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There are many reasons why pension fund managers, private investors and even governments are beginning to add bullion to their portfolios. Perhaps the most important reason for this shift is that bullion provides superior insurance in times of financial uncertainty such as we are facing today.
Until governments solve their debt problems and no longer need to debase their currencies through unbridled money creation, a fully diversified portfolio should include gold, silver and platinum both for wealth protection and growth.
Read the rest of article here…
http://www.silver-investor.com/pdf/7-18-11GoldSilverandPlatinum.pdf
Many people have asked if there is any way to place precious metals away for retirement. The answer is obvious—Yes!
However, what has been determined is that many people in the USA have most of their funds in some type of retirement account and do not have the ability to invest outside of their already existing account.
Therefore this is directed primarily at those that wish to know how to establish a precious metals IRA. Individual Retirement Accounts (IRAs) can be funded with physical gold and silver, yet very few investors are aware of this fact. They are exempt from all capital gains taxes while in the IRA exactly like any other investment that is placed into an IRA account. Thus, if your investments perform well over a long period of time, it can result in huge savings. Of course upon distribution the appropriate tax consequences would be applied.
Diversifying your retirement portfolio with precious metals is fundamentally required if you properly understand asset allocation (see the Ibbotson study). Additionally precious metals normally rise during periods of unsettling events such as wars, terrorism, inflation, deflation, downturns in the stock market and the US dollar. Precious metals usually yield large profits in these circumstances.
What is unique about this plan is that you can take physical possession of the actual gold or silver when you make your withdrawals. That’s correct! You can cash out in real honest-to-goodness gold and silver instead of fiat dollars. This is the most important feature of all. Down the road, in this generational bull market in gold and silver, the odds are in your favor that you will want and need the physicals when it’s time to access your investment.
Once you decide that you want to include precious metals in your retirement planning, you need to determine how much you want to invest. How much depends on your annual contribution, your personal goals and your individual investment philosophy. Factors to consider are your age, total assets and risk tolerance.
Very few institutions are set up to handle the precious metals component of retirement plans. There are basically only three, Sterling Trust, Goldstar Trust, and Entrust.
Establishing a Precious Metals IRA
From the Midas Resources website…
“If you currently have an IRA or a qualified plan such as a 401(k), 403(b), etc most likely your plan does not allow you to own physical gold or silver in your account. If that is the case, there is a way to do it that is relatively easy and inexpensive. What follows is a step by step explanation of how to do it. The first step is to find a custodian that will allow such a transaction. There are several including Sterling Trust Company, Goldstar Trust Company and Entrust. There are many others. These three are the most experienced with holding metals. Once you select a custodian, you will need to open a self directed IRA. This involves a minimum amount of paperwork and a fee to set up the account.
Taking possession of your IRA is qualified as a distribution. Under that circumstance, the IRS requires that a possible penalty and the appropriate taxes be paid. To avoid the penalty and taxes you want to have your IRA gold stored with a custodian that handles precious metals self directed IRAs. Midas Resources’ brokers will work with you to select a custodian, and help you through the process of filing the required paperwork to start your self directed IRA.
Once your new account is funded, you can then direct your broker to purchase gold, silver, platinum and palladium for your account. Your broker will withdraw payment for the purchase and send the appropriate amount of metals to the custodian’s storage facility. The storage facility will report the receipt to your custodian and show the metals in your account.â€
As you can tell setting up a precious metals IRA is not that difficult. I have discussed in some of my public appearances particularly at the Money Show throughout the U.S and Canada.
What Type of Gold and Silver Can Be Held In an IRA?
The United States government currently allows Gold American Eagles and Gold proof American Eagles in IRA’s. Gold American Eagles are mass produced bullion coins. The value of these gold bullion coins is tied to the gold price. The price of gold fluctuates moving up and down like a heart monitor. This fluctuation in the price is directly tied to investors that buy and sell in an attempt to take advantage of the price volatility.
 Three Easy Steps…
1. Submit the paperwork.
The metals are stored at approved metals depository, which at times can be the same used by COMEX and other major commodities exchanges. Annual storage fee vary but I would not base my entire decision on the storage costs alone.
Steps #1 and #2 involves completing the proper forms to transfer the funds to custodian. Again there are three choices as outlined above. Normally, the funds are transferred directly from an existing IRA or Qualified Retirement Plan.
In Step #3, the IRA investor directs a dealer which precious metals to buy.
For those wishing to send me an email for more information you can go to www.MyRealIRA.com
Richard (Rick) Mills
As a general rule, the most successful man in life is the man who has the best information
A critical or strategic material is a commodity whose lack of availability during a national emergency would seriously affect the economic, industrial, and defensive capability of a country.
The report “Critical Raw Materials for the EU†listed 14 raw materials which they deemed critical to the European Union (EU): antimony, beryllium, cobalt, fluorspar, gallium, germanium, graphite, indium, magnesium, niobium, platinum group metals, rare earths, tantalum and tungsten.
The French Bureau de Recherches Géologiques et Minières rates high tech metals as critical, or not, based on three criteria:
Demand is increasing for critical metals due to:
Access to raw materials at competitive prices has become essential to the functioning of all industrialized economies. As we move forward developing and developed countries will, with their:
Continue to place extraordinary demands on our ability to access and distribute the planets natural resources.
Threats to access and distribution of these commodities could include:
Accessing a sustainable, and secure, supply of raw materials is going to become the number one priority for all countries. Increasingly we are going to see countries ensuring their own industries have first rights of access to internally produced commodities and they will look for such privileged access from other countries.
Numerous countries are taking steps to safeguard their own supply by:
Many countries classify cobalt as a critical or a strategic metal.
