Friday, November 20, 2009

Jim Rogers Thinks Silver Bullish

Jim Rogers says that although he doesn't think he's a gold bug, gold has been in a bull market since it hit its low in 2001. He says that he is currently holding gold and has been holding it for a long time. When told by the reporter that when adjusted for inflation silver peaked at over $800 per ounce before Columbus discovered the New World and around $100 per ounce in the early 1980s Rogers comments that not just silver but all commodities will be in a bubble before long:

"Silver is more attractive than many commodities. Silver is 70% below its all time high. There are not many things in the world you can say that about and if I had to buy any precious metal at the moment, I'd probably buy silver rather than gold. Gold's been making all time highs, silver's far, far below its all time high. Likewise palladium. Palladium is another that's far below its high. But I think think silver is more attractive than gold."

View Our Inflation-Adjusted Charts Article Here

Rogers then goes on to explain that silver has been used as money much more throughout history than gold has. He also notes that commodities will be hot for the next 10 or more years, and then stocks will be back.

The above is a complete summary. To hear the full conversation see the Youtube video below

Part 2 has Rogers commenting on governments printing too much money, gold being nowhere near its inflation-adjusted high, eventual currency collapses, US defaulting on its debts, and other economic issues. Interestingly, Rogers says his daughters will be given gold and silver for Christmas in 2009!

Watch Part 2 below

View Our Inflation-Adjusted Charts Article Here

Wednesday, November 18, 2009

1 Ounce Rhodium Bar Coming Soon!! (1 oz rhodium bar)

1 Ounce Rhodium Bar Coming Soon!! (1 oz rhodium bar)

MARCH 16, 2010 UPDATE: Sorry guys, I lied. These 1 ounce bars are not available and have for nearly a year said "coming soon." I'm sorry to disappoint everyone with the following article.

----------(original article follows)------------

That's right, folks, our friends over at Cohen Mint are planning to release a 1 oz rhodium bar within the next month!

Cohen Mint is by far the front runner in the rhodium coin market. In fact, the company has no rivals. If you're looking to invest in rhodium you either invest in stocks of a nickel mining company that has palladium, platinum, and rhodium as by-products, or you invest in a company like Stillwater Palladium Mining or Impala Platinum which also pulls some rhodium out of the ground, but neither of which focuses on rhodium (note: I haven't researched how to invest in stock of companies that mine rhodium, so understand that there may be more ways than I mention).

But, in the spring of 2009 Cohen Mint started producing one gram rhodium coins! Now, we're going to get a quarter of 1 ounce rhodium coins and 1 ounce rhodium bars! Here are a few photos of the current 1 gram rhodium bullion coins.

Front of 1-Gram Rhodium Bullion Coin
Rear of One Gram Rhodium Coin
To read all about the 1 gram rhodium coins which
have been available most of 2009, click here.

One Ounce Rhodium Bullion Bar

The proposed 1 ounce .999 rhodium bar looks like it will be pretty nice looking! I like the design and love that it will be double stamped. What I mean by this is that the sheet of rhodium will be stamped on the front, after which it will be stamped on the back. Some bullion bars are only stamped on one side and while they are worth the same (the weight of the metal, the back sides aren't shiny).

The new Cohen Mint 1 Ounce Rhodium bar will have a small stamp showing Eitan Cohen's design of a night on the horse. This is a good choice because it's the same design that's on the front of the one gram rhodium coins. As you can see in the photo the proposed stamp will also state the chemical symbol of rhodium, RH, "Cohen Mint," "1 OUNCE TROY," and "RHODIUM .999 FINE."

1 Ounce Rhodium Bullion Bar
The rear of the coins take some styling from other bullion products, such as the Engelhard Silver Bars (see left). Engelhard has versions where the rear if the bullion bar has "ENGELHARD" imprinted into the bar. The angle of the writing is quite stylish. However, as you can see in the photo to the left, the bar has the rest of the bar stamped so that "ENGELHARD" is raised above the surface of the bar, similar to the date printed on the coins in your pocket. While this is more attractive, due to the intricate detail of the design, I'm expecting the marks will be recessed into the bar. But the Cohen Mint has surprised us in the past, so we'll see!

Quarter of 1 Ounce Rhodium Coin (1/4 oz Rhodium Coin)

When you hear the Cohen Mint is going to make a 1 ounce rhodium bullion bar, you're excited. But when you go the site, there's a surprise waiting for you: the Cohen Mint will also make a 1/4 ounce rhodium coin!

