Gold prices will rise soon.

[Maetryx]

Maetryx here,

Given the bear market, and the extreme low yeilds on US Treasurys, investors will soon be returning to good old yellow metal. Worldwide, gold is valued in US Dollars. So when the US Dollar gets cheaper (against foreign currencies) then the price of gold will increase in US Dollar value. In other words, the slumping US Dollar will not drag down the price of gold. Gold will remain while the dollar weakens against it.

Now, the best way for us to take advantage of this phenomenon may not be obvious. We could all rush to buy some bullion. But consider this: if you spend US$270 for an oz. of gold, and it goes up about US$30 to US$300, you will have increased your holdings by approximately 10%. Not bad. BUT, gold costs around US$250 oz. to take out of the ground. So all these gold mining companies are only making about US$20 an oz. right now. If gold gets up to US$300, their profit margin surges to US$50 an oz. That's not a 10% increase in profit; that's 250%(!).

In my studied opinion, the gold mining stocks are where the big gains are to be realized while the stock market tumbles. An example of a "blue chip" type gold mining stock is Placer Dome (symbol: PDG). An example of a penny stock, and the potential gains they represent, is Alamos Minerals (symbol AAS on the Vancouver Stock Exchange, so VSE:AAS). It trades for C$0.10 which is about US$0.07 a share.

I'm not a broker, gold miner, or the brother-in-law of one of the above companies' CEOs or anything like that. I do own some shares of Alamos Minerals, since I take my own opinions serioulsy.

[I edited this message to more clearly identify it as a personal opinion with some examples given. I also added the final sentence in the spirit of full disclusure.]

 

[Scrapster]

Woo hoo! Now only if I actually owned something gold.

 

[DesignDawg]

You may not be the brother of a miner, or any of that stuff, but beware..... Giving stock advice like this on the net could get you in BIG trouble. If you hit a few places, and people buy the stock, then you sell it, it's called a
"pump and dump" scheme. --ANd I saw on the news not too long ago that they busted the HELL out of a KID for doing that very thing. If I were you, I wouldn't be doing anything that could artificially raise the value of that company's stock, just for your own safety.

Ricky
DesignDawg

 

Why is it illegal?
I don't see the problem with the advise hes giving.

 

[konichiwa]

It's only illegal if he is posting this message with the sole purpose of artificially inflating the price of a stock he owns, and afterwards, selling it for his own gain or profit. It is not illegal if it is simply advice given from person to person. Not that I don't trust your opinions/advice, Maetryx, but I would just warn everyone that if you're going to invest money that you can't afford to lose (not pocket change) you should do some digging yourself. Just a word of advice.

EDIT

BigSmooth gave quite a good example of a pump and dump scheme.

 

[Jmman]

There are fundamental reasons why gold has not significantly increased in price for quite some time. Nothing has changed, and IMHO, gold is not a good investment.....

 

[BigSmooth]

SammySon: there is basically an opportunity for fraud. I'm not saying Maetryx is doing this at all but here's how it would work.

Let's say "Mr. Giggles" owns 1,000,000 shares of XYZ at 5 bucks a share, the current price. Mr. Giggles decides to start telling everyone and their brother how great XYZ is and how it is going to go up to 10 bucks a share within 6 months. He does this even though he is not licensed in any way and he has no reason to believe it will go up that much.

Well, some of these people believe Mr. Giggles and it ends up that they call their brokers and tell them they want to buy some XYZ. As more people buy more and more XYZ, the price slowly rises until it is at $7.50.

The stock goes up to $7.50 because Mr. Giggles has "manufactured" demand for it (and this is the "pump&quot.

When the stock finally hits $7.50, Mr. Giggles decides to cash out and sells all of his stock at $2.50 profit per share (the "dump&quot.

The market is now flooded with overpriced XYZ, and since there was never a real reason for the inflated price, the stock drops back down to $5. All the people who started buying it after Mr. Giggles "recommended" it are now screwed, because they paid between $5 and $7.50 for the stock and there is no guarantee it will ever get as high as $7.50 again.

This is a very simplified example, hope it makes sense.

 

[urameatball]

I heard the urameatball fund is also a great place to put your money

 

[LadyNiniane]

Yep, right...

Ever heard of Bre-X?

The last thing I would invest in would be stocks of a company whose commodity is priced solely by its perceived value as a form of currency.

Lady Niniane

 

[Maetryx]

Maetryx here,

In the spirit of full disclosure, I will admit that I hold some shares of Alamos Minerals. But I would be kind of daft if I thought owning shares of Alamos Minerals (or something else) was a great idea, but didn't act on it myself.

The soul of my message is that gold mining stocks as a whole should be doing quite well if our economy keeps faltering and the value of the US dollar finally slumps. Gold prices have been low for years now, and a lot of the precious metal websites and columnists believe that the price has been kept low artificially to bolser the value of the US dollar. Further, they think it will be time to pay the piper soon as reality of gold demand finally runs its course.

Finally, the people getting busted for pump and dump committed a crime by creating false news releases and fake quarterly reports. They committed fraud and forgery. On the other hand, I'm telling you my opinion based on amateur research. I suppose I'll edit my initial post so it will no longer label itself as "advice" and change the phrasing of Alamos Minerals stock portion so that it no longer says "is a bargain". CYA time for me.

Thanks for the warnings, as it is not my intent to cause or be in trouble.