year, due to the swing in spot prices and the rising costs of production. Very few producing miners have done well on the stock market this year, whereas most did well in 2011.”
“If you’re a gold (and silver) bug, there’s a lot to be said about an instrument like the SPDR Gold Shares…, which is a gold trust exchange-traded fund (ETF). Held in the form of 400-ounce gold bars, the gold itself is kept in vaults stored in London and is currently valued at approximately $75.0 billion,” says Clark
Clark notes that SPDR Gold Shares have a great long-term track record. Back in 2006, it was trading near $60.00 a share, moving to $70.00 in 2007, and $120.00 by 2010. It hit a high of over $180.00 a share when spot gold peaked in 2011. SPDR Gold Shares is currently trading around $170.00 a share.
According to Clark’s expert opinion, one of the better ways for most investors to be long on gold or silver is through an ETF. Investment risk is compounded if an investor is speculating in individual mining companies; it is also compounded if investors hold the physical commodity in their own homes.
The Profit Confidential expert states that there aren’t a lot of reasons why either gold or silver prices should go down from their current levels. Certainly, if demand for jewelry in Asian markets was to dry up, spot gold would take a hit. But, that doesn’t seem likely, as more and more Asian consumers become middle-class consumers.
Clark adds, “I don’t know when, but someday, all this monetary stimulus, in the form of artificially low interest rates and huge increases to the U.S. money supply, is going to impact consumers and investors in unforeseen ways. Most argue that gold will benefit with rising inflation, but a weaker U.S. dollar will also be a major catalyst.”
“Most investors should already have some exposure to gold and silver as part of a balanced investment portfolio. Western economies aren’t growing faster than the rate of inflation, but gold and silver prices are solidly holding up. This tells me that futures speculators are waiting to bid these commodities much higher in price. All that’s required is a catalyst, and I think we’ll get one next year,” he concludes.
Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com. Or, visit http://www.lombardipublishing.com/customer-service.html.