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Wednesday, April 8, 2009

How to Squeeze Four Times More Profit from Gold?

In January of 2001, the price of gold was $265.49 an ounce...

So far this year... gold has reached $1,005 - up nearly 380% in 8 years.

But what if I told you that the real money won't be made in gold... but in an investment that has already posted returns 4 times greater than gold itself?

And that with a few simple changes to your portfolio, you can position yourself - right now - to take advantage of one of the great market run-ups of all time?

Make the right moves now - before the rest of the market - and you could easily be looking at profits of 200... 300... 400... even 500% - and more - without owning a single ounce of gold.

You can be raking in these impressive profits from one of the easiest and most direct ways to take a stand in this runaway gold bull market.

It's simple - you don't have to be an economist to figure this one out

It's safe - with a consistent record of strong performance

It's easy to trade and highly liquid - you can buy and sell on the major exchanges with a basic brokerage account

And the amazing thing is... what can make this so profitable for you... is that in the midst of all the market carnage, this investment has just begun to pick up steam again...

We call it BIG GOLD: shares of established, producing, large-cap gold mining companies.

These companies are sitting in the catbird seat for one of the most impressive bull markets to hit the gold markets - ever.

Taken all together, they control the largest and most productive gold mines in the world - responsible for much of the gold produced today.

But here's the amazing thing: the major move in these gold stocks hasn't even happened yet... for a couple of reasons.

There is often some lag-time between the beginnings of a gold bull market and a gold mining bull market... this lag is usually attributed to the inherent costs of running a working mine.

And this time around, the lag has been made even longer thanks to the general downturn in stock markets, tamping down interest in shares of gold mining companies - simply because they are stocks.

Gold in the News

Going for gold - in search of safety "We think we are seeing the end of the US dollar...and investors are reacting by shifting out of dollars and into the safety of gold," says Giles Conway-Gordon, managing partner of Cogo Wolf Global Strategy Fund. "...institutional and private investors are heading for gold as a safe haven..."

Keep an eye on gold mining stocks
"... it's been nearly impossible to buy gold, at least at anything resembling the alleged 'spot' price. When you can't buy gold... that's your signal to buy gold miners."

"The democratization of gold speculation outside traditional Western financial centers has the potential to magnify the already strong appeal of gold as a hedge against global recession, inflation or just general uncertainty.

Investors world-wide shifted billions of dollars into new gold investments last year, fueling a 31% increase in the price of bullion on the Comex division of the New York Mercantile Exchange, the world's most important gold market."
The Wall Street Journal, 1/19/08

Incredible Demand from the World's Gold Exchange Traded Gold Funds.

The gold ETFs are swallowing up huge amounts of the precious metal... and their appetites get more and more voracious every day.

One ETF alone, SPDR Gold Shares (GLD), holds more gold in reserve than the European Central Bank, the Netherlands, Russia, or China. In fact, if GLD were a central bank, its reserves of gold would make it the 7th largest bank in the world.

"I'll say it again: gold is not just going through the roof; it's going to the moon."
- Doug Casey, international investment expert, NY Times best-selling author and founder of Casey Research

"If one percent of the global value of stocks and bonds - roughly $960 billion - went into gold, the precious metal would skyrocket. Thinking of prices well above $10,000 per ounce would suddenly become rational."
- Shayne McGuire, author and investment expert

"If you don't already have a substantial share of your equity portfolio in energy resources, precious metals & base metals, do some switching into them now."
- Kenneth Rogoff, Professor of Economics, Harvard University

Growing Global Demand Driving the Current Run-up in Gold Prices...

In 2006, India bought 20% of all the gold produced in the world... and demand rose by 50% during the first quarter of 2007 alone

China has just become the world's second largest gold consumer... just behind India... with demand rising 20% in just one year.

China just opened up an exchange for gold futures... and with the softening of the Chinese stock market, China's wealthiest investors will be pouring money into the gold market... further driving up the price

And the Same Kind of Demand Is Growing All over the World

Gold sales in Turkey have risen 25% from last year

The United Arab Emirates saw gold sales increase by 26% in one month alone

Russia recorded its highest-ever level of demand for gold jewelry

China's gold demand has already risen 20% over 2006

How Are the World's Big Gold Mining Companies Performing?

Since the beginning of gold's big bull market, some of the biggest gold mining companies in the world have seen some handsome 5-year gains...

Kinross Gold -
up 1,131.2%

Yamana Gold -
up 835.8%

Goldcorp - up 550.9%

Agnico-Eagle Mines -
up 369.9%

Harmony Gold -
up 216.1%

AngloGold Ashanti -
up 214.9%

Newmont Mining -
up 201.5%

Gold Fields - up 200.7%


 

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The stage is set... and there has never been a smarter time to make the move into Big Gold shares.

Here's why:

The price of gold is once again outpacing mining expenses... and mining companies are enjoying a major increase in the value of their holdings. For a company with 20 million ounces proven in the ground, every time the price of an ounce of gold goes up 10 dollars - the value of their ore goes up $200,000,000. And gold has gone up almost 30 times that amount in the last year alone.

Combine that with the fact that global demand for this precious metal is growing more ravenous every year.

And as stock markets around the world continue to crash and burn - large institutional investors, like mutual funds, are going to need to find safety and performance... and they'll be moving mountains of cash into gold mining firms.

But if that's not reason enough to be excited about the real profit potential from gold stocks, consider this:

Since its low in 1999, the price of gold bullion is up about 250%. But the American Stock Exchange index of gold stocks is up 1,235% - in the same bull market. That gives you an incredible leverage of more than 4-to-1.

