The region has long carried an emotional attachment to gold. In fact, gold was one of China’s earliest forms of currency way back in 1091 B.C. With rising average incomes and wealth levels leading a new of age of prosperity in China, citizens are snatching up gold at an unbelievable rate. According to the Beijing Municipal Commission of Commerce, sales of precious metals jumped nearly 50 percent from the same time last year during China’s week-long New Year’s holiday in January.

This type of momentum is a catalyst for gold prices to remain strong in 2012.

This is one aspect of the American Dream Trade I discuss in my letter for the Report. There’s also an informative Q&A with China analyst Xian Liang who talks about the dramatic transformation his hometown of Shanghai has undergone over the past 20 years.

Check out the Shareholder Report page to view the full contents of the report. If you would like to request your own copy, send your name and address to editor@usfunds.com.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Written by Frank Holmes

The Growing Appeal of Gold is an article from:

We are in the midst of a powerful rebound in our select uranium miners such as Uranerz (URZ).  The charts indicate an explosive 220% rebound since October lows.  For months we sent out reports that Uranerz will outperform as they are well funded and have already initiated construction on their Nichols Ranch In Situ Uranium Project, which should be producing uranium by the end of the year.  They also have agreements with Cameco and Exelon, two major nuclear players.  In fact Uranerz is leading the sector over the past three months regaining its 200 day moving average and rallying over 225% from October lows.

See the map of their enviable land position between Uranium One and Cameco by clicking here.

I wrote to my readers back in October, “In relative performance to the S&P Uranium stocks returned to 2009 levels, extremely oversold and demonstrating negative divergences for several months.  Keep your hands on the nuclear plow.  If one has not invested in this sector, this is a chance to buy wholesale.  The coming months will give geometric gains as safe, modern, clean and affordable nuclear reactors come online.  Stay steadfast to reap the coming rewards.”

Check out the recent interview with Dennis Higgs, Executive Chairman of Uranerz, discussing the uranium market and updating us on current developments in the Powder River Basin in Wyoming.  For Dennis Higgs bio as well as the other experienced managers and directors click here…

Gold Stock Trades will not regale you with the growing presence of nuclear facilities throughout the world despite the German and Japanese negative stance.  It is well known that reactors are going to come online in increasing numbers and that uranium will be in rising demand.  In fact, several reactors are being built right here in the United States as well as all over the world.

The U.S. Nuclear Regulatory Commission is scheduled to approve Southern Co.’s application for the first construction permit to build modern nuclear reactors in more than 30 years.  Southern is planning to build two new generational reactors and the NRC is considering a license to build additional newly designed reactors in South Carolina.     Nuclear power accounts for 20% of all electricity being produced in the United States and is expanding with the construction of new safer, efficient and cleaner nuclear reactors.  This is being done all over the world.

The once in a millennium earthquake and tsunami in Japan has triggered a knee jerk panic driven reaction from politicians especially in Germany and Japan.  However, the U.S. Nuclear Regulatory Committee released a study nearly a year after Fukushima stating “Public health consequences from severe accidents are very small…successful implementation of existing mitigation measures can prevent reactor core damage or delay or reduce offsite releases of radioactive material.”  The study, called the State-of-the-Art Reactor Consequence Analyses (SOARCA), looked at worst case scenario situations and its impact on health.  This means the U.S. is going full speed ahead on nuclear while Germany and Japan continue with skyrocketing electricity costs.

It is to be noted that four of the giant Japanese nuclear builders are aiming their sights to countries all over the world especially the emerging nations, which are constantly seeking inexpensive and clean electrical energy.  They are responding to this global need by sending teams of experts to sell the building of a new generation of reactors.

Japan wants to sell nuclear reactors abroad to boost their exports.  The companies that are participating are Hitachi and Mitsubishi Heavy Industries among others.  The Japanese claim that emerging nations can learn from the Japanese Nuclear Experience.    The Giants do have a vocal opposition at home who are criticizing this outreach by calling it hypocrisy and the setting up of double standards.

Japan is impaled on the horns of a nuclear quandary, weighing their thirst for exports against their own domestic naysayers.  Money talks.  The Japanese Nuclear Industry posted an annual profit of over $3 billion dollars which made a welcome addition to their balance of exports.

