Another huge day for gold and gold stocks...
The precious metal jumped more than 2% to $1,339 an ounce. This is the fourth-consecutive up-day for gold.
The gold-stock fund Market Vectors Gold Miners (GDX) jumped nearly 6%. And Barrick Gold, the world's largest gold miner, is up 5.5%.
Junior miners – the smaller, more volatile gold stocks – are also ripping higher... The Market Vectors Junior Gold Miners Fund (GDXJ) is up nearly 10% on the day.
One reason gold is soaring... The world's largest gold bullion fund, SPDR Gold Trust (GLD), reported on Friday it increased assets 1.8 metric tons to 911.13 metric tons. It was the first increase since June 10.
Demand from China is also rising...
China, the world's second-largest gold market behind India, increased its gold consumption in the first half by 54% from a year ago. Buyers stepped up as gold prices slid.
According to the China Gold Association, Chinese individuals purchased 703.36 tonnes of gold in the first half of this year. That compares with 832.18 tonnes for all of 2012.
And the shorts are covering...
Last week, gold shorts covered 23,518 futures contracts. That's equivalent to 2.35 million ounces of gold. Financial blog Zero Hedge reports the last time gold shorts fell this fast was in 1999/2000. Gold prices jumped 33% in three weeks.
As you can see below, speculative metals traders are still bearish on gold, so we could see plenty more upside... (We discussed how to use the so-called Commitment of Traders report to gauge speculative interest in metals in the July 31 Digest. As the blue line falls, traders are getting bearish.)
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Silver rose 4.5% to more than $21 an ounce. Precious-metals expert John Doody calls silver "gold on steroids." He means silver is more volatile than gold.
When gold goes up a little, silver soars. And when gold prices ebb, silver prices tank… For instance, gold fell 33% from September 2012 to June, while silver lost nearly half its value.
And according to DailyWealth Trader co-editors Amber Lee Mason and Brian Hunt, silver may be about to tear higher...
Like gold, speculative traders have a historically high number of short positions against silver. Rising silver prices will force these traders to cover, sending prices even higher.
Amber and Brian also like the "technical" setup of silver's price chart. "It's strung together a short series of 'higher lows' and 'higher highs.' It's likely the start of an uptrend," they said in today's issue of our free e-letter Growth Stock Wire…
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You can read all of their comments in today's Growth Stock Wire here.
Amber and Brian described the setup for their subscribers on Friday morning (before silver's big move)… And they recommended the best way to profit from an upswing. Subscribers who followed their recommendation are already up 5% on the position.
The U.S. government's plan to get more taxes from expatriates is backfiring...
Expats filing to give up their nationality at U.S. embassies increased to 1,131 in the second quarter, up from 189 a year ago – a six-fold increase. That brings the total for the first half to 1,810.
The U.S. is the only one of the 34 member nations in the Organization for Economic Cooperation and Development that taxes its citizens wherever they live. And instead of focusing on the fundamental problems plaguing our nation (like health care and entitlement programs), the government is instead continuing its focus on milking the rich.
The goal of the Foreign Account Tax Compliance Act (FATCA) is to find and penalize U.S. citizens with assets abroad. FATCA requires foreign financial institutions to report to the IRS information about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers are substantial shareholders. According to the congressional joint committee on taxation, FATCA will generate $8.7 billion over 10 years – enough to cover half of Detroit's municipal debt.
"With the looming deadline for FATCA, more and more U.S. citizens are becoming aware that they have U.S. tax reporting obligations," Matthew Ledvina, a U.S. tax lawyer with the Swiss law firm Anaford AG, told Bloomberg. "Once aware, they decide to renounce their U.S. citizenship."
One of Canada's best investors, Brookfield Asset Management CEO Bruce Flatt, is bullish on America...
Brookfield is an asset-management firm with more than $180 billion under management ($100 billion of that is already in the U.S.). The company predominantly invests in real estate, infrastructure (like pipelines and toll roads), renewable electric power, and private equity.
Dan Ferris recommended Brookfield to Extreme Value readers in April 2012. Subscribers who followed his original recommendation are up 20% on the position. In his original recommendation, Dan noted the excellent historical returns Brookfield shareholders have enjoyed:
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And today, Flatt plans on producing outstanding returns by investing in the U.S... "We're very bullish on America. The economy is doing extreme well," he said in an interview today with CNBC. "Housing is coming back. Retail is coming back. [The] shale gas revolution is doing a lot of things. Manufacturing is coming back."
Flatt also reiterated his firm's focus on "real assets" to beat inflation...
"We think real assets... will be a base of institutional client portfolios over the next 10 years... Real assets are not fixed-income investments. Often they are confused," Flatt said. "These real assets, the cash flows will go up with inflation. They'll go up with business conditions. They'll go up as America gets better and every other country gets better."
In the August 2 Digest, we told you about a market anomaly Porter has been exploiting to help subscribers generate massive returns on margin...
It's called "Alpha." As we wrote in that Digest:
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And the anomaly is working in our favor. Since launching the service last year, we've closed six Alpha positions for an average gain of 79% with an average holding period of 4.67 months.
And the average gain for positions that are still open is 35% with a two-month holding period.
It's an incredible performance... one we'd encourage you to consider for yourself.
New 52-week highs (as of 8/9/13): Energy Transfer Partners (ETP), Fission Uranium (FCU.V), Fluidigm Corp (FLDM), Laredo Petroleum (LPI), and Qlik Technologies (QLIK).
After Porter writes the Friday Digest, where he attempts to teach our readers something, we see lots of cancellations. But in today's mailbags, we see two folks who are sticking it out... Send your feedback to feedback@stansberryresearch.com.
"I know you love your 'there is no teaching; there is only learning' line, but you know better. Teaching like music, painting, or any art is a personal expression, a giving of yourself for the benefit of others. They may appreciate it, even become passionate about what you share. You can't be responsible for their response, but the typical response probably speaks to your skill. I think you are an artist in your own right. Don't worry about the few who hate your art when millions come back for more.
"With that said, I want you to know I really enjoyed Friday's Digest on August 9. This is good solid analysis of historic data. It doesn't mean it will map to the future, but we certainly have no better source of insight than actual events of the past.
"Like so many professionals, I'm busy and my time is precious. I often skim the Digest, but not on Fridays! Keep up your 'futile efforts' because some of us plan on learning until the lights go out." – Paid-up subscriber Bud Jenkins
"Awesome stats on stop losses. I would think this makes your job easier by taking the pressure off you from giving out sell recommendations at all.
"Porter is surely being coy when prefacing his Friday Digests with predictions of mass cancellations. I feel it's quite the opposite: The Digests alone are worth more than the price of a newsletter." – Paid-up subscriber Rudolf Martin
Regards,
Sean Goldsmith
Miami Beach, Florida
August 12, 2013
If a cop says, "Do you mind if I search your vehicle?" You say, "Actually, officer, I am not going to answer any questions or give you permission to search anything until I've had the chance to speak with an attorney."