Investing In Gold and Metals

In a special 2004 report from Sprott Asset Management titled “Not Free, Not Fair: The Long Term Manipulation of the Gold Price” in that report the authors stated their belief that the gold price was being manipulated through the use of derivatives and short selling by central banks and their cohorts at the big investment banks.

If we fast forward to a 2005 report by Sprott we read this from their report titled" There is No gold" "As the demand for physical gold increases, investors and central banks alike (that is, the central banks that want their leased gold back) are finding that there is no gold available to be delivered. After all, in a market that is already in shortage, where is the gold to meet incremental demand supposed to come from when there is no gold?" So at that point in 2005 we have central banks wanting to get gold back that they were leasing and selling in the past to manipulate the market. At the same time we saw a demand for New gold that surpassed the supply.

Moving on to October 14 2005 we can read this gem of a quote from Sprott “As Gold Nears an 18-Year High, Some See Signal of Inflation Rise”. Similarly in Tuesday’s Wall Street Journal was the headline: “Stocks Fall Amid Auto-Sector Woes… Gold Price Shines”. Indeed during times of financial anxiety and strain, signs of which are becoming increasingly apparent to everyone, gold remains the one and only go-to investment that can protect people’s otherwise heavily-weighted paper portfolios.

Let's again fast forward to the present. Today Gold is again on the road to a new record high having reached over $975.00 US per once today, surpassing records set over the past couple of months. This is amid news in numerous reports that show gold production in Mali Africa fell 9% in 2007 and is projected to fall 12% this year due largely to mine reserves being diminished. Combine that with production drops due to electrical power supply restrictions in South Africa, we see further shortages in Gold Supply.

We have supply shortages while the demand for Gold is rising due to uncertainty in in financial markets and paper money backed investments. We are bombarded with reports on the sub prime lending crash and the weakening dollar among many other sources of bad news in the world ecomony. Amid this its clear to see that investors are turning to Gold as a safe haven.

Where this will all play out is yet to be seen, however many investment guru's agree with the belief that Gold will continue to increase in value and appears to on the road to new highs. To quote Sprott on more time “The gold standard may be dead… but gold remains the standard.”

Speaking of the Gold Standard below is an interesting short video talking about the Federal Reserve , paper money and Gold.

Think about that statement for a moment. Can you think of a product that isn't made from something that hasn't been grown or mined? I can't think of one that hasn't got ingredients from one or the other. Just has growing things mining is a very important part of our daily lives. Yet it certainly isn't a clearly understood industry.

Mining has had it's share of problems and the people behind some mining ventures have clearly erred in judgement by cutting corners on safety and environmental protection. But thankfully there are many more that have not and run safe low impact operations.

The 2008 Prospectors & Developers Association of Canada International Trade Show and Investors Exchange is March 2nd to 5th in Toronto Ontario. In the Metro Toronto Convention Center South Building.

There will be a Manitoba Pavilion sponsored by Manitoba Mine department plus numerous Manitoba mining companies will be attending, with trade show booths and showcasing their projects at the event.

The 2007 PDAC International Convention, Trade Show and Investors Exchange broke yet another record with 17,600 people attending this 75th gathering. There were 757 exhibiting companies at the convention, with 200 speakers in the technical program, exchange forum and PDAC/CAMESE (Canadian Association of Mining Equipment and Services for Export) Exhibitors Innovation Forum.

This year is shaping up to be larger and even more exciting.

PDAC 2008 Link