Ahad, 26 Disember 2010


Own Precious Metals Ahead of the Price Jump

By Greg McCoach
Friday, December 24th, 2010

Gold and silver prices have remained volatile in both directions since October.

But indications from the COMEX show suggest we may see a spike in these precious metals prices next week...

As prices moved higher over the past two weeks, strong bouts of profit taking have hit the gold and silver markets in each instance, stalling the next attempt to hit another new high.

World Gold and dec 2010 gold coin small
Silver Demand
  • World investment demand for gold has increased 250% in the past ten years.
  • Investment demand for silver has skyrocketed 522% since 2007.
  • Sales of official gold coins (like the American Gold Eagle) have increased 618% since 2007.
  • World governments are hoarding silver; official sales have plummeted 83% in the past three years.
  • Gold demand for ETFs has increased 20,470% since 2002.
  • Above-ground silver supplies dropped 86% last year.
  • Industrial demand for silver has increased over the past decade, despite a 236% increase in prices.

On the downside action over the past two weeks, strong buying support has come in as precious metals prices looked like they were going to sell off — thus our current holding pattern in gold and silver prices.

This will change to the upside within the next two weeks as major buying of physical metal will need to take place in order to meet contractual obligations on the COMEX before December 31, 2010.

Contracts for gold and silver December futures that demand physical metal must be met by then.

But there appears to be a significant shortfall in the actual physical metal required to meet these demands — especially in silver...

If these contractual obligations are not met by the 12/31/10 deadline, then we could see a default scenario, which would drive the metals prices even higher and cause great instability for other markets as well.

This potential default is due to the fact that JP Morgan Chase, the largest fractional stock holder of the Federal Reserve, has been wildly shorting silver and is now caught between a rock and a hard place.

Word on the street is that JP Morgan Chase has opted to go massively long copper in an attempt to hedge their losses in silver, which could be enormous.

This is setting us up for major fireworks in the metals markets as we come down to the wire at year-end.


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dec 2010 gold chartdec 2010 silver chart

In other news, it appears we are coming to an inflection point in Europe, where the sovereign debt problems are becoming systemic.

It is now widely anticipated that we are going to see further fallout in Europe regarding countries that can no longer remain solvent...

As I've said before, Portugal, Spain, Italy, and others have been on the cusp and are soon expected to announce they can no longer cover their debt situations.

The European spending orgy has come to end and the consequences are going to be severe.

And world markets are going to be affected and precious metals prices will push higher and higher as investors seek safe haven assets.

These are extremely troubling events — not to mention the U.S. government and a majority of the states within the United States are on the same road to ruin as Europe.

Add on top of all these events the next wave of derivative problems that are soon to hit the market, and we have the making of the perfect financial storm worldwide.

Owning the physical precious metals and quality junior mining stocks is the only insurance one can have against the financial insanity that's about to be unleashed on a worldwide basis.

Get your house in order and prepare while you still can.

The paper fraud that is related to fiat currencies and ETF’s is going to be exposed as these events transpire...

And when this happens the new golden rule will be in effect: He who owns the gold makes the rules.

Good Investing,

Greg McCoach
Editor, Wealth Daily
Investment Director, Mining Speculator and Insider Alert

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