Silver, Gold Await Printing Presses

While there is no doubt the Federal Reserve and other central banks around the world will continue to ramp up the money printing presses, we remain somewhat in a holding pattern, at least in the United States, after Ben Bernanke announced the Fed will buy $40 billion in mortgage-backed securities on a monthly basis indefinitely, with indefinitely measured by the health of the job market, with hints the Fed and Bernanke want to see it at about 5.5 percent.

Even though some business and economic writers and investors have attempted to paint gold and silver has having reached a plateau at this time, with the probability they will fall in price, there is not doubt nothing will stop central banks from feeding the out of control spending habits of governments around the world, and the price of gold and silver will continue to rise over the next 10 years, with gold and silver miners, which currently, for the most part, are enjoying low valuations, will bring investors solid returns, especially for silver investors, where the gold-silver ratio continues to be far higher than historical levels, standing far beyond the usual 16 times ounces of silver it takes to buy an ounce of gold, to weigh in at a hefty 54 times the usual amount it takes to buy an ounce of gold with silver.

That alone will dramatically push up the price of silver, as its historical ratio to gold should have it stand at over $100 an ounce as of this writing.

So in the short term, in spite of the announcements by the Federal Reserve and the ECB to stimulate the respective economies of the United States and the euro zone, they still haven't launched their buying programs, which has temporarily kept the price of silver and gold in holding patterns.

It's apparent in the case of Bernanke that he's waiting to implement QE3 when it is seen as not an attempt to influence the upcoming presidential election. With that soon to end, it won't be much long afterwards when it'll begin, and then silver and gold will jump, and it could even before that as investors begin to price in the effect of the stimulus on precious metals, and the resultant fall in value of the U.S. dollar.

For the European Union, what is causing the holdup there is the temporary decision by Spain to attempt to make it appear they have a chance of not needing the money to bailout its economy. That's a fallacy, and largely based upon the need to make it look like they're fighting to keep their people from having to face forced austerity in order to secure the loans.

But like Germany, it will cave on the borrowing end, just like the German leaders do on the lending end. Spain will accept the loans, and when they do, that will also cause silver and gold to rise in price.

One uncertainty in regard to currencies is the major competitors are all debasing their currencies through stimulus programs of one type or another, so it's unclear whether there will be much in the way of the impact of the fall in the U.S. dollar on gold and silver. In that regard inflation and safety will be the impetus behind the rise in the two precious metals; much more so probably than the weakening of the U.S. dollar. Again, it depends on how the market reacts to and views the impact of QE3 in the U.S., and if it deems it as more dramatically weakening the U.S. dollar against major competing currencies, we could see it push up the price of silver and gold even quicker and further than most think.

Another short-term consideration is the selling off of assets by those making decisions based upon tax strategies. That could push down silver and gold some as investors sell off at foolishly low prices. But there is no doubt the duo will continue to rise, even in the short term, as you simply can't bet against the practices of the Federal Reserve and other central banks, which have placed a floor under the precious metals, and which will soar up from there for years to come.

It's a matter of how to invest in silver and gold, not whether you should.

Finally, it is believed that QE3 could even expand beyond the $40 billion spent monthly as Operation Twist comes to an end. The thought is Bernanke will probably start to buy treasuries again in an attempt to jump start the economy, even though that has repeatedly failed to achieve results.

Gold and silver miners, because of ridiculously low valuations will soar in price as an asset class, with some doing far better than others of course. But the rising price of silver and gold, and the relatively new focus on dividends will be a powerful attractant to investors, who will be able to cash in on both fronts if they invest in the right companies.

Another element to watch is mergers and acquisitions among miners, which will make a lot of money for those that can anticipate where those moves are likely to be.

Of course in the end, gold and silver are first a place of safety and hedge against inflation, so that is the number one priority for those putting money in the precious metals. But with little in the way of growth in equities, they will increasingly be looked at by general investors as places they can also make money over time. That will also push up the price of miners, which will benefit everyone holding positions in them.

The silly talk of a gold or silver bubble is off the table at this time, as the everyday investor has yet to really enter the market in a significant way, and until that happens en masse, there is little we need to be concerned about concerning a bubble.

We will need to watch it closely, but we have yet to see the outrageous bidding up of gold and silver prices, and even when that does happen, which shouldn't be for a while, it can sometimes take several years before the prices stop climbing.

For now, investors way for the printing presses to start up, and when they do, there is nothing in the way to keep the price of gold and silver from jumping in the short- and long-term.

Freeport (NYSE:FCX), Alcoa (NYSE:AA), BHP (NYSE:BHP) Follow Commodity Prices Up

Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), Alcoa Inc. (NYSE:AA), BHP Billiton (NYSE:BHP) are all trading higher today as the U.S. dollar plunged in value in anticipation of the decision by the Federal Reserve to inflate again, or in other words, implement more quantitative easing through buying more government debt.

Commodities were up and the miners mentioned above, as well as others followed.

Gold prices, while up moderately today, are taking a breather before the resumption of their upward climb, as the implementations of more printing of money will drive gold prices up on inflation concerns, as well as a plethora of other reasons.

Many gold miners are strongly positioned to take advantage of this, as well as other commodity-based corporations, which will be positively impacted by the increased prices of commodities.

Something to look for in any of the commodity companies will be those with strong cost-control measures in place, as their margins and earnings should soar during this time of inflating from the Federal Reserve, which most believe will be conducted incrementally over a period of time, keeping the price of commodities up for the duration, and probably longer, as demand is still a factor, even with the additional help of higher prices.

For BHP, shareholders and investors are awaiting the decision tomorrow by Canada on whether or not to allow the deal to go forward, which if is allowed, could dramatically push the share price of BHP up when also including the announced actions of the Federal Reserve.

