Dollar Falling Gold Rising price commodities rally silver mining production

What's different about this commodities rally is that it's not just the gold price that's up - gold equities and mining stocks in general are starting to exhibit overall growth, even the ones with known risks kinross, anglogold ashanti.

Get Used To The Dollar Falling

• A deteriorating relationship with Saudi Arabia means we might be witnessing the last days of the 'Petro Dollar' - at best this translates into even less support for US dollar denominated trade.
• China backed gold certificates issued by the BRICS fund gain traction
• The Federal Reserve The Fed losing control of situation it attempts to solve due to plunging interest rates and lack of interest in treasury notes

Diversity Is Important

• Don't limit your purchases to just one company spread it around but do favor companies that already have the infrastructure in place to produce gold since it can take a long time to develop a mine.  
• Also keep in mind that many established companies shuttered a large portion of their mine portfolio over the past few years due to declining prices
• Focus in on companies that weathered the storm and didn't resort to closing mines - in the short run they will yield the best returns.

Don't Ignore Silver

The gold silver ratio exceeded 80 for much of the last year but now with a new commodity bull run starting to take place, the ratio has already declined to 70.  Considering the recent past (10-15 years) the ratio has the potential to decline even further to below 40, leaving the possibility of a 2 to 1 return on silver verses gold.  Demand for silver remains strong but remember that central banks don't buy it - this means that global economic instability is less likely to benefit silver price and more likely to benefit the price of gold.  In the meantime make silver mining companies a priority.

Kinross Gold NYSE:KGC - has most to benefit from a new gold rally.  kept mines despite downturn in stock in recent years - weathered the storm.
iamgold NYSE:IAG - stock suffered more than competitors last five years down 85%.  key mines remain operational and showing robust growth.
Seabridge Gold NYSE:SA - 40 million ounces gold 300 million ounces silver and that's just 2P proven reserves.  any news regarding mine development will double the stock price overnight.
spdr gold trust
sprott gold trust - can redeem shares for physical gold

Bearish Signals Make These Diversified Companies Ripe For The Picking, Royal Gold, Vale SA, Magna MGA, Gold Silver Industry

Seabridge Gold (SA) - Where else can you get 40 million ounces of gold and nearly 300 million ounces of silver with molybdenum to boot for only $286 million ? The company has more gold reserves than Russia !

Royal Gold (RGLD) - despite a crash in metal prices net earnings have been relatively stable; first quarterly loss in years occurred last December and at $6.5 million it isn't anything to be concerned about.

• stable business model
•  cash equivalents up 200% last two years
•  current assets up 90%
•  over the same time frame total debt has barely changed 

-> take note however that unusual expense is up, surpassing $26 million last quarter after being nearly non-existant in previous periods.  watchout for mine writedowns.

Vale SA (VALE) - This company is trading at a 52-week low which is what caught my attention.
- maintains high quality mines around the world - diversified exposure makes it less risky (diversified companies).  Vale is a hortizontally and vertically integrated company meaning that it owns the infrastructure and controls key logistic services used to transport mined materials.

Potash, fertilizers are staples in farming - when basic metals such as nickel and copper aren't performing you can always rely on the sale of material needed to grow food.

Over the last year, Vale (nyse:VALE) is down 58%, compared to only 23% for Rio Tinto (nyse:RIO) and 30% for BHP Billiton (BHP) despite similar circumstances affecting all three companies - don't see why Vale stock should continue to be punished.

Rio Tinto - Mega project Oyu Tolgoi is entering a second developmental phase (first one already reached critical production 733,700 tonnes last year (metal sales +$1.6 billion).

The second phase is worth $6.5b but calls for $4b in project financing for construction.

Safe stock pick of the month : Magna International (nyse:MGA)

Thanks to low oil prices and the cheap Canadian dollar Magna has gained a competitive edge - latest quarterly revenue was up $220 million (+2.4%) despite a 10% decline in vehicle sales.  Net earnings were also up to $509 million quarterly (+11.1%) or $2.44 a share.  on the year the bottom line was even better (per share $6.76->$8.69).

Because of these results, quarterly dividend was upped to 44 cents (16%).  
Take advantage of these results before the company goes through with a planned stock split later next quarter.