They have gone so far as to offer interested emerging nations not only the building know how, but they are offering them loans to assist them in this pursuit.  It’s almost an offer that these young nations will find hard to resist in their search for efficient and affordable, clean electricity.

Moreover, there are reports that Germany and Switzerland are fast coming to the awareness that the costs of locking up their nuclear plants will cost large amounts of capital.  Siemens published a report that it would cost Germany more than $2 trillion dollars to wean off nuclear by 2030 causing major deficits.  Imagine they are placing their trust in foreign providers.  It is going from wholesale to retail at great costs to their economies.  Capital will flow to countries that make sane, rational decisions with regard to nuclear.

Recently, Russia and the United States have taken a page from this Japanese imperative.  Formerly at loggerheads during The Cold War, they are now uniting cordially to ensure that nuclear fuel is available for the growing number of new generation of nuclear reactors.

We have remained steadfast in highlighting the importance on our select list of uranium miners right here in the United States.  This means jobs and new ancillary industries rising to accommodate the increasing uranium output.  We are speaking about new cranes, highways and even cities.  We are talking about a U.S. nuclear revival.

How does all this relate to our subscribers?  It is evident that nuclear power in not only here to stay but will proliferate as world demand keeps on growing.  Our select uranium stocks have been rebounded considerably after being left for dead only weeks ago.  Our subscribers are having their patience rewarded.

The German and the Japanese liberals will reconsider their knee jerk political reaction as their policies weaken their once proud credit rating and economic standing.

Disclosure: Long URZ and Featured on http://goldstocktrades.com

Nuclear Revival Spur Uranium Miners Higher, Uranerz (URZ) Leading Sector Higher is an article from:

Take a look at the small-cap Russell 2000 Index which was decimated in July, days before the 50-day moving average fell below the 200-day moving average. I discussed how traders buy or sell off of these short-term and long-term moving averages when I wrote about the “golden cross” a few weeks ago.

This year is off to such a great start that if small caps continue this momentum, we should see the 50-day moving average for the Russell 2000 cross above the 200-day soon. This would likely drive new investor interest in this space.

Copper also took a few major blows last year, first in July and then in September as a result of the carry trade. To gain a yield advantage, large investors use the carry trade to advantageously borrow in yen (because interest rates are low), convert it to a stronger currency and invest in higher-return, higher-risk assets, specifically commodities and dividend-paying emerging markets stocks.

When the yen began to strengthen against the dollar in August and again in October, Japan intervened to weaken its currency. The yen quickly reversed, causing the higher-return assets to decline.

As our commodities table shows, copper was among the worst-performing commodities that we track, declining more than 20 percent last year. This lagging performance came despite supply/demand fundamentals that argued for higher prices.

We expected copper to eventually revert to its long-term mean and it only took a few positive drivers to drive prices higher. One of these drivers was the JP Morgan Global Manufacturing Purchasing Managers’ Index crossing above the three-month moving average, which occurred at the end of December. Ninety percent of the time, when this has happened, copper was positive over the next three months, with a median return of 10 percent over the following three months.

Additional drivers that have provided the impetus for higher prices include a significant increase in money supply, interest rate cuts around the world, and central banks dropping their reserve rate for banks.

Look for this trend to continue.

Also Read:

• Anticipating the Golden Cross
• Junior Resources Companies Set to Outperform?
• Have Winds Shifted to Provide Relief to Investors?
• The Periodic Table of Commodity Returns

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

The Russell 2000 Index® is a U.S. equity index measuring the performance of the 2,000 smallest companies in the Russell 3000®, a widely recognized small-cap index. The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

Written by Frank Holmes

From Dogs to Darlings is an article from:

It summarizes the significant milestones reached over the last decade or so, reminding us how far China has come. One significant milestone marking the road of economic growth began when China became the largest consumer of steel, then shortly after, copper and energy, as the government focused on its massive buildout of infrastructure projects to support expected urbanization growth and rising incomes.

By 2001, China was buying more mobile phones than the U.S. as Chinese consumers spent rising discretionary income on the latest technology. Spending in mobile computing has also continued, as China also has the largest number of Internet users, the biggest personal-computer market and the largest smartphone market.

Looking into the next decade, The Economist also plots an estimation of when China’s GDP will be larger than that of the U.S. Using the assumptions of an average real GDP growth of 7.75 percent in China and 2.5 percent in America, inflation averaging 4 percent and 1.5 percent in China and the U.S., respectively, and yuan appreciation of 3 percent per year, China stands to be the largest economy by 2018.

