This article is part of a 20 article special report on "Metals, miners and money".
"Gold is a beneficiary of lower interest rates," says Daniel Frishberg, host of BizRadio and editor of The MoneyMan Gold & Oil Report.
He explains, "Gold has closed at his highest level in three decades. The precious metals market senses inflation is higher and economic growth slower than the official government numbers.
"With the price of oil at a record high and food inflation in a double digit zooming up, government statisticians will have us believe third quarter inflation was only 0.8%, the lowest level in 40 years.
"The gold market is not buying the government numbers. Regardless of what Federal Reserve Chairman Bernanke says about containing inflationary pressures or what Treasury Secretary Paulson says about supporting a strong dollar policy, the U.S. dollar is being sacrificed to save the banking industry and prevent an economic slowdown and/or housing market collapse or even a recession.
"It is also unlikely we have seen the worst of the sub-prime fallout since the bulk of the sub-prime/Alt A loans reset early next year. This is a plus for precious metals as there will be continuing pressure to lower interest rates and let inflation drift higher.
"Mining share prices are already at or near record highs, although we have no way of knowing if they are at a peak for the current up cycle or still have some way to go. Market forces are such that share prices might double from their August lows before running out of buyers. Expect volatility.
"We are adding several positions to our model portfolio including the Market Vectors Gold Miner ETF (AMEX: GDX), as well as positions in individual mining companies such as Agnico-Eagle Mines (NYSE: AEM). We are also adding to our silver position and are purchasing shares of Silver Wheaten (NYSE: SLW) and Silver Standard Resources (NASDAQ: SSRI)."
Each day, Steven Halpern's TheStockAdvisors.com website features the latest investment commentary and favorite stock picks of the nation's leading financial newsletter advisors.
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