Bitcoin Accepted By More Retailers, 3d Sensor Technology; BlackBerry's Turnaround & Bombardier BBD.B More Orders Planes, Trains

          You know things are crazy when the most solid investment right now may not even be tangible !  Bitcoin, the most widely used virtual currency gained 5% in trading the Thursday following Christmas day.  This, on news that major online retailer overstock.com will begin accepting Bitcoin as payment early next year.  Bitcoin prices ranged wildly over the past couple months.. all time high is $1241 (November 29) up from just $100 in October... Bitcoin currently trades at ~$1240 USD.

Canadian Real Estate Investors Have Deep Pockets.. Makes Canadian Real Estate Market Less Risky

I'm optimistic about the Canadian real estate market, specifically commercial properties. Only 1.5 years ago, in May of 2012 Scotiabank sold Canada's second tallest building, Scotiaplaza to H&R Reit/Dundee Reit for an impressive $1.266 billion.  Then, last month we learn that Canadian real estate investors have been a major driving force behind the resurgent US real estate market;  between the years 2009 and 2013, Canadians outspent Americans by about $27 billion !

This year (ended August 2013) the biggest Canadian spenders south of the border were publicly traded companies ($4.6b), institutional investors ($2.3b), and private companies (1.3b).. they invested in office space ($4.2b), apartment buildings ($2.8b), and industrial complexes ($2.1b) among others.  You can be sure that these companies are eyeing the Canadian market and plan to step right in if and when Canadian prices start to decline.

Bad News at BlackBerry Being Overblown Again (surprise ?)

What hurts Microsoft won't hurt BlackBerry:  Unlike Microsoft, BlackBerry offers a robust operating system with the best reputation for security. What worked against MSFT won't work against BBRY. The last quarter was seriously hurt by Thorsten's for sale tag. People were confused about the future of the company, but now the situation is different the future is clear, BlackBerry is here to stay.

The media chooses to focus on only the worst news in the worst possible way !

• Either say that the company sold 1.9 million handsets or say that it lost $4.4b;  The $4.4b loss takes into account 4 million devices sold.
• The adjusted loss of under $400m compares favorably to the quarterly losses Microsoft's handset business has been racking up.
• Without its cheap devices Samsung would be doing bad too (sales of high end devices plummeted at Samsung).  BlackBerry just released Q5 and other low end devices which will appeal to users of the BB7 phones in developing countries.
• During this quarter (2q2014), BlackBerry had the worst kind of media attention possible, talk of the company collapsing which we now know to be false after revelations that the Chinese government was lobbying hard for Canada to permit a Lenovo takeover.  Now we are seeing a turnaround with Germany, and even the US Government favoring BlackBerry over iPhone.  As long as security remains a priority, BlackBerry will be a player.
• Cash equivalents up to $3.7 billion.  Even without the $1 billion share issue cash down by less than half a billion.  A true $4.4 billion loss would've plunged the company into bankruptcy.
• $4 billion of the $4.4 billion loss stems from structural changes + end of licensing deals made when the company was much larger + things that will not happen next year thanks to the foxconn deal.  
• Under construction is a new security technology center in Washington DC.  This will give BlackBerry a cosier relationship with its biggest clients - government and security agencies.
• New CEO John Chen is hiring a rebuilt sales force designed to target regulated industries, including government clients.
• Last quarter BB sold roughly half a million BB10 phones.  That number can only go up since new CEO John Chen has made it his goal of lowering the price of the phones.
• Market share remains strong in the middle east.  Service revenue remains strong being down by only -13% even though the number of devices sold fell at 3-4X that rate.

Thanks To Aldi, Supermarket Competition In the United States Will Intensify In 2014

Investing In Bullion, Make Gold A Priority (silver price, platinum)

                      Though it's true that for much of history the gold to silver ratio was 12, that trend ended more than half a century ago at a time when gold and silver prices were a lot lower than they are today.  In recent history the ratio has been somewhat erratic ranging from a low of just over 30 (April 2011 gold avg $1474, silver avg $42) to a high of 85 in 2008;  During this period there was a lot of downward pressure on both ironically coming from one of its biggest buyers central banks - rising interest rates cause money to flow out of gold and into other sectors of the economy but gold still stood out, maintaining a price at least 75% of its high, silver however presently trades at only 40% of it's 2011 high of $50.

During the last recession the price of platinum fell below the price of gold, an occurrence that usually only happens during crises  - the last time it happened was in the 1970's when the world's main economic drivers, the US and Europe were going through recessionary periods of low growth, high unemployment, high debt levels and oil prices.

