GOLD PRICES REBOUND ON GDP

by Goldline.com | July 30, 2010

Gold is up on the New York Spot Market after the Commerce Department said that GDP growth has slowed to 2.4%, slightly below the Wall Street consensus view of a slowdown to 2.5%. Concerns of economic slowdowns have typically spurred gold demand. Out of the four recessionary periods since the U.S. abolished the gold standard, three have led to stronger gold prices. (The Street, 7/30/10)

All three major indexes are down on the New York Stock Exchange after government data showed U.S. economic growth in the second quarter was weaker than expected. Although down in today’s trading, stocks produced gains for the month of July. The market has been supported this month by strong quarterly financial results from major U.S. companies. But economic concerns have resurfaced in recent days as the corporate reporting period winds down. (CNN Money, 7/30/10)

Financial analyst Jim Sinclair told subscribers on Thursday that "Currency Induced Cost Push Inflation" cannot be avoided. “It will happen overnight as confidence in currency breaks. All of this has happened before,” he said. Drawing parallels to the dollar rally of 1931, Sinclair cautioned, “The dollar looked outrageously bullish as a mirror image of the weak European currencies. The media spoke of the USA in the manner of a refuge currency in 1931. Then it all changed as it has here and now. The dollar returned to its previous bear market, plumbing new lows.” Sinclair suggests we are in a trend of “quantitative easing to infinity,” which could ultimately prove to be very bullish for gold. (Jim Sinclair's MineSet, 7/29/10)

† 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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