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Russia’s maneuvering boosts the commodities market

Today's Financial News - Posted September 3, 2009

iStock_000002814751XSmallThe commodity markets are surging today. Are the bulls charging because of investor fear or is something else going on? Here’s the answer.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): There is a buzz in the commodities markets this week. Just about anything that can be pulled from the ground is surging in value. Everything, that is, but natural gas.

Most notably, gold is just about ready to reach over the critical $1,000 level, proving that investors are looking for safety. Even without a hint of inflation, the precious metal has surged by over 5% so far this week.

The quick run means the world’s gold miners are surging in value. The more leverage packed into their balance sheets, the higher their prices are going to go.

So far, Yumana Gold (NYSE:AUY) is up by nearly 20% this week, while AngloGold Ashanti (NYSE:AU) is up by over 15%.

It is a similar situation for the silver industry. As investors search for tangible value, the silver industry is taking its investors on a wild ride.

One of the more popular ways of playing the trend, the iShares Silver Trust ETF (NYSE:SLV) was up by as much as 5%, taking the week’s gains into double-digit territory.

TFN Strategic Trader subscribers love the action. Our call options are worth 66% more this afternoon than they were this morning.

The juicy story

Now, I realize you come to TFN sight looking for more than the usual take on the day’s news. Fortunately, our friends over in Russia are creating more than enough action to feed our appetite for story material.

As if the government-centric action unfolding around the Chinese commodity market was not enough to prove my prediction and profit potential of the “Commodities Carry Trade,” the Russian government is stepping into the ring to create some action on its own.

Unable to secure a firm economic future through normal economic means, Putin is “calling” for the country’s banks to start buying Mechel’s (NYSE:MTL) debt. There are also rumors of strong tax breaks heading towards the large Russian miner.

Not only is this yet another wrinkle in my Commodity Carry Trade theory, it helps prove that the effort truly is becoming a global phenomenon.

With their economies weak and the world’s banking industry even weaker, governments are quickly turning to the commodities market for their financial security.

Why invest in paper backed by a desperate government when you can invest in a commodity the world will need no matter what happens in the coming years?

No questioning the profit potential

While there are lots of facets affecting this trade, one thing that is certain is it will be extremely bullish for the commodities market.

We are seeing a mere glimpse of things to come.

Once demand surpassed production… stand back. Prices will soar.

I have a fantastic way to take advantage of this situation, but I absolutely cannot give it away to a wide audience.

Its value was up by nearly 50% today with a trading volume of just 287 trades. Imagine what would happen if thousands of eager investors suddenly jumped in.

If you want me to email you with the trade to make, just click here.

Finally, just to prove there is an exception to every rule, natural gas prices are hitting yet another new low today, dropping the to a paltry $2.50 per million BTUs.

Could it be that foreign investors want nothing to do with an American-based economy? Or is the bearish action a result of the growing inventory glut across the globe?

Now that some of the world’s most powerful governments are getting in on the action, the commodity trade is not going anywhere anytime soon.

This is exciting stuff that is going to drastically change the commodities industry. The situation has profit opportunity written all over it.

I say we take advantage of it.


Next Article: TFN eNews 09/03/2009: Gold and silver soar… plus, gainers #53, #54, #55 of the year!

Posted by Andrew Snyder · Filed Under Featuring..., International Investing 

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