Gold's London AM fix this morning was USD 1,727.00, EUR 1,302.22, and GBP 1,093.17 per ounce. Friday's AM fix was USD 1,715.50, EUR 1,295.21, and GBP 1,084.25 per ounce.

Cross Currency Table - (Bloomberg)

Gold opened in Asia nearly $13 higher at $1,734.90/oz (after closing at $1,719.60 on Friday) prior to giving up those gains and trading back near Friday's close at $1,720/oz in early Asian trade. It then gradually rose back to challenge the $1,734/oz level and is currently in the middle of the range between $1,720 and $1,735 (see chart below). Traders in Hong Kong say that the Chinese continue to buy gold on any weakness. Bullion buying from China and the rest of Asia (more below) may have led to the spike higher at the open in Asia.

Risk aversion has increased and stock markets have risen after Greece's parliament finally approved the austerity bill to secure

Greece: Parliamentary elections in April 2012

D-Day for Greece was 20th March, when a €14.5 billion bond repayment must be covered. Without a bailout, a default would have been unavoidable. Greece has agreed to a controversial package of austerity measures in order to appease the eurocrats and the IMF in return for a 130bn-euro ($170bn: £110bn)

Part of my strategy for investing in the coming boom in mining/resource stocks is to focus on areas that I believe will be particularly prosperous. Such areas are characterized by favorable geology (i.e. an abundance of valuable minerals, and faults in the earth that make mineral extraction cost-efficient) sufficient infrastructure (roads, power plants), and a jurisdiction that is sufficiently pro-mining and with enough geopolitical allies to allow for opportunities via imports and exports. Ideally, we also want to see a sufficiently developed value network that allows for specialization -- whereby some companies can focus on drilling, others on the prospector model, setting the stage for M&A opportunities.

From this perspective, I believe Eritrea is increasingly well-positioned. And when we consider that Eritrea is still not on the map and disliked, irrationally in my opinion, by many investors because of UN sanctions, I think the story becomes even more compelling --

Interesting to watch the media scramble to come up with reasons the markets do what they do - ebb and flow. Gold and silver prices declined for the week and here comes chicken little again "the sky is falling, the bubble has burst, blah, blah, blah". The flavor of the day pinned lower metals prices on the ongoing Greek debt deal.

There was an "eye catcher" though on Kitco.com. Allen Sykora said:

Precious metals, along with most other markets, were caught in a "Greece fire" on Friday as a deal struck to get the country its second bailout appears to have been scuttled by last minute demands from European leaders.

The wisdom of the street dictates that any sovereign debt default within the eurozone will weaken the euro, strengthen the U.S. dollar and in turn weaken equities, Treasuries, and precious metals. Gotta be that way folks - no ifs, and,

Stocks have quite a few variables that can impact their prices over the near term. Expectations about free cash flow and earnings per share, "sector rotation," high-frequency-trading, and apparently right now, the whims of Angela Merkel and dozens of other European politicians.

Relatively speaking, gold prices seem simple to derive. It seems like classic economics. There is a downward sloping demand curve, and upward sloping supply curve. You find where these two lines intersect, and you magically have a market price. So simple... Unfortunately, it's not that easy, and the recent volatility in the price of spot gold suggests that the market really can't settle on the efficient market price.

Does that mean free markets don't work? Absolutely not, but we try to find the intrinsic value of assets (or a mid-cycle price/value substantiated by fundamentals), which makes determining the price of gold much more difficult than you might expect.

Platinum has yet to recapture the highs seen in 2008. Is there opportunity here for an investor or a warning that not all precious metals are the same? The focus of this article will be to compare platinum with gold and silver to determine which provides the best return with the lowest risk.

Overview

Platinum is the eighth rarest element found in the earth's crust. It is difficult to obtain, as 30 tons are produced annually. As a comparison, 2,800 tons of gold and 23,000 tons of silver are produced annually. Platinum has extensive industrial uses, with catalytic convertors and laboratory equipment as two of the most prominent. (Source Wikipedia).

Performance

With extensive industrial uses and difficulty in obtaining the product, the potential for explosive gains due to supply /demand equilibrium seem to be in place. Unfortunately, this has not been the case, as evidenced by the chart below.

Platinum

I have a discriminating eye for commodities stocks, given that the underlying companies have difficulty creating strong brand names or differentiated products. Thus, commodities players compete on price. Lowest cost basis wins. This article identifies and analyzes the low-cost players in the precious metals market from which investors can profit.

Freeport McMoRan (FCX) trades around $46, has a year high of $58.75 and a year low of $28.85. The price earnings ratio is 9:57. The earnings per share are $4.78. The dividend yield is 2.20%. Total cash is $4.82 billion and total debt is $3.54 billion. The current ratio is 3:42 and book value per share is $16.50. The company is a mining industry leader with geographically diverse assets and significant proven and probable reserves of copper, gold and molybdenum. It operates seven open pit copper mines in North America in Arizona, and New Mexico. Some of the North American

The news Sunday from Greece of the vote in favor of additional austerity measures is an early Valentine's Day gift for investors in gold. Why? Simply put, a disorderly default by Greece would have significantly strengthened the U.S. dollar and hit gold prices hard. Let's review the charts.

Gold, denominated in U.S. dollars, had already been affected by the ramp up in Greek drama late this past week. As concerns mounted that Greece would not be able to commit to further austerity measures required by European officials, the U.S. dollar began to gain steam and gold plummeted.

