Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold, Silver & HUI Stocks Big Pictures - 28th Sep 20
It’s Time to Dump Argentina’s Peso - 28th Sep 20
Gold Stocks Seasonal Plunge - 28th Sep 20
Why Did Precious Metals Get Clobbered Last Week? - 28th Sep 20
Is The Stock Market Dow Transportation Index Setting up a Topping Pattern? - 28th Sep 20
Gold Price Setting Up Just Like Before COVID-19 Breakdown – Get Ready! - 27th Sep 20
UK Coronavirus 2nd Wave SuperMarkets Panic Buying 2.0 Toilet Paper , Hand Sanitisers, Wipes... - 27th Sep 20
Gold, Dollar and Rates: A Correlated Story - 27th Sep 20
WARNING RTX 3080 AIB FLAWED Card's, Cheap Capacitor Arrays Prone to Failing Under Load! - 27th Sep 20
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelerting Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold and Crude Oil, Two MUST-OWN Investments!

Commodities / Investing 2009 Nov 10, 2009 - 03:51 PM GMT

By: Larry_Edelson

Commodities

Best Financial Markets Analysis ArticleI put out my first major buy signal in gold in early 2000, when gold was trading at about $260 an ounce. I said then that gold was an easy double, moving to at least $500 over the next two years.

I told my readers to add to their gold positions in October 2004, when gold crossed above the $400 level …


And again in September 2005, when gold blasted through $450 an ounce.

I added again, even telling subscribers to increase their core gold allocation from 10% to 25% — in September 2008, when gold closed above the $860 level.

Now, gold has thrust to within an eyelash of the $1,100 level. But gold has much more to go to the upside. My minimum target: $2,300 an ounce, with a very high probability that the yellow metal will ultimately exceed the $3,000 level, and perhaps move as high as $5,000.

Why Gold Is Poised to Rocket Much Higher

For centuries, gold has maintained a basically stable value in terms of purchasing power. That’s why investors pile into it whenever other markets look shaky.

Gold is real money. Unlike stocks or bonds, gold has no debts, no earnings, no boards of directors, no funny accounting statements, and no obligations to anyone but itself.

Gold is the purest investment in the world. While paper money can be printed or devalued at will, as is happening now ad infinitum, the same cannot be said for gold.

All the gold ever mined can fit into a 62.3 foot cube!
All the gold ever mined can fit into a 62.3-foot cube!

Of course, there isn’t much gold to go around. All the gold ever mined in the history of the world (about 151,000 metric tons) can fit into a cube measuring only 62.3 feet on each side. And gold production is declining despite today’s elevated prices.

Just one example: Over the last 10 years, gold production in South Africa has plummeted more than 50%!

So, the way I see it, plunging production, rising demand — and a severe lack of investor confidence in the U.S. dollar — add up to one thing: much higher gold prices to come.

It’s why China has been buying gold.

And it’s why India recently purchased 200 metric tons of gold from the International Monetary Fund (IMF) for $6.7 billion.

That’s more than 7.054 million ounces of gold, now worth over $7.37 billion.

And it’s why, for me, gold is absolutely the most important asset to own going forward.

If you haven’t already followed my recommendations in gold, it’s not too late: Here are four primary ways to grab your stake in the only lasting form of real money there is on the planet …

First, buy bullion. For small amounts, a convenient vehicle is one-ounce and 10-ounce gold ingots. But don’t go overboard or else you’ll find yourself with transport and storage issues. For more details on how to buy physical gold, see my October 5 column.

Second, consider the SPDR Gold Trust (GLD) exchange-traded fund. Each share represents 1/10 of an ounce of pure gold. And all the costs of storing and insuring the metal are covered for you.

Third, look to gold mutual funds such as the Tocqueville Gold Fund (TGLDX), U.S. Global Investors Gold and Precious Metals Fund (USERX) and U.S. Global Investors World Precious Minerals Fund (UNWPX). You can pack them away, with a view toward holding them for at least a couple of years. In my view, these funds could double, triple, even quadruple, over that timeframe.

Fourth, invest in select individual gold stocks. But be careful here. The irony of today’s bull market in gold is that some gold mining companies may actually go out of business as the price of gold soars.