The more recent inverse relationship between gold and platinum dominated the period of August 9, 2011 to January 2013.  Prior to that, since 1986 the price of platinum always exceeded gold with the exception of very few brief periods but even then the difference was marginal.  What this means is that the current economic climate is not as rosy as it's made out to be - the factors now driving gold closer to platinum are the same ones that come into play during times of economic uncertainty (central bank buying, inflation leads to lower confidence in the dollar, causing people to jump onto the bullion bandwagon).

Platinum versus Gold

For bullion buyers, the platinum group metals (pt, pd, rh) provide an interesting alternative to gold but a couple other key factors to consider may make gold the safer option.  In 2008 when rhodium hit $10,000 an ounce before hitting rock bottom a year later (2009 average $1500) investors lost interest in the white metal.  In a healthy economy, demand for platinum and palladium will still be there since both rely on industrial (catalytic converters) and high end markets (white gold plating, platinum jewelry);  however, yearly demand in general is not nearly as high as it is for silver or gold;  2012 platinum demand was about 6 million ounces, 7 million ounces for palladium which is only a fraction of the 155.4m ounces of gold, 1.16b ounces of silver consumed.

2012 exit year - Global reserves of platinum group metals total 2.328 billion ounces (2013 Mineral Commodity Summaries: 66m kg, annual production represents 0.6% of this) versus 1.799 billion ounces for gold (annual production represents 5% of this).  This doesn't sit well with me given that production of gold is some eight times greater than all platinum group metals combined.  As an investor what this tells you is that it's a lot easier to raise mine output to either match higher demand /or to put downward pressure on the price, than it is for gold.  At current prices, gold is just as rare as the platinum group metals but demand remains many times greater.  This is precisely why the rhodium crash of 2008 could never happen to gold (rhodium supply increased substantially as miners saw an opportunity to sell at higher prices but it turned out that demand was not nearly as strong as anticipated).  Platinum may be brighter but from an investment perspective gold still outshines it. 

Demand for platinum has a shiny future - light vehicle production is expected to increase by 13.6% over the next three years, with each vehicle needing a catalytic converter containing four grams of platinum and palladium what that amounts to is an additional 1.54 million ounces of pt/pd demanded.

Eldorado Gold & European Goldfields, Low natural gas price affects production, What happened to Canadian oil company dividends? (no more trusts)

European Goldfields (% chg 5d, 1mo, 3mo, 6mo: -7.93% +29.54% -0.34% +26.5%) - updated as of December 19, 2011
Shares are currently trading above the 200 day moving average (in stark contrast to just a month ago-Nov 18 when they were below it).
For 9 of the last 11 months the stock has suffered (down about 29% until the last month when it showed some resilience, including last month's 18.4% increase the stock is still down 16% last 11 months) due to a longer than anticipated permit review process in which Greece decided whether or not to grant approval for the Olympias and Skouries gold-copper porphyry projects in northeastern Greece (permit initially applied for in 2006) (even after decided the stock continued to fall slightly, down 13% in the 3 months leading to mid November). Skouries alone has the potential to produce at a rate of 350,000 ounces of gold equivalent (about half of that coming from silver). The company took a while even just to make up the 9% stock decline experienced over the two months leading up to the decision (July 12, 2011). Base metals like copper continue their lacklustre showing ($4 August 22, 2011 compared to $4.45 on July 29th) making the copper assets less attractive. Dec.14 after takeover rumous subsided European Goldfields stock fell 8.8% on the day.

The two new permits take away a lot of the risk that scared investors away from the company. Including projects in Turkey and Romania, European Goldfields appears to be well on its way to becoming Europe's largest gold producer by 2013-2014 (over 400,000 ounces of pure gold/yr doesn't include silver and copper). Construction of the mines also won't be a problem with Greece's largest construction company, Ellaktor as its largest shareholder (19.36%), 2nd largest shareholder is Blackrock Investment at 7.3%. More reason to optimistic about the company outlook: takeovers! Eldorado Gold and Centerra Gold both operate projects in some of the same areas and would probably overpay in a takeover. Also, European Goldfields is considering a move to the main London Stock Exchange index moving up from junior AIM. In mid December 2011 there was a run on European Goldfields stock due to hints at a possible Centerra Gold takeover.
Also of note, first production at Olympias will be in 2012 & the company's only source of cash flow currently is a small mine in Stratoni, Greece.