NovaGold (AMEX:NG) Expanding Financing Search

After having a cash infusion of $175 million from combined investments from Paulson & Co. Inc. and Quantum Partners Ltd., it put NovaGold (AMEX:NG) (TSE:NG) in the enviable position of having a two-year cushion to work with.

But aren't resting on that by any means, as estimates for their part in the development of Galore Creek copper-silver-gold mine, which they're partnering with Teck Resources (NYSE:TCK), and on Donlin Creek, which they're partnering with Barrick Gold Corp. (NYSE:ABX), comes in at about $4 billion.

When you consider the estimated revenue for NovaGold is $2 million this year, it's incredible to look at the numbers being thrown at them.

This isn't of about where they are, but where they're going to be, and once the feasibility studies are completed, we'll have a better look. But the large amount of resources at just these two mines are staggering, and will generate a flow of revenue for years.

For example, at Galore Creek, there is an indicated resource of close to 9 billion pounds of copper and 7.3 million ounces of gold. By the time these mines begin operating, assuming they do, it will be at a time when demand will continue to be high; for sure for copper, with gold being less certain depending on when production begins.

At earliest production at Galore isn't expected to launch until 2016, and most of the time they won't meet those dates, so it could be assumed to be even later than that.

NovaGold also has significant projects in Argentina, with their San Roque project, and in Alaska with the Ambler project, which may contain one of the largest copper-zinc deposits in the world.

They have a bright future, but it will be an expensive one to develop, and that's why NovaGold Chief Executive Officer Rick Van Nieuwenhuyse has been reaching out to Asia to woo investors in the company.

In exchange for investment, NovaGold is offering a piece of the metal production, which is a huge attractant to the Asian region who will be building out infrastructure for years.

Even in this recession, metal will be in demand, and is expected to surge again whenever a real recovery begins. Now it's a race to get the needed financing to supply the hungry markets.

With the demand out there, a significant number of interested parties should emerge, and NovaGold does have some time to find the best partners.

Kinross (NYSE:KGC) Completes Sale of Harry Winston (NYSE:HWD) Stake

Kinross (NYSE:KGC) its Diavik diamond mine joint-venture stake back to Harry Winston (NYSE:HWD) for $220 million, returning Winston's stake in the venture to 40 percent.

To shore up its balance sheet at the height of the recession, Harry Winston sold the 9 percent indirect interest to Kinross.

Diavik is the largest diamond mine in Canada, producing over 50 million carats of rough diamonds since beginning operations seven years ago.

The diamond miner paid $50 million in cash, 7.1 million in common shares, and a note in the amount of $70 million.

At around 3:00 PM EDT, Kinross was at $16.01, gaining $0.38, or 2.43 percent. Harry Winston rose to $10.28, gaining $0.49, or 5.01 percent, both in New York.

Bank of America (NYSE:BAC) Initiates Coverage on New Gold (AMEX:NGD)

New Gold (AMEX:NGD) has impressed Bank of America (NYSE:BAC) enough for them to initiate coverage on the gold miner.

Reasons cited for the new coverage is the lowering of operation costs associated with mining, and the increase in production at the projects of the company.

Bank of America started New Gold off with a "Buy" rating, and placed a price target of C$7.65 on them.

New Gold closed in Toronto at $5.93, dropping $0.05, a loss of 0.84 percent.

In New York they were up slightly, closing at $5.76, a gain of $0.04, or 0.70 percent.

Shares traded hands at less than half normal volume.

New Gold has a market cap of about $2.26 billion.

Eton Park Buys SPDR Gold Shares (NYSEArca:GLD), Gold Fields (NYSE:GFI) in Last Quarter

Eton Park Capital Management LP, the $13 billion hedge fund run by Eric Mindich, moved a significant amount of capital into the gold market last quarter, acquiring shares of SPDR Gold Shares (NYSEArca:GLD) and Gold Fields Ltd. (NYSE:GFI).

Mindich acquired 6.58 million shares of SPDR and 780,000 shares of Gold Fields in the quarter via Eton Park.

SPDR Gold Shares has been one of the favorites of hedge funds in the past, and continues to be. Other major hedge fund holders of SPDR include John Paulson and George Soros, although both held their positions and didn't add any shares last quarter.

They did add gold miners, including Gold Fields by Paulson and Soros as well.

Major gold miners were targeted by major hedge funds in general, with Barrick Gold (NYSE:ABX), Newmont Mining (NYSE:NEM) and Goldcorp (NYSE:GG) among the largest increase in holding for funds, accounting for the sixth, seventh and eight places in the order listed above.

SPDR Gold Shares landed in second place as far as the greatest increase in investments from hedge funds in the latest quarter, with all of them together holding 68.2 million shares in SPDR.

With data showing a continuing weak global and American economy, we should see an even larger increase for the current quarter of hedge fund holdings in gold.

Remains of Barrick Gold's (NYSE:ABX) Missing Miners Found

Rescue workers have reportedly found the remains of two miners who had been missing since an accident caused to be evacuated from the property run by Barrick Gold (NYSE:ABX) subsidiary Barrick Goldstrike Mines.

The two workers, who have yet to be officially identified, were in a cage being lowered into the mine when a pipe on the wall broke off and hit the cage.

While it'll take anywhere from three weeks to two months to officially identify the remains, Elko County Sheriff Dale Lotspeich, said, "From an official standpoint, I can't confirm it's the remains of the two missing miners. But realistically, yes, it is. The remains were found in the area where the accident occurred and so we're probably looking at that."

As far as the accident itself, we can't think of the usual idea of a pipe when wondering how that could have done so much damage. The pipe being talked about ripping from the wall is two feet in diameter and used to transport crushed rock and stone.

The Meikle mine is located in Nevada, about 275 miles northeast of Reno.