The 1/4 ounce rhodium bullion coin will look similar to the 1 gram rhodium bullion coin pictured above, however, since the coin is about seven times the weight it will have approximately twice the surface area of the 1 gram coins. To put this into perspective, if the one gram rhodium coin is a dime, the 1/4 ounce will be a quarter (no, that isn't the exact size, but similar).

And below you can see the proposed design. Very nice looking coins. We're hoping these will have less of a premium for fabrication costs because, it takes approximately as much work to make a 1 gram coin as it takes to make a quarter ounce rhodium coin or a 1 troy ounce rhodium bar.

Quarter Ounce Rhodium Coin (1/4 oz Rhodium Coin)

1 oz Rhodium Bar Pricing

I haven't contacted Eitan Cohen about pricing. He is, as you can guess, a very busy man! When the 1 gram rhodium bullion coins came out they were priced at $90 when rhodium was around $1500. Now that rhodium is around $2300, the coins are selling for $125.

For my prediction, I'm guessing the 1 ounce bars will be around $2900 with rhodium at the price its at today. I would say the 1/4 coins will be around $800. Now don't quote me or plan on these prices. These are my guesses and I wouldn't be shocked if I were off by as much as 20%.

UPDATE: the 1/4 ounce rhodium coins are selling for around $880 and the 1 ounce bars are $3300.

Tuesday, November 17, 2009

Article Summary: 'New Normal" for the Gold Price?

Over the past week or two I've been helping an exchange grad student at the local university summarize articles for his Literature Review class. Doing so, I realized that it's entirely possible to get a seven page article down to a few paragraphs. Therefore, for several reasons--to save you time of finding articles, to save you time reading articles, and to save you from reading my opinions only--I've decided to start summarizing a few others' articles to give you a different angle on things.

Peter Cooper, writing for Arabian Money, posted an article on November 4 commenting on the surging gold price. The article give his predictions, views, and even a bit of investment advice.

Cooper (2009) states that with gold standing at $1080 at the time of writing, another jump in the gold price seems almost certain. However, saying now that gold will jump to $2000 might be similar to the Kremlin declaring in July 2008, when oil was $147 per barrel, that oil would jump to the $200-250 range. Gold, though, is not just on a temporary spike as oil was. For this to be a spike we'd need to see $1500 gold, or higher.

Cooper (2009) notes how that at the time of writing the dollar was somewhat of a safe haven, along with gold. Also, "increasingly it looks as though silver is also being treated as precious metal again rather than an industrial commodity, offering an interesting leverage play on the rising gold price" (Cooper, 2009).

It still seems that gold won't be going much higher as long as we have a strong dollar, Cooper says. Cooper also mentions the possibility of a global currency and the uncertainty of the dollar's future. However, in times of uncertainty, gold and silver will retain their value.

Finally, Cooper notes that holding gold is more a wise investment than holding dollars. He also notes the fact that the India is purchasing a lot of gold from the IMF.

Cooper, Peter (2009). What is the 'New Normal' for the Gold Price? Arabian Money.

Saturday, November 14, 2009

Article Summary: $1160 is Gold's Next Target

For several reasons--to save you time of finding articles, to save time reading articles, and to save you from reading my opinions only--I've decided to start summarizing a few others' articles to give you a different angle on things. I will do this from time to time.

Daryl Guppy (5 Nov 2009) claims that the sudden rise in the gold price has been influence by the Indian Central Bank buying gold from the International Monetary Fund. He notes that many gold bugs seem to think gold will hit $2000. However, the four factors that influence the price of gold may not actually influence the price as much as gold bugs think it will.

1. Fear. Gold reached $1000 in March 2008 when the market was collapsing and then reached it again in September 2009 after the global market had recovered. This proves that fear is not as huge a factor as it may seem.

2. US Dollar Strength. The dollar began falling in March 2009, however gold also fell from $1000 to $850 at the same time; and then it rose back over $1000. Not much of a correlation.

3. Central Banks. The Indian buying pushed gold to its current all time high. However, transfering the gold from the IMF to central banks doesn't affect supply and demand, therefor any affect on the gold price will be short-lived.

4. Jewelry. Indians only buy gold around holidays. Also, jewelry demand is only steadily increasing worldwide, as it always has. This increase is not enough to affect gold's sudden jumps and retreats.

Guppy (2009) next states that gold has reached it's first plateau of $1080. Next it will be $1160, and then $1240. However, he also says that if China announces that they won't start buying from the IMF, gold could retreat to $1000; but if they announce they will start buying, gold could hit $1160.