European Goldfields acquired by Eldorado Gold Sunday December 18, 2011 for $2.5B. The new Eldorado Gold will have a market value of about $11 billion and produce 1.5 million ounces of gold by 2015. Shareholders of European Goldfields will receive 0.85 Eldorado shares and C$0.0001 in cash; The price being paid by Eldorado for EGF is about $13.05/share which is a 46.14% premium to the stock's month low of $8.95 reached on November 23, 2011. The deal comes at the same time the company is securing $600M from Qatar Holdings to finance the Skouries and Olympias projects in Stratoni Greece. The following day, on Monday Eldorado Gold pledged to spend $2 billion and create 2000 jobs in Greece over the next several years. Although Eldorado saw total cash operating costs per ounce go up $55 or 13.3% (9mo) owing to lower grade ore mined at Kinsladag (still the largest mine by output but ore grade is less than 1/4 as high as it is at the other mines), there were no negative effects felt on the company's income statement as the price of gold skyrocketed over the year, giving the company a 31% (9 months) and 38% (3rd qtr) boost in price realization per ounce to $1571 & $1700/oz respectively.

Natural Gas & Oil
    Since oil's near term rebound from below $80 back up to the $100 level (last 2 times oil breached that level: Feb 2011 & Oct 2008) many Canadian producers haven't added to their dividends. The reason? Ever since the end of the 2010 fiscal year the majority no longer enjoy the tax free incentive that came with being a trust in Canada, due to new government legislation doing away with the tax benefits (consequently many including Baytex, Vermilion, Provident, Penn West have since converted back into corporations). Although this may cause investors to lose interest it may not be bad for companies in the long run; More profit will be reinvested back into the company through expansionary efforts (they may see tax benefits to that). Berkshire Hathaway, for example pays no dividend even though it owns many companies which do. Maybe they should look to Exxon Mobil for advice, one of the world's ten largest companies it avoided paying US taxes in 2009 (used tax shelter practices to send earnings overseas). Exxon was not alone, of the 1.3 million US corporations only 33% paid taxes in their home country between 1998 and 2005 (another strategy used is using losses from previous years against current gains).

On October 27, 2011 Canada's third largest oil company, Cenovus Energy reported on the third quarter. Overall production was steady however natural gas production was down by more than 10% qoq, a trend not disimilar from its peers in the industry. It also set a long term production target for natural gas at 400-500 mmcf/d which is only half the rate at which it produced gas when the company first split from Encana in 2009. The lower results have nothing to do with resource depletions; Cenovus has been diverting capital expenditure away from gas and into oil which isn't surprising given that oil prices have increased by more than 400% since 2001 while natural gas prices (incluenced by supply and demand particularly the center of US deliveries in Louisina/NYMEX) are near a 9 year low of $3.32/m3. Natural gas was as high as $16 in 2008, $6 in 2009. Even the little amount that has been invested into natural gas assets ($22m in the 3q compared to over $220m for Christina Lake/Foster Creek) was done with a focus on oil ($200m increase in natural gas cash flow due to the $22m capex, was reinvested in oil assets). 36 mmcf/d of gas producing assets were sold off between 3q10 and 3q11. Between 2006 and 2010 Chinese imports of natural gas increased 1500%.
More on Oil Supply and Demand (2011-2016)

Precious Metals Companies With Promising Growth Potential (undervalued gold, silver stocks)

&nbsp&nbsp The gold rush is on and miners Yamana Gold (up 16% last month), Agnico-Eagle Mines (up 5% last month), Buenaventura (up 8% last 3 months), First Majestic Silver (up 20% last 3 months) are benefiting from the surge in price while others can't seem to catch a break as evidenced by their volatility, leaving investors frustrated angry and confused (those changes in stock are as of September). Here are some companies that have been through a rough patch (like Yamana gold last year) but could be in the money over the next couple weeks if gold and silver prices continue their climb but in a less volatile manner:

European Goldfields - Update for November: For 9 of the last 10 months (down about 29%) due to a longer than anticipated permit review process in which Greece decided whether or not to grant approval for the Olympias and Skouries gold-copper porphyry projects in northeastern Greece (permit initially applied for in 2006) (even after decided the stock continued to fall slightly, down 13% in the 3 months leading to mid November). Skouries alone has the potential to produce at a rate of 350,000 ounces of gold equivalent (about half of that coming from silver). Since the permits were granted, the company hasn't even made up the 9% stock decline experienced over the two months leading up to the decision (July 12, 2011). Base metals like copper continue their lacklustre showing ($4 August 22, 2011 compared to $4.45 on July 29th) making the copper assets less attractive.