The chart below displays this dynamic using GLD, the largest gold ETF, as a proxy for gold versus the U.S. dollar. Note the spike in GLD as news broke mid week that Greece would initially receive the bailout. Then witness the subsequent decline in GLD and rise in the U.S. dollar as concerns

If you are invested in a gold miner, you may have taken some punishment possibly over the last year, and it may now be time to pull the plug and exit. Yes in recovery from the 2008 turmoil, 2009 provided a great year of gains for the gold miners. The gains continued in 2010, with growth throughout that year. Then in 2011, with the economic uncertainty, the Middle-Eastern Spring and the antics of PIIGS in Europe, the price of gold reached new highs of $1900 USD an ounce, yet the gold miners struggled. This is depicted in the two charts following:

(Click charts to expand)

The price of gold for the last three years in the above chart shows continued appreciation until a peak in September of 2011. Since then the gold price has been showing declining highs and declining interest.

The chart following shows the GDX ETF of large-cap

Many investors have allocated into gold as a potential stock market and currency hedge, pointing to global money printing and expanding sovereign debt loads as a reason to hold their own reserves. Another option is to invest in gold miners, including several large-cap producing miners that presently provide a dividend.

Over the last few years, gold appreciated to a considerably greater degree than the vast majority of gold miners, largely based upon a broad expectation that gold could not sustain its prior price and will not maintain the present price-range. Despite this expectation, if gold prices do not fall, the significant disconnect between gold and the miners should eventually narrow.

If gold prices continue to increase, the miners should ultimately benefit more dramatically than the commodity due to the catch-up that the miners will have to initially undergo. Moreover, since miners are presently priced with the belief that gold prices

As we all know, two things affect the price of all things tangible and intangible - supply and demand.

On the supply side, Gold stays remarkably fixed. It is mined at a very consistent rate year round with factors such as weather and temperature having much less influence than other markets such as soft commodities. In addition to this, supply can only vary rather gradually from a mining standpoint, given that it takes around a decade to bring a new find into production. However, any seasonality in

The coming week is peppered with quarterly releases of gold producers. Input inflation of energy, labour and equipment will be in the spotlight as well as the usual suspects: earnings, cash flows, production growth and project advancements.

Barrick Gold Corporation (ABX)

Reporting on February 16, 2012 for the quarter ended December 31, 2011; Barrick is expected to report earnings per share of $1.25, according to the consensus estimate.

Barrick trades on the NYSE and has a market capitalization of about $48.14 billion.

The company operates 26 mines and has projects in five continents. Most recently, the company was criticized by some for the acquisition of copper producer Equinox Minerals, arguing the the company's shares will not provide the pure leverage to the price of gold.

Gold Corp. (GG)

Reporting on February 15, 2012 for the quarter ended December 31, 2011; Gold Corp is expected to report earnings per share of

So far, 2012 YTD has been a stellar start for equity markets. Not only are equities up across the board, so are precious metals.

While the gold-miners-to-gold-bullion ratio remains unusually low, some mining stocks have tracked the broader gains. (Note: the gold-miners-to-gold-bullion ratio has been suppressed over the past few years with the growing popularity of ETFs exposed to the price of gold bullion.) Below, I highlight the 5 gold and silver mining stocks (with a market cap over $2b) that have performed best so far this year:

Ticker	Company	Performance (YTD)
(SLW)	Silver Wheaton Corp.	23.14%
(CDE)	Coeur d'Alene Mines Corporation	15.12%
(FNV)	Franco-Nevada Corporation	15.09%
(ANV)	Allied Nevada Gold Corp.	14.96%
(AUQ)	AuRico Gold Inc.	13.98%

Note: SLW and CDE are silver miners.

While momentum has been strong, that may not necessarily mean these are great investments. However, it does suggest these are higher beta stocks that may

<<Back to part II

Inverse ETFs are a great bear market option, but they may still appear too risky for investors looking for longer term safety. Gold, an investment known for its safety and reliability, though generally not the most exciting of investments, can provide a sanctuary for long term investors.

I am often asked, "Gold is near its all-time high, do you really think it will continue to rise?" Yes I do. As many know, when adjusted for inflation, gold is actually still a bit below its all-time high. As shown on the graph below, which is priced in current U.S. dollars, gold's peak occurred in 1980 when it reached a then $850.00, a price of $2358.04 in today's dollars.

(Image source: inflationdata.com)

As of this writing, gold is trading in the $1750.00 range, about $600.00 below its all-time high. Also, with the potential of devaluing currencies (discussed in

As we expected last week, silver has been consolidating in a corrective fashion over the last few days. It has been moving within the target range for the pullback that I have been watching. While the correction may be complete, I think it is more likely that there could still be one more drop that occurs in the upcoming week.

Silver has provided us with a shallow retracement thus far, potentially signaling how strong this pattern is at this time. My expectation would be for silver to maintain support over the 32.90 level in the futures, and would not want to see it below the 31.85 level - .500 retracement .

Also, some of you may have already noticed that the CME has reduced margin requirements on metals, and most analysts are pointing to the low volatility in the market as the reason.

"Many are still standing on the side

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of the voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. -- Ludwig von Mises

Can we really print ourselves to prosperity? Is this time different? Have we really discovered the secret unlimited potion that makes economies grow? No, no and no.

Over the past 40 years, we have printed money and expanded the credit system to grow our economy. During this period, as we papered over cracks that appeared in the system, we continued to grow the economy in nominal terms. By not resolving underlying issues, economic cracks grew into gaping holes requiring increasing amounts of credit and monetary expansion to maintain a semblance of prosperity.

Crisis after crisis,