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It has been almost 160 years since the first California gold rush but, with prices hitting record highs, prospectors are once again flocking to the state’s rivers and deserts in search of the precious metal. Gold’s ascent – prices crossed the $1,000 an ounce barrier this month and remain well above $900 – has sent sales of mining equipment soaring. “There’s been a dramatic change . . . our sales have risen four-fold in the last three months,” said Harrigan McGregor, owner of GoldFeverProspecting.com, an equipment retailer in northern California. “This is the second big California gold rush. We’ve had...

ELKO, Nevada (Reuters) - When Elaine Barkdull Spencer's two sons were growing up, she vowed they would never work in gold mining, because of its capricious cycles of boom and bust. These days, both sons are in the industry and Barkdull Spencer isn't complaining. One of her sons, who is 27, earns $100,000 a year and the other, who is 25, makes $90,000. It is hard to outshine gold in rural northeastern Nevada. With gold at record levels on a weak dollar, inflation concerns and U.S. economic uncertainty, Elko (population 22,000) is enjoying a boom. "We're at the peak of...

I heard it on TV so it must be true. All kidding aside, the last two days have been absolutely brutal for the commodities side of our portfolio and Wednesday, the energy stocks also got whacked. And I don’t know about you folks but I haven’t reached that zen, Buffett-like state where falling prices don’t faze me. They faze me. A lot. In my experience, the periods in which my self-doubts peak are honestly the times I should have been buying. Even in the short time since this website/blog has been up (since 01/2007), the market has already tested me...

Could the commodity currencies fall further? Yes. According to the Baltic Dry Index charts below, commodity prices will continue to fall. For those of you who do not know what the Baltic Dry Index is, it was once termed the “Best Economic Indicator You’ve Never Head Of” by Daniel Gross. This index is closely followed by all Wall Street Insiders because it is a good indicator of economic growth and production. In a nutshell, the BDI reflects how much it costs to ship raw materials (like coal, iron ore, cement and soft commodities like grains and sugar) by sea. The...

LONDON -- Nymex light, sweet crude oil futures fell more than $3 to below $100 a barrel in London Thursday, as a further recovery in the dollar and renewed concerns over the health of the U.S. economy prompted investors to liquidate crude and other commodity positions. Following a week of volatile trade and steep price declines, analysts suggested Thursday that a turning point in investor sentiment is underway, one that could herald a stronger focus on fundamentals. "Severe seesaw price action over the past several days reflects investors questioning the logic that commodity prices should rise every time the macroeconomic...

The word "INFLATION" covers two very different concepts, and it's important to keep them separate, writes David Galland for Casey Research. The first concept is monetary inflation, which is when the supply of money increases faster than the supply of goods and services. The other concept is price inflation, which refers to an increase in the overall level of prices for goods and services. The relationship between the two is the relationship of cause and effect. Monetary inflation causes price inflation, because an excess of money reduces the value of each monetary unit. But while almost everyone sees price inflation...

In his recent letter to shareholders, Warren Buffett quoted a Silicon Valley bumper sticker: "Please God, just one more bubble.” Well, that driver got his wish, but the bubble is in commodities this time around — not tech. From wheat to gold to copper, commodity prices have exploded over the past five years. Many experts say a bust is imminent. "We’re seeing bubble-like trading activity from speculators that has sent markets to levels that basic fundamentals probably don’t justify in the near term,” Bill O’Neill, former director of commodity research for Merrill Lynch and now a partner at LOGIC Commodity...

NEW YORK (AP) — Gold futures had their worst day in nearly two years Wednesday, beaten down after a smaller-than-expected interest rate cut bolstered the dollar and diminished the metal's appeal as a hedge against inflation. Other commodities also traded lower, with crude oil, silver, copper and agriculture futures all falling sharply as part of a broad commodities sell-off. The Federal Reserve on Tuesday lowered interest rates for the sixth time since September, moving aggressively to counter growing turmoil in financial markets that led to the near-collapse of investment bank Bear Stearns Cos. The Fed cut its benchmark federal funds...

Frank Holmes, chief executive officer at U.S. Global Investors, says that gold will hit $2,000 an ounce and that while the move won't be straight there from current levels investors should not be surprised by it. Holmes noted that virtually all commodities have gone through their "inflation-adjusted 1980 price levels," with the notable exception of gold, and that to get to that range the price of gold would have to top $2,000 an ounce. Holmes said he expects a short-term pull-back in gold -- based on a correction he sees coming in oil and a short rally in the dollar,...

WASHINGTON (Reuters) - U.S. bakers lobbied the Bush administration and Congress on Wednesday to build up wheat supplies and take other measures to dampen wheat and flour prices. Robb MacKie, head of the American Bakers Association, said booming prices for wheat has brought the U.S. food industry to a crossroads -- threatening profits, jobs, and potentially boosting prices by double digits for consumers when they buy everything from bread to pizza. "It's going to get much worse," MacKie told a news conference with other members of the baking industry, who will meet Agriculture Secretary Ed Schafer and other officials in...