The two new permits take away a lot of the risk that scared investors away from the company. Including projects in Turkey and Romania, European Goldfields appears to be well on its way to becoming Europe's largest gold producer by 2013-2014 (over 400,000 ounces of pure gold/yr doesn't include silver and copper). Construction of the mines also won't be a problem with Greece's largest construction company, Ellaktor as its largest shareholder (19.36%). More reason to optimistic about the company outlook: takeovers! Eldorado Gold and Centerra Gold both operate projects in some of the same areas and would probably overpay in a takeover. Also, European Goldfields is considering a move to the main London Stock Exchange index moving up from junior AIM.

Even Amidst Record Breaking Gold Prices, Not All Gold Investments Are Good Investments

On August 11, 2011 it was announced that four Ireland-based gold funds (London Aliquot Commodity, Agriculture, Precious Metals and Intelligent Portfolio Asset Allocation, operating under Castlestone Investments of London) will be terminated, with the parent company blaming the volatile economic environment since 2008 for their demise. (Gold and commodities bull run fails to avoid $50m funds' closure)

It is alleged that inconsistent financial returns have kept them from maintaining solvency on their own (they required consistent cash from the parent company); combined, they have allocated holdings worth $50 million (in gold stocks) which is relatively small but significant for its handful of investors. This comes a month after the Financial Services Authority used search warrants to conduct an investigation into Castestone's business, suggesting that mismanagement and other flawed business practices are to blame.

So you see, even in bulls markets where the one main factor influencing valuations (the price of gold) is skyrocketing, investors are not always guaranteed a safe haven for their money. Due dilligance is one of the most important aspects of investing. Funds closing during the gold rush is ludicrous however that doesn't mean every fund is going to experience gains of mammoth proportion: many gold stocks haven't risen much (so far) during the commodity boom (Gold related equity funds in Canada haven't experienced the type of rise one would expect, though some stocks like Yamana Gold are up, Yamana up over 13% in July); Some base metals stocks like Taseko Mines (copper) have declined at an out of control rate; reasons for that include a market still overrepresented by people skeptical of the West's approach to its debt problems, they remain unconvinced that the United States has avoided a future default. The government of Canada has also been a problem for many companies, in November 2010 it declined to grant Taseko Mines a key mine license citing environmental effets. (globeandmail: Gold-related equity funds left in bullion’s dust)

The funds account for 13% of Castlestone's total assets under management (total without the 4 funds is $330 million/£205 million).

In other news on the day (Thursday August 11, 2011):

Italy and France joined Greece, South Korea and a growing list of other countries in banning short selling (borrowing stocks/securities/assets from a broker, selling them to another group with the intent of returning them to the broker some time later after buying them back at a different price) after it was rumored that short sellers were trying to exploit a French downgrade. A Europe-wide ban is unlikely given the EU's lack of authority to enforce it. Turkey has also curbed short selling.

Canada's trade deficit rises to $1.6 billion in June (all countries) or $5.2 billion with countries other than the United States (US-Canada trade surplus is at $3.63 billion down from $3.73 billion in May), making it even harder for the country to lessen its reliance on trade with the USA (in the USA, the trade deficit was $53.1 billion in June up 4.4%, the highest since October 2008). For Canada, both imports and exports fell but exports fell by a wider margin. In May, Canada's trade deficit was only C$814 million (US$840 million).

Performance of Gold Mining Stocks not Necessarily Correlated with the Price of Gold (last 2 months gold price is up over 14% but a basket of large/mid cap gold stocks is down 7%)

Gold stocks have decreased in value by about 7% over the last 2 months even though the price of gold has risen 14%. (Maison Placements Canada Inc.) Goldcorp and Kinross Gold both fell 4% in July 2011 even though the price of gold increased 14% (in Canada the S&P gold index only increased 8% during that time even though it hit a near term low prior to that). (globeandmail: Gold stocks still lag surging bullion price) Gold companies are playing catchup for a number reasons; Many of the established companies have dwindling reserves (annual production exceeds reserve replacement) which is one of the reasons behind declining global output (China is one of only a handful of countries that can be relied on for growth); Prior to the more recent spike in the price of gold (before 2009) gold production worldwide fell each year, from 2005 to 2009 consecutively meaning that record high gold prices are needed just to keep production steady (higher gold prices make new mine production easier to accomplish because cash costs don't need to be low for healthy margins to be realized) (Goldsheet - Historical World Gold Production) Over the long term, production has also been down in the established mining districts of South Africa and Canada. (Gold News:Gold Mining Decline) In September 2010 all of the world's gold stocks had a combined market value of US$ 360 billion, that compares to US$ 19 billion in 2000 (increase is due mostly to new mining companies entering the market; higher gold prices make even the highest cash cost operations economically viable).

