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
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20
AMD is KILLING Intel as Ryzen Zen 3 Takes Gaming Crown, AMD Set to Achieve CPU Market Dominance - 13th Oct 20
Amazon Prime Day Real or Fake Sales to Get Rid of Dead Stock? - 13th Oct 20
Stock Market Short-term Top Expected - 13th Oct 20
Fun Stuff to Do with a Budgie or Parakeet, a Child's Best Pet Bird Friend - 13th Oct 20
Who Will Win the Race to Open a Casino in Japan? - 13th Oct 20
Fear Grips Stock Market Short-Sellers -- What to Make of It - 12th Oct 20
For Some Remote Workers, It Pays to Stay Home… If Home Stays Local - 12th Oct 20
A Big Move In Silver: Watch The Currency Markets - 12th Oct 20
Precious Metals and Commodities Comprehensive - 11th Oct 20
The Election Does Not Matter, Stick With Stock Winners Like Clean Energy - 11th Oct 20
Gold Stocks Are Cheap, But Not for Long - 11th Oct 20
Gold Miners Ready to Fall Further - 10th Oct 29
What Happens When the Stumble-Through Economy Stalls - 10th Oct 29
This Is What The Stock Market Is Saying About Trump’s Re-Election - 10th Oct 29
Here Is Everything You Must Know About Insolvency - 10th Oct 29
Sheffield Coronavirus Warning - UK Heading for Higher Covid-19 Infections than April Peak! - 10th Oct 29
Q2 Was Disastrous. But What’s Next for the US Economy – and Gold? - 9th Oct 20
Q4 Market Forecast: How to Invest in a World Awash in Debt - 9th Oct 20
A complete paradigm shift will make gold the generational trade - 9th Oct 20
Why You Should Look for Stocks Climbing Out of a “Big Base” - 9th Oct 20
UK Coronavirus Pandemic Wave 2 - Daily Covid-19 Positive Test Cases Forecast - 9th Oct 20
Ryzen ZEN 3: The Final Nail in Intel's Coffin! Cinebench Scores 5300x, 5600x, 5800x, 5900x 5950x - 9th Oct 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