GOLD REBOUNDS AFTER EARLY SELL-OFF FROM INVESTORS MOVING TO CASH

by Goldline.com | May 05, 2010

Gold prices were sinking in early trade Wednesday hitting a low of $1,160 an ounce, but came roaring back to $1,176 as concerns continued over the debt situation in Europe. Silver prices were down 2.4% at $17.49 an ounce. (Bloomberg, 4:32pm, EST) Gold has kept pace with the dollar in the last week; however, investors need for cash amidst the continuing drop in stocks initially drove prices down.

Moody's announced Wednesday it was considering a downgrade of Portugal's debt, adding to the potential impact of the debt crisis. Also Wednesday, authorities in Greece said three people died in central Athens in a fire during street riots. (CNN MONEY, 5/5/10)

The latest reading on jobs showed some turnaround in the U.S. job market. Private-sector employers added jobs in April for the third consecutive month, according to Automatic Data Processing. (ADP)

Oil prices continued their slide for the second day (NYSE, 4:32pm, EST), but gasoline prices continued to rise according to the latest survey conducted for motorist group AAA.

In an interview with the Gold Report on April 30, ShadowStadts' John Williams states, "There's strong evidence that we're going to an intensified downturn ahead, but it won't become a great depression until a hyper-inflation kicks in." According to Williams, "The movement is already afoot, however, to try to relegate the dollar to some status other than a reserve currency. For example, OPEC purportedly is looking to price oil in something other than U.S. dollars." For long-term preservation of purchasing power, Williams recommends gold. "In terms of preserving the purchasing power of your assets, the best thing I can think of is physical gold. That's worked over the millennia. I'm not per se a gold bug. It just happens to be a circumstance in which it's the cleanest asset around for that," said Williams. (The Gold Report, 4/30/10)

† 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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