However, if China grows faster with all the other factors remaining the same, the country’s GDP could be larger than the U.S.’s GDP by 2017. The magazine lets you change these assumptions for yourself so you can see when China will be the world’s largest economy. Go there now.

By clicking the link above, you will be directed to a third-party website. U.S. Global Investors does not endorse all information supplied by this website and is not responsible for its content.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Written by Frank Holmes

What Milestone Will China Achieve Next? is an article from:

The month of January is a harbinger for what may happen in the year 2012.  This month we have seen both uranium stocks and rare earth stocks outperform the general market despite negative news.  This means the naysayers are having less of an impact as shorts are rapidly covering.

About a year ago we did a series of articles called the “Chinamese Twins”.  This related to a private candlelight dinner held in the White House between the industrial-military leaders of both nations.  (See archives)  The purported arrangements allowed for a strong yuan and a cheap dollar benefitting the interests of both parties at that time.

Fast forward to today, our kaleidoscope reveals a changing situation.  The world economy is affecting previously reached agreements.  The Chinese and the Americans have altered the requirements in the present economic picture.  The Chinese have tried to maintain a strong yuan while the Americans adhered to a cheap dollar.

This brings into focus the specter of the escalation of trade wars with China.  In the 1930’s, it was the Smoot-Hawley Act that exacerbated the Great Depression.  One must believe that the Chinese and the Americans will try to avoid this outcome.

We can only hope that both sides can reach a modus vivendi to avoid a return of the Smoot-Hawley protectionist nightmare which plunged the world into the Great Depression.  Associated with this burgeoning trade war  is the Chinese manipulation of the rare earth quota system of which they are in command.  We recently heard the ruling from the World Trade Organization against China’s export restrictions of critical raw materials.  This may only exacerbate the underlying issue.

Such a trade war goes far beyond economic aspects, but reaches into the very sinews of American national security and defense.  Our phlegmatic Congress should’ve acted long ago to green light and fast-track the development of a domestic source of these critical heavy elements.  Hopefully, they will awaken from their long torpor and rise to the challenges of the times.  Certainly, Alaska has awakened and included Ucore in its 2013 state budget.  Click here to read the press release.  

Another company which is witnessing support from European consumers is Tasman Metals (TAS or TSM.V) who controls Europe’s only 43-101 compliant heavy rare earth asset.  These companies are progressing rapidly to produce a preliminary economic assessment in the near future.  Listen to my interview with Mark Saxon, CEO of Tasman.

The kaleidoscope is a fascinating child’s toy consisting of constantly changing designs when held up to the eye.  Today’s market can best be characterized by the potpourri of unpredictable sequences of objects, which fascinates the eye of the observer by constantly changing patterns.  The combinations and permutations of the designs are infinite and subject to unpredictable eventualities.  The marketplace is very much akin to this device with its infinite unpredictability.

Gold Stock Trades views the current marketplace always trying to make some sense out of the melange.  In early October, we called for an unexpectedly vigorous rally which is still in progress.  While there is a pervasive air of pessimism in the marketplace, nevertheless the rally continues.

We feel that this move, particularly in our natural resource sectors, is apt to be a surprise to the naysayers.  In our field of view we observed the record short position in many resource stocks which may be undergoing short covering thereby accelerating the upward moves in a number of our rare earth and uranium mining selections.  Be assured that we are constantly monitoring this situation.  Our projection is based on technical interpretations that indicate a continuation for the S&P500 (SPY) to challenge 52 week highs.  This short term target in the general markets represent a significant milestone in this move.  Should it breakthrough this level, it will have formed a breakout, indicating a continued advance.  One caveat is that sufficient volume must accompany this upward move.

As always we will be monitoring technical developments to determine whether early October’s reversal was the inception of a significant upward move into new highs.  We reiterate that the daily marketplace will do its devious best to confuse and obfuscate the speculator.  The price of lucrative profits is eternal vigilance as we progress along the upwardly rising road of the long term super cycle in precious metals and our natural resource sectors such as rare earths and uranium.

Disclosure: Long TAS and UURAF

Uranium and Rare Earths Leading Market Rebound is an article from: