Friday, August 31st, 2007
China’s Gold Output Jumps More Than 15%, Makes it a Target for Investment Profits
From Staff Reports
China’s gold output jumped 15.44% in the first seven months of the year, the biggest growth in the past 10 years, China’s state-run Xinhua news agency reported yesterday (Thursday). Total gold production reached 145 tons so far this year, the news agency said.
China’s gold industry produced 240 tons of gold and raked in a profit of roughly $763 million last year, according to a report made on Tuesday at a gold-industry forum held in Zhaoyuan, a center of gold production in Eastern China’s Shandong Province. China has seen gold production accelerate, with the number of producers with an output of more than one ton a year growing from about 25 in 2001 to roughly 40 today, the report said. Besides Zhaoyuan, the Xinhua news agency said that Lingbao in Henan Province, Qianxinan in Guizhou Province and Tongguan in Shaanxi Province turned out about 40 tons of gold from January to July this year.
With China’s growth, there’s an immense amount of money to be made either investing overseas, or by investing to profit from the growth trends being driven by development abroad. That’s where gold comes in. Gold is a precious metal, and it’s also a commodity. As newly minted consumers in China, India and Latin America become wealthy, they’ll increasingly want the same goods that households in America are buying: Jewelry, gold, gems, collector cars, baseball cards – these will all benefit from the ability to spend on wares that aren’t just necessities. That’s the core investment thesis here at Money Morning.
Right now, gold is trading in the area of $675 an ounce. But many analysts believe it could go higher – much higher, in fact. Indeed, by some estimates, gold could reach its all-time peak in the record range of $1,500 to $2,000 an ounce. In other words, it could triple from here. [Check out our news archives for the investment research essay: The Baywatch Effect: Can China’s Growth Help Gold Prices Triple? Like the rest of our news and investment research, it’s free of charge].
A good China mutual fund, or an ETF, will give you the long-term benefit of continued growth, enable you to ride out that economy’s inevitable ebbs and flows, and will provide some diversification, too. One fund that Aden Research recommends is the China Region Opportunity Fund (USCOX), which is managed by U.S. Global Investors (GROW). We have singled out U.S Global because it’s a company that several of our Money Morning analysts know quite well. Indeed, Investment Director Horacio Marquez says that its funds are well managed, and so is the company itself.
While these next opportunities are not in the gold or precious metals category, our team of global analysts has identified several profit opportunities that are related to the growth in China, specifically, as well as Asia in general, to the commodities boom, and to the financial capital that’s needed to finance the industrial development taking place on that side of the world.
In fact, our worldwide research team has identified $867 billion worth of industrial investments that will be flowing through the global financial markets, aimed at development initiatives in such key sectors as agriculture/biotechnology, telecommunications, energy and finance. This confluence of capital, which our researchers have labeled “The Big Money Bang,” will create countless investment opportunities. But we’ve singled out the best four, many of them keyed to some of the trends discussed above. They include:
- A financial institution so tied into Asia’s booming development that we’ve nicknamed it “The One Stock You Can Retire On.”
- A commodities-related company with ties to both agriculture and biotechnology whose product is provided by so few firms that it’s actually “more precious than oil.”
- A power-provider involved in a $40 billion energy venture that’s central to China’s continued ability to grow.
- And a telecommunications company whose technology has the potential to revolutionize both Internet Video and VoIP telephony. Unlike other tech wannabes, however, this company also has the managerial talent to pull it off.
To get a free copy of our report – The Coming “Big Money Bang’’—and to find out how you can get information on these four industry leaders, click here.
Related News and Story Links:
- Money Morning Investment Research Report: The Baywatch Effect: Can China’s Growth Help Gold Prices Triple?
- International Herald Tribune Business News: Gold, Silver Climb as Energy Prices Rise, U.S. Dollar Recedes.
- Money Morning Investment Analysis: The China Connection: Why Dubai is Really Interested in MGM.
- Money Morning Investment Research Report: ABN AMRO Deal Points to Next Ways to Profit From China.
- Xinhua News Report: China’s Gold Output Grows 15.44%.
Money Morning Investment Analysis: Can China’s Growth Help Gold Prices Triple?