If you think it’s too late to profit wildly from gold’s rip-snorting bull market, think again.
First, when gold and gold shares suffer a normal, temporary correction — as they did yesterday — it opens up a convenient window for you to jump in.
Second, after this minor pause, I see gold making a beeline for $740 … then challenging its all-time high of $825 … and next heading toward $2,100.
Third, with the way gold is moving, you don’t even need a huge move in the yellow metal to profit wildly. In fact, all you need right now is a minor 15% rise to go for a whopping 348% gain.
I’ll show you precisely how in just a moment. But first, I want to tell you about three new explosive forces driving gold higher:
Explosive Force #1
China’s Central Bank Could
Quadruple Its Gold Reserves
That’s what a top-level Beijing economist recommends, and I believe Chinese officials are going to act on it.
The Chinese are buying up practically every natural resource in sight, from oil to copper, to zinc, tin, and aluminum. They’re building strategic reserves of every one of the precious natural resources and more. So why would they exclude gold?
Indeed, the Chinese Central Bank is under pressure to diversify the risk it’s carrying on its $875 billion of dollar reserves, and the single best vehicle is gold.
Right now, at just 1.3% of reserves, China’s gold holdings pale in comparison to those in the U.S., Germany, France and other countries, where the average is 5% – 6% of reserves.
If China were to increase its gold reserves to just half that of Western levels, it would be enough to send gold well over $1,000 an ounce, in a heartbeat. And if it were to quadruple its reserves, that alone could be enough to drive gold to $2,000.
Explosive Force #2
South African Gold
Output Plunges 9.3%!
For years I’ve been warning investors that gold supplies would be plunging, even as the price of the metal soars.
Reason: South Africa’s gold mining industry, the biggest source of gold in the world, is in shambles from labor strife, political problems, and old mines just simply getting worn down and depleted.
Now, we have confirmation. Just this week, we learned South African gold production plunged a whopping 9.3% last year, one of the worst production declines in South Africa, ever! It couldn’t come at a worse time.
Explosive Force #3
Gold Miners Expected to Double
Their Purchases of Gold!
It’s called de-hedging. It occurs when miners are caught flat-footed in a bull market in gold, and their forward sales of the yellow metal at previously low prices are killing them. So, they must go into the market and BUY gold in order to stop the bleeding.
And boy, are some of them bleeding: According to the latest data just released, as of the end of March, large gold miners had sold short over 48 million ounces of gold and were losing nearly $12 billion on those hedge sales.
That was when gold was at $582 an ounce. With gold now at $725 an ounce, the loss is more like $15 BILLION.
Now, as these large miners cover their hedges and buy back gold, the de-hedging is going to remove millions of ounces of supply from the market. An estimated 11.7 million ounces will have to be bought by these mining companies this year.
My view:
These Forces Could Help Drive
Gold up Another 30% to 40% in a
Surprisingly Short Period of Time.
But …
All you need right now is another 15% rise in gold to turn a modest $4,800 into as much as $21,500, minus any commissions you pay your broker. That’s a whopping 348% gain! And it can happen in less than 8 weeks.
This is some of the best leverage in the most powerful rip-roaring gold bull market of all time, and it’s just warming up.
Just in the Last 8 Weeks, Gold Has Surged 34%!
The Next 15% Rise Could Come Even More Quickly!
In early March, gold was selling at $540. This week its closing high was $725. So just in 8 weeks, it jumped by more than 34%.
So you can see, it hasn’t taken much time or much news to drive gold up by 34%. I believe it will take even less for gold to rise another 15%.
Gold is on fire. It’s gaining momentum. And there’s NOTHING I can see on the horizon that can stop it.
Here’s How to Use It to Turn a Modest
$4,800 Into as Much as $21,500!
The mechanism: Select call options on gold futures contracts and gold mining shares.
For instance, one of the options I’m looking at right now lets you effectively control about $70,000 worth of gold for just $1,200.
Think about that again: If you were to buy that much gold, you’d have to shell out $70,000. But with these options, all you have to do is invest a modest $1,200 to effectively control the same amount of gold. Your risk is strictly limited to the investment, plus the commissions you pay your broker.
Meanwhile, you get all the upside potential.
