Gold Q&A: Answers to our Subscribers' Most Pressing Questions

• Can an unbalanced U.S. budget have meaningful impact on precious metals?

  July 29, 2011, 12:00 PM

  “The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome should become bankrupt. People must again learn to work, instead of living on public assistance.” What do you make of this quote? Can the U.S. fiscal policy have an impact on precious metals prices?

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• Can gold miners deliberately sit on their reserves?

  October 28, 2011, 12:00 PM

  Current prices for gold equities exhibit a low correlation with the price of gold. With the bull market in gold and historically low interest rates, it benefits these companies to sit on their reserves. This increases their book value, but because investors and equity analysts focus primarily on shorter-term earnings, their stock prices may be lower as a result. Do you expect gold miner equity prices to languish for a long time, underperforming other industry groups?

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• Can I profit on options even if I'm wrong several times?

  October 15, 2010, 12:00 PM

  Is it possible for me to manage to increase my portfolio if several of my predictions turn out to be off the target? I know: you’re wrong, you lose, but is there perhaps a way to profit even if I have made a series of bad decisions?

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• Can I use fundamental analysis alone?

  October 29, 2010, 12:00 PM

  I don’t feel comfortable reading charts myself. Do I have to analyze them or can I stick to fundamental analysis? Some of the experts I've been reading suggest I can use fundamentals alone. Is this right?

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• Can I use mining stocks as “leveraged gold?”

  October 12, 2012, 12:00 PM

  I have some thoughts for your comments: First, I think many of us are holding much of our 'investment' capital in various retirement vehicles. As you point out, getting in or out of long term investments is an infrequent occurrence, but still, selling or acquiring physical metal in these vehicles is pretty involved and also takes some time. Additionally, I have always looked at mining stocks as a sort of 'leveraged gold', the place where the real money can be made, precisely because these stocks either under- or over-perform.

  Therefore, the idea is to be aware of what they are doing presently and adjust investment moves accordingly. In short, try to use a lot of money and a few very well supported moves to make a profit, rather than accomplish the same results through many, many trades with much smaller amounts of capital each time.

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• Can I use some of your indicators for trading GDX and XAU?

  December 21, 2012, 12:00 PM

  Can one also use the "gold stock" indicators for trading GDX and XAU, or is it exclusively for HUI? If not, would you be willing to develop indicators for those two as well?

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• Can it be profitable to invest in gold in India?

  December 28, 2012, 12:00 PM

  I read your articles, and found them very helpful. Thank you for your devotion to the average investor. Can you shed some light on the following regarding India:

  1. If the dollar collapses, what happens to gold vis-à-vis the rupee?
  2. We currently receive 9% interest in a fixed bank deposit. Inflation is 8%. Would it be more profitable to invest in gold in India? And will gold provide returns greater than inflation?
  3. Does fiat currency exist in India?

  Insight on the above would be very helpful. Thanks and regards.

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• Can silver really be considered as insurance?

  October 12, 2012, 12:00 PM

  I realize all of the arguments one could make in favor of silver. Still, I can't see gold going to $800; I can see silver going to $15 though; so does it really belong in the 'insurance' category?

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