Before we get started today, let's quickly talk about one of Mike Schaefer's stock picks he recommended to Wealth Daily readers.
Last month, Mike told readers to buy Connacher Oil and Gas (TSX:CLL). At that time the stock was trading at $3.83. Today the stock hit an all time high of $4.37. Take a look.
But $4.37 is still a bargain price for Connacher. The company has over 300 million barrels of in place bitumen. And as oil prices continue to increase, so will Connacher's per share price.
This is one of those stocks that build family fortunes... a stock you own for a full decade or more. That is, unless it gets acquired first. Which is always a possibility.
Stay tuned...
Gold Touches Fresh Quarter Century High
Gold rose to a new 25-year high in Europe today while the American markets were closed in remembrance of Martin Luther King, Jr.
Front month gold rose to as much as $558.80/oz. before closing at $557/oz. overnight. Take a look:
Investors and fund managers are buying all the precious metals because of high energy prices, global security worries, and the U.S. dollar's weak outlook.
But this is not the week's plateau for gold. The yellow metal will test new highs this week as tensions over Iran's nuclear program will entice investors to look to the metal as a safe harbor.
Iran: A Catalyst for Increasing Gold Prices
So far Iran has refused to halt its nuclear program. This has prompted the United States, Germany, France and Britain to refer the matter to the Security Council, where Iran may face sanctions.
Last week the Dow fell heavily and gold prices increased as tensions over Iran mounted.
Recent gold prices have been increasing as an inflation hedge because of Iran. Traders are currently positioning themselves for news on sanctions.
Gold has climbed 24% in the past four months due to inflation concerns and lower returns from stocks and bonds.
So far in 2006, gold has added 9% to its price while investment banks and trade houses sharply raised their price forecasts.
Geopolitical tensions have traditionally spurred demand for gold as investors seek a haven from instability in financial markets.
Gold jumped 4.4% on September 14, 2001, when trading resumed following the September 11 attacks in New York and Washington D.C. It also rose 4.3% in the week after the March 11, 2004 bomb attacks in Madrid.
The Iranian situation should be no different. I expect gold to edge even higher over the coming week.
Buying Gold the eBay Way
I'll admit it. I'm becoming a gold bug. And that's saying something because I'm only 26 years old.
But my trip last week to meet Mike Schaefer in person confirmed that at heart, I'm a commodities junkie. I love that stuff.
The allure of the yellow stuff is just way too attractive for me to resist. Especially after talking to Mike Schaefer, who's long-term price prediction for gold brought gasps, and shock and awe at the table.
That led to me to search the internet, looking for a good place to buy bullion. But it seems that everyone just wants to rip you off.
Take Kitco.com for example. Kitco charges an extra $12 per ounce on top of the current gold prices plus $32.30 in shipping and insurance fees. So if gold is trading for $577 per ounce, you end up paying $621.30 per ounce.
Kitco?!? More like Rip-co!!!
So in my search for a good way to buy physical gold, I stumbled across a rather untraditional way to buy gold: On eBay.
I use eBay a lot. Maybe even a little too much. But long time readers of Wealth Daily know that I'm a cheap SOB and can't pass up a good deal. And eBay is the place to go if you're looking for a good deal.
Now I'm sure that many of you reading this either have bought or sold something on eBay at one point. But if you're unfamiliar with the online auction forum, I must warn you, buying anything on eBay, especially bullion, carries a risk.
In fact I recently got burned for $60 worth of CDs. After I won the auction and received my CDs, I found out that they were not original CD pressings but rather burned CD-Rs of the original discs. So if you're considering buying anything on eBay, be careful.
But, if you carefully read the item descriptions and ask the seller questions most of the time you'll come out on top.
Now here's what you have to be careful of when buying gold.
EBayers sell the yellow metal in two forms - minted gold bars and raw gold nuggets.
The safest way to go is obviously minted gold bars. But the gold nuggets are cheaper.
The first thing you need to be careful of is fool's gold. To be sure that you are buying real gold, just check the seller's feedback.
Also, when buying nuggets you need to be weary of the purity of the gold. A gold nugget never comes 99.999% pure like a minted gold bar would. Most times the purity level will be around 70 - 80%.
Many buyers don't seem to check the purity before bidding and end up paying way too much for nuggets.
At last look, sellers on eBay had about 4000 gold bullion items up for auction.
You can find bullion for sale on eBay under the coins category. Good luck bidding.
- Luke Burgess
