Silver News

The Mission Of The Silver News Surfer Has Always Been & Will Always Be - To Preserve Your Wealth, Protect Your Purchasing Power and Create Generational Wealth!

May Health Wealth And Success Be Yours!

China Mining Some Gold For A Staggering $2,500 An Ounce

December 6, 2013 8:51 am est

The Mission Of The Silver News Surfer Has Always Been & Will Always Be – To Preserve Your Wealth, Protect Your Purchasing Power and Create Generational Wealth!

May Health Wealth And Success Be Yours!

Now, onto protecting your wealth…

As we sit and get ready for the Non Farm Payrolls and watch with bated breath, lets put on our thinking caps shall we. If the numbers come out positive for November, what would you think the main contributor would be? If you guessed seasonal part-time retail jobs, pat yourself on the back for a good guess.

It’s because of these Three Charts Obama Hopes You’ll Never See that gives us just one more reason Why Fed Will Print Longer Than Market Expects and not taper at all – for a long time.

When you consider that True Inflation Is Running at 7.7% and not the -2% the FED suggests, it gives us confidence that we are in the right place at the right time. When you see this Rare Signal – Producer Merchants Net Long Gold  it gives us confidence that the market is bottoming here and about to turn around.

Could there be a bit more weakness? Sure, anything is possible. But as I remind you, a bottom is a range, not a price. The only ones who can catch a bottom (price) are the same people who create it (the cartel) and that is not you or I – So why fight with a dollar down in silver and  seventy five or so in gold – its too stressful. Furthermore… What does that accomplish for you? Would you stand on a chair and scream “Yeah baby – I picked the exact bottom?”

I personally don’t stress myself out with picking tops and bottoms, life is too short to create too much stress – Besides, It’s the spread in between the top and the bottom where the money is made.

Let me give you an example…

I talk a lot about dollar cost averaging your positions – Here’s how it would work. Lets say you had $100,000 to allocate towards silver in this example. We would start our with a $50,000 purchase today (at these levels) and sideline the other $50,000.

If the price came down lower than our initial purchase, we would add another $25,000. If the price fell further, we add another $10,000 and then finally the last $15,000. (we also need to keep in mind that the reverse is true and we could be buying at higher prices)

As the market starts to increase and looks toppy, then you use the same exit strategy – Dollar cost average out. We do this “just in case” we are wrong – we never want to be totally out of the market (such as the case of 2011) because once the momentum starts and everyone and their brother starts jumping in, it can get oversold quickly and last for a long period of time before it corrects (such as the case of February thru April 2011 and the DOW today – (See Wall Street: The day of reckoning nears)

You see friends, the reason we do this is because this market could take off in a moments notice – When you see things like these 2 Fantastic Charts Show Gold May Quickly Surge $200  be ready and be prepared – that’s all I’m saying.

When doing business with the Silver News Surfer, there is a strategy in place. Not just throwing a dart at a dart board and hoping you hit the bulls-eye – we have a true and meaningful wealth building, wealth preservation strategy for you.

We all, including myself have learned valuable lessons from 2008 & 2011. However, it is with past lessons learned that makes us better strategists today. I truly don’t believe that you will find anyone else willing to work as hard for you as I do.

Courage and Conviction – JPM is NET LONG Comex gold futures to the point of having cornered the paper gold market. Since, for now, paper Comex trading continues to determine global price, nothing could be more important.

As we’ve documented here since last July, in 2013 JPM has successfully converted what had been a massive NET SHORT Comex gold position into an equally massive NET LONG Comex gold position. This position is likely near 75,000 contracts as you read this. As a percentage of open interest, that is nearly 20% and a clear and undeniable “corner” on the LONG side.

 Though they have rolled and extended the majority of this position into 2014, they are standing for as many as 7,000-8,000 deliveries in December. Thus far, through just the first four delivery days, the JPM House Account has accounted for (stopped) 1,011 of the total 1,086 deliveries made. That’s 93.1%. So, please follow along with me here:

• Comex paper trading sets global price

• JPM is the Big Kahuna in Comex metals trading

• JPM is NET LONG to the point of cornering gold futures

• JPM is taking delivery of 93% of the December contracts

• Unlike the past, it now clearly benefits and profits JPM to see prices rise

And you seriously think gold is headed lower from here?

