GOLD CONSOLIDATING AS INVESTORS COVER STOCK LOSSES

by Goldline.com | July 01, 2010

Gold prices are consolidating as of 12:00 p.m. EST on the New York Spot Market as investors opt for cash at the beginning of the third quarter. Weak manufacturing data from China and weak initial jobless claims in the U.S. are weighing on risk appetite; however, with this week’s plunge in the Dow, gold is one of the assets investors can sell to cover losses in stocks.

Stocks are lower Thursday on the New York Stock Exchange after worse-than-expected reports on housing, manufacturing, and the labor market fueled fears that the economy is headed for another recession. Stocks were initially higher at the start of trading Thursday; however, gains were promptly reverse upon the release of the manufacturing and housing reports.

Gold may reach $1,300 an ounce by the end of the year according to Michael K. Smith, the president of T&K Futures & Options. ''Every bank around the world is printing money to help stimulate the economy,'' he said. “Gold may reach $1,300 by the end of the year as demand rises for a hedge against 'huge inflation.” (Business Day, 7/1/10)

† This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. You should review Goldline's Account and Storage Agreement along with our risk disclosure booklet, Coin Facts for Investors and Collectors to Consider ®, prior to making your purchase. Goldline's spread, which is the difference between the price we sell our products and the price we buy them back, generally ranges between 5% to 20% on our most common bullion products and 30% to 35% on all other products including our popular European francs, proof coins, silver dollars and half-dollars, and graded coins. The market must go up enough to overcome this spread before an actual profit is achieved. Precious metals and rare coins can increase or decrease in value. Past performance does not guarantee future results. Coins are a long-term, three- to five-year, preferably five- to ten-year investment. We believe precious metals are suitable for 5% to 20% of the average investment portfolio though others may recommend a different percentage. To receive free information package on gold and precious metals investing, call Goldline at 1-877-341-2646.
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