There is optimism regarding production though. In Australia, Olympic Dam (BHP Billiton's trillion dollar gold/copper/silver project), Super Pit, Newcrest Mining's Cadia Hill (33 million oz of gold reserves) are well on their way to producing in the near future while in other countries that have exhibited falling production rates in the 2000's (Canada specifically), new projects at Detour Lake, Malartic, Kerr-Sulphurets Mitchell and Snowfield/Bruceback (88 exploration projects in British Columbia alone in 2010 with capex spending the sixth highest since 1991) have investors optimistic. (Mineweb: Officials believe one of the largest gold resources in the world lies within BC) Canada's biggest gold project, Kerr-Sulphurets-Mitchell (reserves at 39 million ounces for gold and 214 million ounces for silver) is estimated to have cash costs of only $105 for the first seven years, that's four times less than Goldcorp's cash cost which has the lowest among tier 1 gold companies; also four times lower than Yamana Gold's cash costs !

The reason for the 7% drop in gold stocks at a time when gold prices increased by double digits (%) is simple: Companies with declining reserves are looking to mine in high cash cost regions out of desperation (higher cash cost=smaller margins=market value of each ounce goes down). Newmont Mining is an example; though reserves have maintained growth the increases have been smaller [only about 1.6% growth in 2P reserves in 2010, 93.5 million from 92 million ounces versus 7 million between 2008 and 2009 (85 mil in 2008/92 mil in 2009], established companies like AngloGold and Goldfields have decreasing production rates while other companies like Kinross Gold have taken on lots of debt to make questionable acquisitions (by issuing paper, other examples are Barrick Gold's acquisition of Equinox Minerals). Smaller potential for cash cost improvements/production rates by established companies means the junior, relatively new players (like Eldorado Gold, Detour Gold, Osisko Mining) and others like Yamana Gold (undervalued because of past risks which have proven to be not a problem for the company, Yamana was up 13% in the month of July, being one of the only major gold players to record significant growth over that time (Newmont was flat while Barrick Gold was only 3.5% higher, Goldcorp and Kinross were flat) is where the highest growth rates (PEG Ratio, P/E ratio) will come from. In 2008 though, things were different; For most of 2008 when gold prices started their overall upward trend, it was the large cap companies that outperformed the small cap; the opposite was true in the summer of 2011 when gold prices broke through new levels, the change in behavior might simply be the result of a much higher support level for gold prices making high production costs less of an issue for startup companies (many more juniors entered the market in 2011 than in 2008). Goldcorp's largest gold producing mine Red Lake, is nearing the end of its mine life (about 700,000 ounces/year gone), but Goldcorp production will be maintained due to many other mines commencing (Penasquito, Mexico reached commercial production in late 2010; Pueblo Viejo, Dominican Republic; Cerro Del Negro, Argentina).

Another thing to consider is that there are some factors unrelated to stocks, which affect spot prices; For example in early August of 2011 (when there was a lot of economic uncertainty) gold and silver spot prices declined at the same time major stock indices fell by their largest margin since the 2008 recession, the commodities selloff was sparked by a margin call (temporary selloff due to traders being required to meet call options). On August 8, 2011 when stocks performed poorly, gold spiked again (gold is the first thing central banks/banks/investors hoard when they want a stable investment medium, also when banks realize they might have to fulfill their significant short positions) but don't be concerned about the more gradual silver increase (historically, silver has lagged gold (time) when increases occur; the reason is that banks and large investors tend to wait until gold gets too expensive before buying the white metal); also, when gold becomes more costly, jewelers and industrials turn to alternatives and silver is one of them. Also consider the gold/silver ratio which is 44 (August 8, 2011), much higher than the historic ratio of under 20.

Some interesting facts about gold: 3/4 of all the gold ever extracted from the earth was mined after 1910. South Africa was the largest producer in most years since that time. Switzerland was the last country to tie its currency to the price of gold (1999). Until May 2009, all the gold ever extracted amounted to 5,835,876,025.6 ounces or about 85% of an ounce per person (165,446 tonnes). Gold weighs 19.3 times as much as water, is even more rare than diamonds, never oxidizes (maintains its shine), and in its more natural form, is one of the softest metals. Web Directories