The paragraphs below are excerpts from Richard Russell’s latest Dow Theory Letters, arguing the case for gold bullion.

“Today I ask myself, where would I rather have my subscribers be - loaded up in the Dow Jones Industrial Average or loaded up with gold?. And in all honesty, I believe they are better off in gold than in the stock market with DIA.

“There are a number of items favoring higher gold now.

(1) Interest rates are at zero, which means the ‘opportunity cost’ of owning gold now is highly favorable. You sacrifice no yield in owning gold vs. Treasury bills. T-bills pay you nothing, so you might as well have your money in gold.

(2) The Bernanke Fed will evidently stop at nothing in its all-out attempt to ‘jump start’ the wobbly US economy. This means spending and building debt at a never-seen-before rate. This will

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For Immediate Release

Chicago, IL – October 22, 2009 – Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include Barrick Gold (ABX), Eldorado (EGO), Goldcorp (GG), Freeport-McMoRan (FCX), Pan American Silver (PAAS), Market Vectors Gold Miners (GDX), S&P 500 SPDR (SPY) and Gold SPDR (GLD).

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This week: Gold Miners’ Margin Problem

As gold sets new highs, it would only be natural to assume that profit forecasts for gold mining companies would be soaring too. Surprisingly, profit forecasts are not jumping.

Though some brokerage analysts have raised their full-year projections in recent weeks, the Zacks Consensus Estimate is not moving higher for most gold miners. Rather, it is essentially unchanged for Barrick Gold (ABX), Eldorado (EGO), Goldcorp (GG)

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Barrick Gold Corporation (ABX), the largest gold mining company in the world, has entered into an agreement with Xstrata Copper Chile S.A., a wholly owned subsidiary of Xstrata Plc, to acquire Xstrata’s 70% interest in the El Morro project for $465 million in cash. Another Canadian miner, New Gold Inc. (NGD) owns the remaining 30% interest in El Morro. The El Morro gold project is located in the Atacama Region in Chile. The project has total measured and indicated resources of about 8.3 million ounces of gold and about 6.3 billion pounds of copper. The acquisition will add another large, high quality gold-copper resource to Barrick’s portfolio. In Chile, Barrick already controls a project, which is entering construction, called Pascua-Lama. It also has a 50% stake in another mine, the Cerro Casale project. El Morro is located near the Pascua-Lama and Cerro Casale projects. Xstrata ...

The global economy is in a lull right now. Some expect a recovery sooner, rather than later. Others, like us, think that we could see a second downturn. Either way, there’s one investment you need to own right now: silver.

Silver is the most flexible metal on earth. We’re not talking about its malleability. We’re talking about how it is used.

Let’s take the point of view of those expecting a quick, painless recovery. In that case, silver is a great investment. It has many industrial uses other precious metals don’t. As the global economy kicks back into gear, we’ll see more demand from electronics manufacturers, battery makers and solar cell producers — all of which use silver in their products.

There are thousands of uses for silver in industry. It is used in water purification, medical machinery and, of course, jewelry. All of these industries will begin to pump out products again,

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AngloGold Ashanti Ltd. (AU), the world’s third largest gold producer, plans to expand output through exploration. The company aims to produce up to 6 million ounces annually, up from 4.98 million ounces in 2008, largely by improving its mines and expanding through exploration. AngloGold expects the dollar price of gold to rise. The company has forecasted gold prices of $950 to $1,100 per ounce in 2010. It expects gold prices to rise beyond $1,100 if the downtrend in the US economy continues and investment demand for gold increases further. Although electricity costs and new wage settlements have put pressure on the company's bottom line, it has no plans to lay off workers to save costs. AngloGold is also planning to develop its La Colosa project in Colombia. In July this year, AngloGold had teamed up with African miner Randgold Resources to buy Moto Goldmines, which owns ...

Rare earth elements (REEs) have been the mystery metals of the mining world for years. Now, suddenly, everyone’s heard about them.

Before we delve into the reasons behind all the publicity, here’s the basic skinny on REEs: One, they are rare, at least sort of. Two, they are indispensable to modern technology. Three, the number of active, dedicated producers is tiny, with more than 90% of the world’s supply coming from China.

If you took high school chemistry, you probably remember the periodic table of the elements. But if you’re like most of us, even if you pulled a 95 on the chem final, you may not recall many of the details today. And there’s a better than even chance you never bothered to memorize the names of the REEs. It’s time to get reacquainted.

They’re generally clustered in a separate grouping at the bottom of the table, are known collectively as the

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Copper has long been called the "metal with the PhD" or the "smart" metal because of its apparent ability to predict changes in the economy based on metal demand and pricing. Copper is used in many industrial capacities, but especially in piping in residential and commercial construction.

On Mar 6, we discussed the signals copper was sending about the status of the global economic recovery as metal prices were soaring but the stock market was not in a blog post called Dr. Copper Sends Signals.

Back in March, copper and copper stocks were behaving differently from the rest of the market. Copper mining stocks hit their lows in November and then roared from there. They were not hitting new lows in March like the rest of the overall stock market.

Copper was also on a tear at that time, hitting a 3-month high on Mar 6.

Copper prices and

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A new type of ETF is becoming popular, offering alternatives to traditional sector funds in targeting different types of companies.

(Editor’s Note: The following is an excerpt from an article in the Exchange-Traded Funds Report in July. Subscribers to ETFR can read the complete piece here.)

Specialty-sector ETFs—also called “thematic” ETFs—have emerged as a major force in the ETF industry.

These ETFs run the gamut of investment possibilities, but have one thing in common: They look past traditional size and sector designations to carve out new investment areas, often driven by a single investment thesis.

Clean energy, infrastructure, nuclear power—by our count, there are now more than 40 of these unique ETFs on the market, with more than $10 billion in assets under management.

Investment manager Van Eck Global has been one of the most successful companies in carving out a foothold among specialty ETFs. Its Market Vectors Gold Miners ETF (NYSE Arca:

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Last week, Rio Tinto Plc (RTP) suspended talks with Chinese steelmakers over price cuts on iron ore. Rio, BHP Billiton (BHP) and Brazil’s Vale S.A. (VALE) were participating in the negotiation.

Tensions between China and Rio grew when the world’s second-largest miner spiked a deal with Aluminum Corp. of China (ACH). According to the contract, Chinalco would have invested $19.5 billion in the debt laden Rio. However, the Rio decided to form a joint-venture with rival BHP instead. Again, tension over the talks rose when four Rio employees were detained on July 5 and later charged with bribery and commercial espionage.

China, the world’s largest importer of iron ore, is now looking for just a 35% price cut, versus the 40% it wanted back in June, according to a Bloomberg report. That is slightly over the 33% cut that Rio has been proposing all along.

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

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.

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