Reasons: Some still hedge too much of their gold production and/or reserves. Others don’t have access to adequate capital financing. As I always remind my Real Wealth Report subscribers, you need to be very selective when it comes to gold shares.

But Gold Is Not the Only Hard Asset You Should Own …

Not by a long shot. I believe every investor needs to follow what the world’s biggest company — with the world’s largest cash flow and biggest profits — is doing. Yes, I’m talking about CHINA.

Indeed, while the rest of the world has been consumed by the global financial crisis, China has been reaching into its deep pockets and circling the globe to corner much of the world’s oil supplies.

China is in the process of cornering a large portion of global oil supplies.
China is in the process of cornering a large portion of global oil supplies.

Its deals are growing more ambitious as Beijing outsmarts the rest of the world and looks to meet its burgeoning oil demand. In the past decade, China’s oil consumption has doubled to 8 million barrels a day.

And it’s estimated that it could easily double again in the next decade as the number of Chinese joining the ranks of the middle-class swells.

China has now ventured into …

Arrow  Kazakhstan, to build a 3,000 km pipeline to bring oil back to China.

And it will grab up to 20% of Russia’s exports by the end of 2009 when the pipeline is linked with fields near the Caspian Sea.

Chinese controlled oil output in Kazakhstan is now at about 300,000 barrels per day (b/d) — more than one-quarter of China’s total foreign production.

And to further tighten its grip on the region’s oil, China recently gave Kazakhstan a $10 billion loan repayable by future oil supplies and equity in a Kazakh oil producer.

What’s more, China’s sovereign wealth fund recently bought 11% of KazMunaiGas Exploration and Production, which is majority owned by Kazakhstan’s state oil company.

Arrow  Sudan, where China produces about 225,000 b/d.

Arrow  Angola, where since 2007, China has been importing about 18% of its oil needs.

Arrow  China also has agreements with countries such as Burma, Iran, and Guinea, but that satisfies only a fraction — 14% — of what China needs through its overseas production.

Beijing still has a lot of oil to secure. And its three main state oil companies — CNOOC, CNPC, and Sinopec — are going toe to toe with the big boys to do just that …

Arrow  CNOOC has proposed to buy 6 billion barrels of Nigeria’s oil reserves — much of which is from soon-to-expire contracts that belong to the western oil majors.

The company also recently announced it would compete with ExxonMobil to gain control of almost a quarter of Africa’s largest offshore oil field, Ghana’s Jubilee field.

Arrow  In March, Sinopec made the biggest Chinese oil takeover of the year when it spent $7.6 billion to buy Swiss company Addax, which has operations in Nigeria, Gabon and the Kurdish region of northern Iraq.

Arrow  Last week, CNPC, China’s largest oil and gas producer and supplier, teamed up with British Petroleum (BP) to develop Iraq’s Rumaila oil field, bringing the field’s oil production up from 1 million b/d to 3 million b/d — ultimately giving China a stake in 37% of the production or over one million b/d.

My view: Like gold, everyone should also have a core stake in black gold, oil. So if you haven’t already followed my oil recommendations, it’s not too late here either.

Here are four primary ways to get your stake in black gold …

1. The Energy Select Sector SPDR (XLE), an ETF comprised of the world’s top oil and gas exploration and production companies. Recommended previously in this column at the $42 level, XLE is now trading over $56 a share, for more than a 34% gain.

2. The iShares S&P Global Energy Sector Index Fund (IXC). This ETF invests at least 90% of assets in the underlying securities of the S&P Global Energy Sector Index. Since recommended in early August, this ETF is up almost 8%.

3. PetroChina (PTR), one of the leading Chinese energy conglomerates, a must-own for the long haul. Previously recommended in this column at the $86 level, PTR is now trading at about $125, for a 45% gain.

4. CNOOC Ltd (CEO), another leading China oil and gas company, and another must-own for a core holding in energy. Previously recommended at the $107 level, CEO is now fetching more than $153 a share, for an open gain of better than 42%.

I suggest all be bought now, if not owned, and held for the longer-haul, along with my gold recommendations.

Best wishes,

Larry

P.S. To get all of my specific gold and oil recommendations the moment I pull the trigger, subscribe to my Real Wealth Report. It will be the best money you ever spent, guaranteed!

This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules