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Bling!

Written by Luke Burgess
Posted June 21, 2005

Dear Wealth Daily reader:

Good news in the metal world.

Yesterday gold hit a new three-month high of $441.30/oz. as the euro continues to struggle against the dollar.

Many feel the recent volatility in the currency market is a direct result of political anxiety in western nations.

Over the past few weeks the dollar gold price and the euro have been tracking each other. But on June 10 the two appeared to decouple.

After voters in the Netherlands and France rejected to the proposed EU constitution, media has reported that funds were moving out of the euro and into gold.

By 11am on Monday, the euro was trading for US$1.2240 while gold was trading at $440.85/oz, the highest since March 16.

But gold briefly touched another record high today at $448, which is a 65 day high. I know there's a lot of skepticism out there, and a lot of money on the sidelines. As we see gold trade into and above the $450 mark, we'll likely see some of that money deployed into the market.

Of course, Mike Schaefer made the $450 gold call some time ago. And his regular readers are loving it. In fact, Mike's picks have been absolutely on fire, across the board.

Yet, as much upside as there is in gold, there may be even more in silver.

Silver bulls will be glad to hear about a new silver Exchange Traded Fund.

Barclays Global Investors has filed the first ever silver ETF.

According to the filing made by Barclay's, each share will be equivalent to 10 ounces of silver.

The ETF will be valued on the price per ounce set by three market-making members of the London Bullion Market Association

The silver ETF is structured similarly to the highly successful gold ETFs. Shares of gold ETFs represent ownership in fractions of ounces of gold bullion held in a vault.

Analysts argue that the anticipation of the first silver ETF may have been the driving force that sent the price of the metal higher last week.

"Gold has been strong the past few weeks, but quite often silver has been leading the charge," said Ross Norman, a director at TheBullionDesk.com in London. "The tail has been wagging the dog, and the rationale is that there is some buying ahead of the silver ETF.

Todd Stein and Steven McIntyre of the Texas Hedge Report wrote, "Silver is such a small, tight, relatively illiquid market that a successful innovation in the way for individuals and mutual funds to own silver, without the hassles of storage costs and steep premiums to spot, could have a pronounced effect on the silver price"

If the SEC approves the request, the ETFs shares will trade on the AMEX under the symbol "SLV."

The new ETF is just another positive for silver, which already has excellent fundamentals.

It's just one more example of the secular bull market in commodities. And another reason why we'll continue to focus on them.

As you know, our resource plays have been fantastic winners for us already. And there's more to come.

- Luke Burgess
Buffett's Envy: 50% Annual Returns, Guaranteed