Guppy states that the way money is made in the gold market deals with "suppliers of pick sand shovels, or steel for the mine pit heads and food for the miners that go on to build solid and sustainable businesses" and that profits would be in mining companies.

Guppy, Daryl (5 Nov 2009). $1160 is Gold's Next Target Level: Charts. CNBC.

Thursday, November 12, 2009

Why the Gold Price Increase to $1,120 an Ounce?

Gold has been surging like we haven't seen it surge for years. This increase is significant because it continually reaches all-time highs, which today, has gold at $1120 per ounce.

The white metals are all well below their all-time highs, but are still following gold up the ladder: platinum is at $1370 per ounce, 60% of its all-time high. Palladium is at $350 per oz, 32% of its all-time high. And silver is trading at $17.50 per ounce, 35% of its all-time high.

Unlike gold, the white metals are used in manufacturing and used up. With the recessed economy they aren't in high demand, so their price jumps are not industrial, but rather, they're following gold as hedges.

Now let's look at some of the reasons gold has risen to $1120 an ounce.


Central banks are buying gold. Most notably India. Last week the central bank of India bought 200 tons of gold from the International Monetary Fund (IMF). India is reported to want to diversify it's financial hedges. The sale was an alleged US $6.7 billion.

Central Banks

Several other central banks are reported to be buying gold to hedge against the risks of a falling dollar. Sri Lanka and China are on the list, amongst others. These purchases not only increase the gold price, but influence individual investors as well.

Since buying has begun, it may continue, thus making investors rush to buy before the price increases more. This interest may shoot gold well past anticipated levels due to overbuying.

Matt Zeman of LaSalle Futures Group Inc. is quoted as saying, "The interest that central banks have shown for gold has really lit a fire under the market...People are questioning the value of not only the U.S. currency, but all paper currencis. Investors are moe comfortable holding gold" (cited by Ngyuen and Larkin).


A simple report by the Chinese government saying it will start buying gold is enough to shoot the price up another $100 or more. A swift upturn in the Chinese economy would have a similar, yet softer effect.

Falling Dollar

If the dollar falls, the price of gold will go up in dollar terms. However, if the dollar falls, since many other countries hold US debt, gold will rise in terms of other currencies as well.

The dollar has reached a 15-month low on the dollar index. This index compares the performance of the dollar against other main currencies. This shows some of the reason for gold's surge, however, gold is also at an all-time high measured in euros. It's currently trading at around 750 euros per ounce.


The world is worried about the dollar. With the trillions of dollars spent this year in bailouts and stimulus packages, the dollar is being printed like never before. The Fed is hoping this will stimulate the economy, and it may, but it will also likely cause inflation.

John Hathaway of Tocqueville Gold Fund is quoted as saying, "Would they be able to retract the liquidity they put into place?...If they havce a hard time doing it, I htink we'll see inflation, and gold will go much higher (cited by Ngyuen and Larkin).

And again, it's not only the inflation that's causing the gold to go higher, it's also the anticipation of future inflation causing investors to hedge now before prices go higher.

Interest Rates

The Fed has kept interest rates low in hope of sparking the economy. Low interest rates means cheap loans for housing and month thrown back into the economy.

Zeman says, "The dollar is not going to get any firm footing with rates at zero...People are selling dollars and putting it in higher-yielding assest. All commodities are going higher" cited by Ngyuen and Larkin).

Goldman Sachs thinks that gold will reach $1200 with rates as they are. Also, since people are thinking rates will stay low longer, they're anticipating gold to go higher and buying more, thus increasing the gold price even more.

"Analysts said the dollar was smarting after Fed officials said on Tuesday that high unemployment and sluggish consumer spending were risks to recovery in the U.S. economy, which may keep the Fed funds rate low" (Tang and Harvey).

Other Factors

There are too many factors to list, but above are the main ones. Some others include the opening of the gold market back into Vietnam, spurred by investor demand. It was previously illegal to import gold into Vietnam.

The Chinese government has reportly encouraged citizen's to buy gold to hedge for inflation.

Gold Fields gold producer in South Africa is going on a labor strike. This just means less new gold coming out of the ground to sell.

* * *


Godt, Nick and Lesova, Polya. "Gold Hit Record Near $1,120 an Ounce." MarketWatch. November 11, 2009.

Tang, Frank and Harvey, Jan. "Gold Rises Towards $1,120 on Strong Sentiment." Reuters. November 11, 2009.

Nguyen, Pham-Duy and Larkin, Nicholas. "Gold Futures Rise to Record on Speculation Dollar Will Decline." November 11, 2009.

