GOLD CORRECTS THEN REBOUNDS

Gold started the day higher, reaching $1,019.50 in the overnight markets, but while it was firmer at the open it fell back shortly thereafter with gold down $3.30 in early trading. Silver reached a high of $17.40, but then pulled back to a $.20 loss, just after the open. The dollar is rallying, up 12 basis points at 76.30 and oil is down $.32 at $72.15 a barrel. Both of these factors weighed on the precious metals. In the view of some analysts today's action is simply end of week profit-taking and book squaring.

With the amount of volatility that we have seen in the markets, gold could easily end in positive territory as could silver. However, it is not out of the ordinary to expect some profit-taking after such a major upmove. In addition, analysts are discussing the possibility of a consolidation around these levels. George Gero of RBC Capital said that fresh buying continues to come into the market. In other words, dips are viewed as buying opportunities.

Yesterday, Larry Young said to the Dow Jones Wire Service regarding the correction, " It's just natural to see people take money off the table." Another analyst James Moore the Dow Jones Wire Service, "A record high for gold in coming days seems increasingly likely, with the dollar under pressure, risk appetite driving equities and commodities higher." Dow Jones also reported, "In overnight activity, spot gold recouped early losses on bargain hunting after retreating earlier on a dollar correction." They also said, "Further dollar strength could put gold under pressure again, although dip buying may keep it above the $1,000 per troy ounce, trader said."

Afshin Nabavi ofMKS Finance said, "Spot gold will likely range between $1,005 - $1,020/oz the rest of Friday, as there are no big data releases and profit-taking ahead of the holidays in China and the Middle East next week may cap gold's upside." Despite the likelihood of profit-taking, Nabavi says, "$1,000 - $1,005/oz will likely provide good support for gold next week." What Nabavi seems to be forecasting is a trading range to build a base, which would be similar to the type of performance that we have seen many times throughout the course of the bull market.

Some analysts even see a more significant correction ahead. However, the Aden Report says, "The gold price is super strong above $990 and could now rise to the $1,200 level before this intermediate C rise is over." In other words, if there is a correction, it likely is not anything of real consequence as long as gold stays above $990. Based on that forecast it is obvious that if there should be a correction, it would be viewed as a buying opportunity.

Along those lines, Dow Jones Wire Service said, "Spot gold is likely to be supported by dip buying when U.S. markets open, says a London based trader. Tips gold will hold above $1,010 an ounce, and says the uptrend will remain intact as it closes above $1,000 an ounce."

Based on all of this analysis, it would appear that gold is continuing to be a buying opportunity even at these levels. Along those lines, another trader told Dow Jones Wire Service, "I expect gold to firm up again and to consolidate in the $1,018 - $1,030 an ounce area before making an attempt to break the old record high."

Look at these market reports and evaluate them for yourself. If you continue to believe that the dollar will weaken, that inflation will rise, and that other alternatives seem unattractive, then you too should be accumulating gold at these levels. Call Goldline today for assistance getting started at 1-877-341-2646. You may also wish to receive the free information package, which includes an update to the GFMS 2009 Gold Survey. This update contains their latest price forecast along with other helpful and valuable information. Call Goldline at 1-877-341-2646 to receive that along with the free article package, a company brochure and other helpful information.

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