Therefore, remain patient and diligent. Watch for a turn in price off of the June lows. A December move back above $1250 in gold and $21 in silver will begin the process of Spec unwind and short squeeze, setting up a continued rally in January. By holding physical precious metal, you are protecting and insulating yourself against the certain global economic madness of 2014 and beyond.

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Allow me to assist you in understanding these ever changing and challenging financial markets and more importantly, how you can profit on the upside potential and protect yourself from the downside risks….

Now, onto the breaking news that matters…


China Mining Some Gold For A Staggering $2,500 An Ounce I thought that gold would go down and test its lows at $1,180, and maybe even break that level just a little bit as part of a bottoming process, but gold is acting better than I expected.

China is actually mining some of its gold at projects inside of China at staggering “all-in cash costs in the $2,000 to $2,500 range.”  Acclaimed money manager Stephen Leeb believes this has incredibly important implications for what the Chinese believe the price of gold will be trading at in the future.

China is the world’s largest producer of gold, and they keep all of that gold production.  So not only are the Chinese vacuuming up all of the gold from the West, but they are also keeping the world’s largest volume of production for themselves as well.

So here you have a country that is buying gold hand-over-fist, and they are mining gold as if they know it’s going to be priced at a minimum of $2,000 to $2,500.  As an investor, I’m not going to fight them.  It’s one thing to say, ‘They are buying gold.’  Well, they are buying gold at around $1,200, but it’s another thing to see them mining gold at all-in cash costs in the $2,000 to $2,500 range on some of these projects in China.

So either you believe the Chinese are idiots, or you believe they are correct in their belief that gold is going to surge well over $2,000 an ounce in the not so distant future.  I’m betting the Chinese are right and gold is going a hell of a lot higher from here over time.”

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Buy gold, not stocks, because “nothing is safe anymore” – “The safety is in diversification,” says Marc Faber “I just want to warn your listeners it’s not a good time to buy stocks,” Boom Gloom & Doom Report publisher and contrarian economist Marc Faber tells Fox Business in a recent interview. “Maybe you make another 5% or another 10%, but the big move, the market from the lows in March 2009, is up almost three times.”

Where to turn, then? “I’m afraid that nothing is safe anymore because if you are in cash, maybe it will be appropriated, or as you know we have zero interest rates and we have lost the purchasing power of paper money. You can buy a Picasso, but who knows what the value of it will be in five years’ time. The safety is in diversification.

The precious metals are the one sector in the market that is very depressed. We’ve had a huge correction. We may go down somewhat more. But the sentiment, compared to say stocks, where the sentiment is very optimistic, sentiment on precious metals is extremely pessimistic. Everybody thinks it will go down further and so forth. It may still go down somewhat. But I think should own some gold in their asset allocations.”

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Silver and Gold as Currency Commodities – Gold and silver have a 6000 year history for their use as a currency, and until the last century, the price of gold and silver maintained a healthy valuation ratio of 1 ounce of gold to every 15 ounces of silver.

This purchasing power ratio is strengthened by the fact that there are 17 ounces of silver for every 1 ounce of gold in the earth’s crust, although physical silver stocks have dwindled as the metal is used in a wide variety of industrial applications.

It has long been said that an ounce of gold will buy a custom-tailored men’s suit. In the 1930s, an ounce of gold cost $35, and a suit was nearly the same price. Today, gold trades for just under $1300 and a custom suit does as well.

With silver, similar comparisons can be made. A US silver quarter that circulated before 1965, containing 90% silver, would still buy the equivalent amounts in terms of fuel and food.

However, how you adjust for inflation is just as important as inflation itself. Using dollars as the benchmark, the peak of gold and silver prices in the 1980s of $850 and $50 per ounce respectively, would be at least $2500 and $150 today using the consumer price index as calculated by the government.

if you were to use the expansion of the money supply as inflation, today’s gold price should be at bare minimum $7,000, and as high as $14,000 if bank bailout promises are taken into consideration. Silver should be a minimum of $450 with a maximum of $900 per ounce. However, should those price points be reached, gold and silver’s popularity as an investment will only increase, further stoking the fires of demand and increasing prices.

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