With $70,000 worth of gold working in your favor, you can see how a small 15% rise in gold’s price can easily spin off big profits. In this case, I figure about 348%.
Each $1,200 option could become worth as much as $5,375. Buy 4 (your cost: about $4,800) and you could walk away with $21,500, less any commissions you pay your broker. Buy 8 and you could walk away with up to $43,000!
Are profits guaranteed? Of course not. But even if gold rises only 7% or 8% at this juncture, the profit potential is still huge.
And even if I’m totally wrong, as long as you stick with my strategy, the most you can lose is your original modest investment plus any commissions you pay your broker.
That lets you sleep nights. You won’t be missing this move. And you’re not betting the farm.
Here’s What I Propose …
First, I will rush you my strategy for transforming a modest 15% rise in gold into as much as a 348% gain. I will tell you exactly what to buy, when to buy it, how much to buy, what to pay for it, and precisely what instructions to give your broker.
Second, I will send you follow-up instructions on when to take profits, add new positions, or get out of a position to cut a loss.
Third, as the gold market zooms higher, I will give you one new recommendation after another, each designed to give you the maximum leverage without ever risking more than you invest. That way you can sleep nights even when gold suffers a correction, something that will happen from time to time.
You’ll get about 25 – 30 new recommendations per year. And when I see a special situation in a related market, I won’t pass it up. For example …
- Platinum is already at $1,250 per ounce — an all-time record high. It’s even rarer than gold. I think it could go to $3,000.
- Palladium is even rarer than platinum. It’s just STARTING to take off. This is one of those hidden gems that most investors ignore. Big mistake!
- Copper has surprised everyone. Its rise is parabolic. Huge opportunities there. But I’m expecting a correction. Now is not the time to buy.
- Don’t forget silver. Its price swings are huge. It offers unique profit opportunities not only on the way up … but also on big corrections.
Fourth, in case you’re new to some of these markets, I will send you my Operating Manual, which gives you the A-B-C’s on how each of these markets opens up such big profit opportunities for you … and which instruments to use.
For example, I show you how options give you incredibly powerful leverage on the upside. How they limit your risk. How you can maximize potential profits … how to reduce commission costs … what to ask your broker … and much, much more.
I show you how to use options on stocks and options on futures. I also show you why I don’t think you should get involved in futures contracts themselves. Stick with options. That way you can sleep nights.
Fifth, if you have questions, you can call or email any weekday any time and we will give you our best answers immediately.
My service that provides all this is Gold Trader Hotline, and the cost is $5,000 per year.
But in light of this once-in-a-generation bull market in gold, I want to give you TWO years for the price of one.
Historically, gold bull markets have run for an average of seven years, with the last two years packing the most powerful punch. This bull market began in 2001, so I figure it’s going to last until at least 2008, and these next two years are going to be doozies.
With your two-year membership locked in right now, I think you have the best chance possible to ride this bull to the max.
If you can’t afford to spend $5,000 without worrying about it — or jeopardizing your capital — don’t join. Instead, invest that money in less aggressive instruments such as a good, diversified gold mutual fund.
I cannot guarantee profits. This is a speculative service for your speculative money. But in my view, there’s nothing like a bull market in precious metals for rip-snorting profits — like the potential to turn a $4,800 investment into $21,500 with just a modest 15% rise in gold.
And here’s what I can guarantee: If you wish to cancel at any time, for whatever reason, you will receive a pro-rated refund, with the first year’s subscription valued at $5,000.
Act now. The Gold Market
Isn’t Waiting Around for You!
Gold is on fire. The next 15% move up is yours for the taking. The number to call: 800-408-0081.
Best wishes,
Larry Edelson
For more information and archived issues, visit http://www.moneyandmarkets.com.
About MONEY AND MARKETS
MONEY AND MARKETS (MAM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Larry Edelson, Tony Sagami and other contributors. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MAM. Nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MAM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical inasmuch as we do not track the actual prices investors pay or receive. Contributors include Sean Brodrick, John Burke, Beth Cain, Red Morgan, Ekaterina Evseeva, Amber Dakar, Michael Larson, Jennifer Moran, Monica Lewman-Garcia, Julie Trudeau and others.
© 2006 by Weiss Research, Inc. All rights reserved.
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