Wednesday, November 11, 2009

Jim Sinclair Says the Dollar is Dead

In his article "Motivation Behind the Countdown," precious metals specialist Jim Sinclair (August 14, 2009) gives us his view of the US dollar's fate for November, 2009. The prediction isn't pretty.

The reason for Sinclair making this assumption is that China requested a financial summit with the US. These things are seldom requested. Sinclair states a couple things he sees happening.
  1. The US need China to continue buying US debt, meaning the US needs China to continue lending it money
  2. The Chinese want the US to support a "Super Sovereign Currency as an offset to dependence on the dollar for international settlements and national reserves" (Sinclair, 2009)
  3. "The Chinese rightly feel that the greatest risk to their present dollar position’s valuation is quantitative easing. Or simply put, the monetization of one’s own debt by the electronic creation of money for funding yourself"(Sinclair, 2009)
Sinclair goes on to state that the Management of Perspective Economics only works in a strong market, which ended in 2001. No finagling will help the dollar now that the US has so much debt. Nor can the US dollar survive if we support a "Super Currency," as Asia's holdings of the dollar are the only real support the dollar has.

Sinclair closes with the following:

"All of this could have been fixed prior to the event of Lehman declaring bankruptcy. Now there are no PRACTICAL SOLUTIONS....Pandora’s Box is open, only to be closed by markets as the downward spiral goes to its practical end, a return to commodity money."

* * *

This has been a complete summary. To view the full article, click here.

Sinclair, Jim (August 14, 2009). The Motivation Behind the Countdown. Jim Clair's MineSet.

Monday, November 9, 2009

Rhodium on the Rise!

Rhodium is again on the upward trend. Remember just a year ago it was down to $700 per ounce. Today is it $1800-2100 per ounce (that price discrepancy depends on who your quoting source is and whether you're buying or selling.

The chart below shows the price of rhodium as quoted by Kitco. You can see it's been steadily moving up from $1500 to $1800 over the past few days. The $2100 price is the quoted price if you want to buy an ounce of it, which is considerably higher.

Rhodium Price Chart

Rhodium Coins Prices Rising

If you'll recall we did an interview with Eitan Cohen of Cohen Mint regarding the minting of the Cohen Mint Coins (full article here). Checking the Cohen Mint Rhodium Bullion Coin site, since the coins came out a few months ago, they've climbed from their starting price of $89.99, to $92.99, to $99.99, to $102.99, and just today to $104.99. Rhodium bullion is rising so the cost of making rhodium coins is also rising. At $104.99 it will cost you about $3300 to get your hands on an ounce of rhodium (remember these are 1-gram coins so you'd need 31 to have an ounce).

You may be thinking that owning 31 small coins isn't the best way to own an ounce of rhodium. Let me tell you, though, it is the only way. There is a company online that allegedly will make a bar for you and sent it, but I haven't read about anyone ordering one from them.

Friday, November 6, 2009

$1100 Gold Coming Soon!

I was wrong. I said a couple weeks ago that gold will peak at around $1050 (but I searched to find where I said that, so I guess I'm not wrong, right?!). Today the gold price is $1095.

This is a historical high for gold in dollar terms, surpassing it's many previous highs that it hit in October, 2009. We've seen quite a few instances of a gold all time high over the past few months. Let's look at a chart which shows it a bit more clearly.

Rise to $1100 Gold Chart

As you can see from the chart above gold nipped $1000 in February, nearly did it in May (both were near historical highs at the time) and in September in remained comfortably over $1000 for over a month long period. In October its holding level was around the $1050 mark. Now we're tinkering with $1100. Will it hold here for a month again? I'm not going to take a guess this time!

And, for your reference, the chart below shows gold's previous run up to $1000 when it did it in the spring of 2008. Then it pretty much remained below $1000 for a year before continuing on its current spike.

Should You Sell or Buy Gold Bullion and Gold Coins?

Right now, if you paid under $700 for your gold bullion coin and would like to realize a $500 profit, I wouldn't say that you'd be making a mistake by selling it. I do think it will go higher, but that will be slowly and not a sudden increase unless if something drastic happens in the economy. So, also, if you decide to buy gold right now, your investment decision will also be wise! I do think gold will dip again, though.

Should I Sell Gold and Buy Silver?

I wouldn't say this is a bad strategy, since silver has a much higher chance to double or quadruple as gold does. If you've been reading the site you'd know that I have all my money tied up as it is and I'm not saving too much so I haven't been buying as I'd like to. I did manage to buy a few small silver bars the other day; and I didn't have to sell my gold to do it!
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