GOLD IS A BARGAIN

Gold traded lower overnight, dipping as low as $1,090.60 on the February contract before bouncing back in the New York market. After the markets opened in the U.S. gold recovered most of the losses to trade slightly lower, down about $1. Silver recovered most of its losses as well, but still held to a $.21 loss, while the dollar was up 10 basis points at 78.53. Oil is near unchanged at $74.65 a barrel and the equity market, which began the day on a slightly positive note has turned negative down 18 points.

The pressure on gold comes from the dollar extending its gains to the upside. There is also some position squaring ahead of the outcome of the FOMC meeting and the ongoing debate about banking regulations proposed last week. One of the nice things about the dollar rally is that in spite of its high levels, gold is trading close to $1,100 an ounce. If the dollar now were to decline back to its 18-month lows, at around 70 on the index, it could produce a large gain in the precious metal complex. Remember the last time the dollar was this strong, gold was dramatically lower. In other words, investors should consider whether this situation with the dollar is setting up the market for a large up move in the gold market. As you know, so many of the major market analysts and brokers and banks have been forecasting gold to reach significantly higher levels in the $1,350 to $1,500 range over the remainder of the year.

Also influencing the metals this morning was Toyota's decision to halt sales of eight of their most popular model vehicles and shut down their production facilities, until they can develop a work around for the sticky accelerator pedal problem that they are experiencing. As you know, platinum and palladium are used in catalytic converters and therefore tend to react to sales and production trends in the auto industry. The same is true of silver, as it is used extensively in vehicles, particularly in windshields and other applications.

New home sales fell for the second month in a row, declining 7.6% in December, after a 9.3% decline in November.

Turning back to the gold market, the Dow Jones Wire Service reports, "Gold may peak near $1,300 an ounce over the next six months on investor worries over growing government deficits, rising demand from central banks, dollar weakness and safe haven buying, says Invest Tech. With a global recovery unlikely to be smooth, the two main risks to most asset values are inflation and a weak U.S. dollar, both of which are positive for gold." Worries over EU sovereign debt are also prominent in the metals markets.

There is a rumor that China is going to loan some money to Greece to help them through their sovereign debt problems. If that is true, China will get a bigger foothold in the European markets, which is something they consider a positive development. It appears that China now has the second largest economy in the world surpassing that of Japan. I heard this morning that the U.S. economy is approximately $14 trillion a year. It is amazing that our national debt is approaching that level very rapidly. Meanwhile, there continues to be severe problems in the financial system. A Fed official said that credit remains tight and the banks will face more losses ahead. All of that is a weight on the equity markets.

Looking at the forecast for gold over the coming year from the major analysts, it would appear that gold is still a bargain buying opportunity. Over the past few days we have heard a number of analysts commenting that there was excellent demand from bargain hunters in this market. Those who would like to take advantage of the bargain buying opportunity in the precious metals should contact Goldline at 1-877-341-2646. They can assist you in getting started today. They have several special offers that you should inquire about. Also, you may wish to take advantage of Goldline's Price Guarantee Program that provides you some protection against market corrections after you make your purchase. Ask Goldline for the details of this special offer. Be sure you ask for the free information package, where you will receive a free copy of the American Advisor Newsletter, a $25 value. Be sure to also ask for the free CD interview with Philip Klapwijk. He was the most accurate forecaster of precious metal prices last year and among the best for many years. Call Goldline at 1-877-341-2646 now to receive the free information package.

If you would like to take advantage of the Price Guarantee Program, which provides you with a window of opportunity in which to re-price your order in the event of a correction, you must select assets with some collectible value such as 20 Francs, Double Eagles and Silver Dollars. Call Goldline at 1-877-341-2646 for further information on the Price Guarantee Program.

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 information package.