The US is the world’s largest consumer of cobalt and the US also considers cobalt a strategic metal. The US has no domestic production – the United States is 100% dependent on imports for its supply of primary cobalt – currently about 15% of U.S. cobalt consumption is from recycled scrap, resulting in a net import reliance of 85%.
Although cobalt is one of the 30 most abundant elements within the earth’s crust it’s low concentration (.002%) means it’s usually produced as a by-product – cobalt is mainly obtained as a by-product of copper and nickel mining activities.
Today 40% of the cobalt consumed in the world originated as a by-product from copper production in the West African country of the Democratic Republic of Congo (DRC) – cobalt production in most other countries is a by-product of nickel mining.
The copper deposits in the Katanga Province of the Democratic Republic of the Congo are the top producers of cobalt and the political situation in the Congo influences the price of cobalt significantly. The politically unstable Democratic Republic of Congo contains half the world’s cobalt supply and represents the lion’s share of anticipated future cobalt supply – the DRC’s 2007 output was equal to the combined production of cobalt by Canada, Australia and Zambia.
In a nine billion dollar joint venture with the DRC China got the rights to the vast copper and cobalt resources of the North Kivu in exchange for providing $6 billion worth of road construction, two hydroelectric dams, hospitals, schools and railway links to southern Africa, to Katanga and to the Congo Atlantic port at Matadi. The other $3 billion is to be invested by China in development of new mining areas. Approximately half of known global cobalt reserves are in the DRC, and close to 40%-50% of incremental cobalt production, over the next five years, is anticipated to emanate from the DRC.
At 19.7 percent of global supply Zambia is the world’s second largest producer of copper-cobalt. According to a recently released report by the Zambian Central Bank cobalt production rose to 2,236 tons in the first quarter of 2011 from 1,989 tons last year, exports increased to 2,279 from 1,977.
China is extremely short of cobalt concentrates and needs to import cobalt concentrates in large amounts every year. The leading global producers of refined cobalt are China (39%), Finland (15%) and Canada (8%). China is a leading supplier of cobalt imports to the United States.
The cobalt market is small in comparison with other base metals. Consumers purchase cobalt through negotiated agreements, bids, and open markets from producers, traders and to a lesser degree, government stockpiles and private inventories.
Uses
Cobalt is a strategic and critical metal used in many diverse industrial and military applications.
Conclusion
China seemingly has most of the DRC’s production of cobalt locked up, that’s up to 40% of global mined cobalt.
Cobalt is classified as a strategic/critical metal.
With the recent strong support for electric vehicles the use of cobalt in this sector alone has led to a formidable demand for the element and the US cannot continue to depend on its cobalt being supplied mostly from China.
There is no doubt in this author’s mind that cobalt’s profile will continue growing in the coming months and years.
Is cobalt on your radar screen?
If not maybe it should be.
Richard (Rick) Mills
If you’re interested in learning more about the junior resource, bio-tech and technology sectors please come and visit us at www.aheadoftheherd.com
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Richard is host of Aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 300 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell, Uranium Miner, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor, Mining.com, Forbes, FNArena, Uraniumseek, and Financial Sense.
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Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.
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Richard Mills does not own shares of any companies mentioned in this report.
It was analysted that expect platinum and palladium, used in catalytic converters, to rise further, after gaining 14 percent and 28 percent respectively since late December, but also warn of a correction on concerns over the still ailing auto sector.
The platinum group metals (PGM) rise and the dollar’s dip against a basket of currencies lifted gold, but analysts said fresh impetus was needed to push bullion higher as there was little support from currency markets with the euro under pressure.
Spot platinum rose as high as $1,626.00 per ounce, its highest since August 2008, and was at $1,612 an ounce by 2:52 p.m. EST, up about 1 percent on the day.
Spot palladium rose as high as $459 an ounce, its highest since early July 2008, and stood at $457.50 in late trading, up about 1.1 percent from Friday.
“We saw the opening of the U.S. ETFs this month, that’s proved relatively popular so far. We’ve seen a little bit of switching from gold to PGMs overall, so that’s driven the price,” said Commerzbank trader Rory McVeigh.
A U.S. subsidiary of London’s ETF Securities launched the products last Friday, and uptake has been healthy. About 170,000 ounces of metals were added to the products in the first two trading sessions.
But McVeigh said the lack of a solid recovery in the car industry could mean once the investment demand is saturated, both metals could be heading for a sharp correction.
“When it’s investment driven, the exit could be a lot harsher than the rise,” he said, but he did not rule out a rise to $1,800 an ounce for platinum in the short term.
Gold prices were up slightly but rises were limited as the euro remained under pressure due to financial problems in Greece and concerns over the potential impact on the single currency.
Investors have also kept to the sidelines because New York markets were closed on Monday for Martin Luther King Jr. Day.
Spot gold inched up to $1,132.50 per ounce compared with $1,129.90 an ounce late in New York on Friday. U.S. gold futures for February delivery were at $1,134 per ounce, up 0.25 percent.
“Until we get fresh momentum based on an event or data, gold is going to continue to struggle as long as the dollar is being preferred versus the euro,” said Tom Kendall, precious metals strategist at Mitsubishi.
Spot gold hit a five-week high of $1,161.50 on January 11. Gold has fallen 2.5 percent since then, as a rise in the greenback hurt investor sentiment.
The high gold price has hurt Italian jewellers, who are now turning to alternative materials such as leather, textiles and ceramics to offset prices, an industry executive at the Vicenza trade fair said.
Holdings by the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.914 tonnes to 1,112.836 tonnes on Jan 15.
Silver prices were at $18.61 an ounce versus $18.36 an ounce late in New York on Friday.