CRISIS IN EUROPE - GOLD STEADIES

Events in Europe are now impacting the markets in the U.S. In Germany, the economy has come to a standstill, which indicates that all of Europe will soon come to a raging halt in terms of economic growth. This will put further pressure on their banks and it will put further pressure on their sovereign debt problems throughout the union. In Greece mass strikes are shutting down virtually all industries. Today there was another "one-day strike" that shut down all businesses and services including transportation and medical care. The people are protesting the draconian cuts that will be necessary to try to get their budget deficit in order and to prevent the country from engaging in a sovereign debt default. Solving massive debt problems such as they have in Greece or we have here in the United States, are extremely difficult to accomplish. The reason is that no one wants their benefits cut or their taxes raised. The harsh reality is that to reduce government deficits there would have to be massive cutbacks in government services and entitlement benefits. In Greece as in the U.S., the various political parties are not willing to get together and bite the bullet to bring the bad news to the public. Instead they posture, obfuscate and confuse the people in order to obtain political advantage. That is not statesmanship or patriotism. It is raw self-interest. In Europe we see this reflected in a declining euro as the very viability of the European Union comes into question. Here in the United States we see this reflected in a number of other ways including the so-called healthcare debate.

Turning to the markets, the precious metals fell back overnight with gold reaching a low of $1,090.20. However, it has rallied back in the New York market, currently trading at $1,101 an ounce, down a little over $2. Silver, after reaching a low of $15.62 has bounced back and is up $.03 at $15.92, all on the nearby contracts. The dollar is down 7 basis points at 80.79, oil is up $.43 at $79.29 a barrel and the Dow is up 70 points at 10,352. Once again it appears that the $1,100 level has held, providing excellent support. I suspect there is a lot of buying that has come into the market at these levels. If China wanted to be a buyer at about the same levels as India, it has had that opportunity. I would not be surprised to hear an announcement sometime in the next two months that China bought all or part of the IMF gold holdings.

The testimony of Fed Chairman Bernanke is one of the factors keeping participants out of the market and awaiting his comments before taking up new positions. There is also some uncertainty over a meeting that is scheduled in March by the Commodity Futures Trading Commission to examine speculative trading in metals. That could result in some changes in the trading rules that could affect precious metals as well. Nevertheless, the overall trend of the gold market is bullish and technical analysts are saying that gold has remained in a medium term bullish mode and that dips are buying opportunities.

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To receive the free information package on gold investing, call Goldline at 1-877-341-2646. You will also receive the Client Account Agreement, a company brochure and a Coin Facts Risk Disclosure Booklet. Read these carefully before you make a purchase. Call Goldline at 1-877-341-2646 now to receive your free gold investors package.