To equal the old record set in 1980 ($850 an ounce) in today's dollars - gold will have to trade at over $2,200 an ounce. That's 221.5% higher than the recent close near $993.

So, if gold goes up 221.51% to $2,200 an ounce... and gold mining shares historically outpace gold by a 4-1 margin...

You could be looking at potential profits of 886%...

Every $10,000 you invest in these select gold mining stocks could turn into $88,600.

That's a rate of return of nearly 9-1.

What would that kind of return do for your portfolio? For your retirement? For the kids' college fund? No matter why you invest, returns like these would be a real shot in the arm for your personal bottom line.

But here's the thing - I said earlier that these stocks historically outpace the price of gold by as much as 4-to-1.

But this ratio has been turned around recently, because of the massive sell-off in stocks over the last months. Shares of these big gold-producing companies got hammered along with the rest of the market last year.

Gold's recent run-up has not been matched by the gold-producing companies. Not yet.

But when the gold/mining stock ratio begins to correct itself, these companies are in position for a terrific windfall.

Many of my favorite picks have been down over the last few months, but I still consider big gold companies the star performers in the mining sector.

And they're trading at exceptional values right now:

This company is currently off about $8 from its 12-month high... but it's still one of the great work horses of the big gold stocks... that will come through again... Right now, this stalwart stock has already bounced back over 12 dollars from its recent low of $6.85... and is a steal at about $16.00 a share

This stock has been an excellent and consistent performer - but right now, it's off almost $30 from its 52-week high, but at around $54.00, it's up over 100% from its lows... and is still a screaming bargain right now.

This metals producer, with holdings in Brazil, Argentina, Chile, Mexico, and Central America, has almost tripled in value since its November '08 low... but at $8.50+, it's trading at less than half the price of its 52-week high.

Why gold stocks will be rallying - and will continue to for some time.

There are a lot of reasons why I feel gold stocks are coming on strong... and that this rally is the beginning of a major swing back. But here are my top 5 reasons:

The price of gold has shot back up to record-setting territory again... consistent with the way gold should be behaving in the midst of all the market mayhem. And it's been outperforming the S&P. Take a look at this chart:

Outrageous government spending is flooding the world with trillions of dollars that didn't exist a year ago. And when the deflation ends, hyperinflation is going to begin and come crashing in like an enraged rhinoceros. When that happens, gold will catapult to new heights - and the gold stocks will soon follow.

As gold races up, the market is crashing down... and as gold prices rise, the gold stocks will be decoupling from the general market. As this happens, if you're invested in these stocks, you'll enjoy a ride like never before... As I said before, gold stocks have traditionally outpaced gold by 4-to-1, or more. And we could easily see that happening again.

Demand for gold is at an all-time high around the world - and there's no way to artificially grow the supply of gold. Gold isn't like currency - it can't be created out of thin air. You have to dig it up and extract it from the ore. And the large-cap mining companies are the best at getting the stuff out of the ground to meet growing global demand.

As gold rallies back, large institutional investors and hedge funds will be looking to reestablish their positions in gold stocks - and they'll be doing it at bargain basement prices. Once this migration back into gold begins, you can expect to see an even bigger run-up in the gold producers. And we're already seeing signs that this run is beginning for real.

So let me ask you a question...

When do you want to be buying gold stocks?

Before the large institutional investors move back into the sector and drive the price up again?

Or after the prices are off the charts and through the roof?

Naturally you want to get in before the prices go up.

Unfortunately, many investors will do the opposite. They'll sit it out until the prices are sky-high - and then they'll buy.

Why? Because average investors are herd animals. They want in when everyone else is in, and they want out when everyone else wants out.

This is why average investors lose money time and time again in the market. They follow the herd and not their heads.

My name is Jeff Clark, one of the managing editors with Casey Research.

If you're looking for reliable, consistent, and realistic recommendations for the best plays in the gold market... right now... there has never been a better time to discover BIG GOLD - the newsletter from Casey Research.

We launched BIG GOLD in April of 2007, to give you a place you can turn every month to find the latest trends and the smartest gold picks.

Casey Research has been discovering and recommending the best-performing, fastest-moving, smartest, and shrewdest plays in the natural resources marketplace since 1979.

And in each issue of BIG GOLD, you benefit from the years of experience and insight that comes from one of the premier research companies in natural resources and precious metals.

Discover in every issue:

Concise and fast-reading analysis of the economic forces driving today's accelerating gold prices.

In-depth investigations into the world's leading gold mining companies... proven companies with developed, producing, or near-producing deposits.

PLUS... an insider's perspective on the best ways to assemble a precious metals portfolio and squeeze out risk.

Which stocks you should buy right now

Which stocks to sell ahead of the crowd... and when

Which gold stocks to avoid... and why

And much, much more... the best precious metals funds... the pros and cons of gold ETFs... and all the breaking news that has a direct impact on your precious metals investments.

And it's all yours, every month, in BIG GOLD...

Research you'll never hear on MSNBC or read about in Money magazine... the real, "behind the scenes" information from one of the world's leading teams of resource professionals.

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In this report, you'll learn about:

Gold as hedge against the dollar

How inflation will impact gold

The historical significance of gold markets

The 4 best places to buy physical gold

Pooled Gold accounts � And the 5 best ways to get started with them

Paper Gold � and the 3 best ways to buy into it

Gold stocks � the good, the bad and the ugly. What to look for… what to watch out for.

Junior miners set to take off

Favorite BIG GOLD stocks.

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