The global volume of futures and options trading soared by 28 per cent last year, the largest annual increase since 2003, fuelled by a sharp rise in equity market volatility and a rush to commodity related contracts. More than 15bn futures and options contracts changed hands during 2007 at 54 exchanges across the world, according to the Futures Industry Association. The results show the rate of growth accelerating after a 19 per cent rise in 2006, 12 per cent in 2005, and 9 per cent in 2004. It is the largest volume rise since volume jumped 30 per cent from...

Commodities were at the centre of one of the earliest known financial bubbles – the tulip mania that hit the Netherlands in the 17th century. The price of the flower was lifted by huge investment demand to a peak of 1,500 guilders a pound in February 1637 – equivalent to what a master carpenter made in about four years. It had seen a tenfold increase in the space of two months and was trading at a level not supported by demand-supply fundamentals. Amid record costs, demand for tulip bulbs soon evaporated and prices crashed. Fast-forward about 400 years and some...

London and Europe join global equities sell-off By Michael Hunter in London and Lindsay Whipp in Tokyo Published: March 3 2008 08:54 | Last updated: March 3 2008 08:54 Europe joined the global sell-off on equities markets on Monday, as the dollar continued to trade around the $1.52 mark against the euro, helping commodities prices to linger around record levels. As European stock markets opened for business, gold continued to close in on the $1,000 mark, rising to $982.60 a troy ounce, up from $975.90 at the close on Friday. Crude looked to have established a foothold above $100 a...

Soybean futures on the Chicago Board of Trade hit their highest levels since 1973 on strong technical buying and bullish long-term fundamentals, which included concern over securing enough U.S. soybean acres for next spring. U.S. soybean acreages have fallen sharply as farmers jumped to corn amid a rally in prices of the other crop last year. In Friday's trading, CBOT soybeans for January surged as much as 17.25 cents to $11.78 a bushel. They closed at $11.77-1/2, up 16.75 cents CBOT corn for March rose as much as 10.5 cents to a 11-year high of $4.48 a bushel on indications...

Rising Crude Oil Pushes Consumer Prices Higher Monday, November 12, 2007 | 09:00 AM in Commodities | Consumer Spending | Federal Reserve | Inflation I'm not sure what to make of the Core-heads -- that motley collection of blinker-eyed ostriches who either claim there is not much in the way of inflation, or refuses to acknowledge the impact Oil prices has on everything else we consume. Despite all of the obvious price data and anecdotal evidence to the contrary, they insist there is little or no inflation. Policy makers who believe this tripe are making a serious mistake. Why> Because...

Imagine that a cardiologist told you that aside from the irregular heartbeat, the stratospheric cholesterol count and a little blockage in your aorta, your core heart functions are just fine. That's precisely what the government's cardiologist—Ben Bernanke, chairman of the Federal Reserve—has just done. The central bank is supposed to make sure the economy grows fast enough to create jobs and make everybody richer, but not so fast that it produces inflation, which makes everybody poorer. "Readings on core inflation have improved modestly this year," the Federal Open Market Committee said in justifying its 50-basis-point interest-rate cut last month, while...

BEIJING, Sept 19 (Reuters) - China's move to freeze prices of commodities under state control, including oil products, will sustain robust demand despite record-high crude, tightening supplies and inflame refining losses, industry officials said. Beijing's announcement on Wednesday not to raise prices that it controls for the rest of 2007 amid mounting fears over inflation also threatened to force the shutdown of independent small refineries that supply 15 percent of China's oil market. With U.S. crude (CLc1: Quote, Profile, Research) above $82 a barrel, China's domestic fuel price freeze will lead to greater losses at all its refineries. Beijing last...

Chicago Mercantile Exchange lean-hog futures rose on news of a 60-million-pound pork deal made between a major Chinese trading company and Smithfield Foods Inc.

Wheat prices climbed for a fifth consecutive session Thursday, and the most heavily traded contract hit a new all-time high on the Chicago Board of Trade as traders continue to price in robust worldwide demand and shrinking supply. The U.S. Department of Agriculture said Thursday that wheat supplies available for export plummeted in July and said "stocks could be driven down to unprecedented low levels." Rain, frost and drought in different parts of the European Union ravaged wheat crops this year, leaving the EU with less to export and boosting its import requirements. Poor weather also ruined crops in the...

ANGELES (Reuters) - Starbucks Corp. (NasdaqGS:SBUX - News) will raise U.S. prices on coffee, lattes and other drinks by about 9 cents a cup next week to help offset soaring costs on commodities such as milk and energy, a spokesman said on Monday. The move marks Starbucks' second price increase in less than a year and comes a month after the coffee shop chain's chief financial officer warned that it would be "very challenging" for Starbucks to meet the high end of its 2007 earnings forecast, due in part to rising dairy prices. The higher costs have also been a...