By: Peter J. Cooper

Investors are being won over to the case for precious metals on a daily basis, and the case against this asset class is also weakening by the day. Time then to consider how to gear up to achieve maximum returns in this asset class, albeit with higher risk.

With the UK’s second largest bank, Royal Bank of Scotland predicting a stock market and credit crash within the next three months, it is hardly surprising that the bank’s latest fund for expatriates has a heavy weighting for gold. The ongoing geopolitical tensions between Israel and Iran are also reason enough for nervous investors to seek refuge in this traditional safe haven asset.

Royal Bank of Scotland has given gold a 25 per cent weighting in its latest Autopilot capital guaranteed deposit account targeted at UAE expatriate customers. Performance is weighted equally across four sectors: emerging equities, developed equities, property and gold. The new fund will track performance of the four sectors when rising, and divert to cash when a falling trend is identified, so gold could be its sole investment class.

The role of gold in this new account is bound to raise eyebrows and comes as the bank is warning customers to expect turmoil in equity and credit markets over the next three months, an unusal statement for the second largest UK bank. Time indeed for UAE investors to consider a little diversification into precious metals.

This column has recently presented quite a detailed case for investment in gold and silver both on the grounds of the supply and demand imbalance in the market, and because speculative interest is likely to build in an increasingly inflationary global economic environment.

Buying bullion or coins and storing them is one approach. But what if investors want to gear up to achieve maximum leverage against the price movements that seem highly likely in gold and even more so in silver? (more…)

By JONATHAN CHENG

HONG KONG — At $800 an ounce, the golden bathroom sink had to go. At $1,000, say goodbye to the golden horse-drawn chariot. But don’t even think about touching the golden toilet.

Global economic uncertainty over the past few years has pushed gold prices into the stratosphere, and few people have felt that rise as much as Hong Kong entrepreneur Lam Sai-wing has. He has spent the past decade constructing a palace of gold, decked out in six tons of the precious metal. In recent years, the palace has become an attraction mainland Chinese tour groups couldn’t miss, and a boon for Mr. Lam’s retail jewelry business, Hong Kong-listed Hang Fung Gold Technology.

Since gold prices hit four-digit territory earlier this year, Mr. Lam has been taking apart his hall of gold as quickly as he once raced to construct it. He is melting down golden chandeliers, armchairs and armored knights and selling gold by the ton to fuel growth plans that include hundreds of new retail outlets in mainland China. But even with the selloff, one thing is certain: The toilet stays.

“I don’t care if gold hits $10,000 an ounce,” Mr. Lam says. “I’m not melting it down.”

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While the summer months are traditionally slow months for precious metals, Blanchard Chairman and CEO, Donald W. Doyle, Jr., says the current strength gold is exerting only underscores what his investment firm has been predicting since the beginning of the bull market in 2002 – that gold is tremendously undervalued, and he sees new record prices by year’s end – potentially $1,150 or higher.

“Inflation, a weak dollar, the rising price of oil, Middle Eastern geopolitical tensions, and the new influence of emerging markets around the globe are all factors supporting the up tick in the gold price,” Doyle says. “However, the key fundamental driver over the next six months will be renewed investment demand by institutions and individuals who are looking for a safe haven.”

Doyle says the equities markets have not hit bottom, and as investors see negative returns in stocks and steep declines in their 401K holdings, they are seeking out alternative investments where ever they can, particularly as the value of the dollar remains near record lows.

“It’s not that the financials are over-bought” Doyle says, “it’s that investors just aren’t buying. They’re looking for non-traditional financial vehicles, such as gold, to save the money they have. The good news for these investors is that gold has generated very nice positive returns of 43 percent over the last year and 11 percent year to date in 2008, and Blanchard sees this trend continuing long term as the economy continues to grapple with major issues that aren’t going away anytime soon unfortunately.” (more…)

The Justice Department is seeking to permanently keep more than $3 million in coins that were struck by anti-government activists who aimed to create a new currency to compete against the greenback.

In court papers filed in federal court in North Carolina, federal prosecutors say that they need another six months to complete their criminal investigation of the citizens who play a leading role in popularizing the alternative currency, known as the Liberty Dollar.

A prosecutor for the U.S. attorney’s office in Asheville, N.C., Thomas Ascik, also sought an order that would give the government title to the more than 7 tons worth of gold, silver, and copper Liberty Dollar coins that the government seized last year in raids in Indiana and Idaho, according to court papers. Just last week, a dozen Liberty Dollar supporters filed suit in U.S. District Court in Idaho demanding the return of the seized coins.

[Editors Comment] Is it any wonder that so many people have a deep seated distrust of the federal government when they use these types of tactics. If they want to investigate possible criminal activity, that is fine, Knock your socks off! But to seize property and then try to gain title is just an arrogant abuse of power.  

By Nicole Garrison-Sprenger
It could double as a shot put, but it’s worth a little too much to chuck in the dirt.

A 22-pound gold coin commemorating the 2008 Olympic Games in Beijing is waiting in Burnsville for someone to plunk down $1 million for a piece of history. Now, if you’re a big fan of the Olympics, you could fly to Beijing, stay for a week, watch the Games live and buy a T-shirt for considerably less. But a million dollars for a coin that isn’t even old?

It turns out, a solid-gold coin that weighs as much as a 1-year-old child doesn’t come along every day.

The coin released by the China Mint is the biggest Olympic coin made to date, said Douglas Mudd, a curator at the American Numismatic Association money museum. “Twenty-two pounds — that’s a lot of gold,” he said. At present, Mudd said, “The coin market is very hot. We’re seeing record prices at practically every auction.”

Gold is selling for about $928 an ounce, which would make the jumbo coin that Burnsville-based GovMint.com is selling worth roughly $245,000 melted down. (Precious metals are measured in troy pounds, which contain 12 troy ounces.) Plus, the coin — with the Beijing 2008 Games logo on one side and an image of a Chinese temple towering above Olympic athletes on the other — is one of only 29 issued, and the only one released for sale in the United States. Seven inches in diameter, it comes in an ornate carved box of African Blackwood with a 35-pound carved stone dragon perched on top.

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