GOLD REMAINS IN LONG-TERM BULL MARKET
Gold declined sharply on a stronger dollar and lower crude oil prices. Gold fell nearly 2.3%, down to $939.90 on the Comex this morning. Silver was down $.67. These are very dramatic drops in a bull market. Once gold broke down below key support at the $950 level, it attracted a lot of stop-loss sales and further shorting. Analysts on the Dow Jones Wire Service said, "Gold losses are also coming as participants now gear up for book squaring and scrutinizing what is on the agenda for next week."
The dollar is up 89 basis points in early trading as the Japanese Finance Minister told Bloomberg News that his government firmly supports U.S. policies and the soundness of the country's debt. That comment about the "soundness" of our debt is the key feature driving the dollar up and gold down. However, if the debt was not questionable, he would not have needed to make such a comment. As a consequence, in my view, this market has drastically overreacted to this news. I strongly believe this may be the final cleanout move in the corrective process.
I must concede that gold is vulnerable down to the $932 level and if it should break below that it could easily move back to $890 to $900. If it did so, it would still remain in a major long-term bull market. It would still present a major buying opportunity. Investors should utilize this correction as another buying opportunity as we have seen so many times throughout the course of this bull market. Larry Jeddeloh said that they were looking to buy gold below $950 on a correction.
The University of Michigan one-year inflation forecast was for 3.1%, up from 2.9% in May. It is also the same number for a five-year forecast, which is totally illogical. However, the expectation is that inflation is on the rise and will continue to rise. Obviously, it will be substantially higher than these expectations over the course of the next five years based on the comments and reports of economists. When we look at these markets and consider investing opportunities, we must put that in the context of the analysis and forecasts of the major investment strategists in the world.
Look for example, at the free information package from Goldline and you will see an article quoting the top analysts and strategists on a global basis for BofA/Merrill. They are forecasting an average price for gold of $1,000 an ounce this year. Over the next few years, they expect gold to reach at least $1,500 an ounce on an average price. These forecasts imply gold annual highs in the $1,100 to $1,800 or $1,900 an ounce range.
These are forecasts that give great confidence to investors who are considering coming into the precious metals market as a proper diversifier. It is vitally important that investors not be shaken out by these short-term market swings. If you believe that the monstrous debt load that our country has accumulated is going to bring down dollar and lead to a new global currency, then you should be aggressively accumulating gold at these levels.
Call Goldline at 1-877-341-2646 for assistance getting started. You may wish to put gold in your IRA account or 401(k) rollover account. Goldline can help you in that process. In addition, you should read the free information package. Particularly, the articles from BofA/Merrill Lynch, along with the articles from Forbes.com talking about a formal devaluation of the dollar and several articles discussing the potential for the development of a new global reserve currency. Call Goldline at 1-877-341-2646 now to receive the free information package.
To receive the free information package, including articles on the dollar, the economy and gold, call Goldline at 1-877-341-2646. Goldline also provides several other helpful articles. There are a number of other independent third-party source articles that you will find extremely helpful and informative. 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 information package.
†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 Goldine's Account Agreement along with our risk disclosure booklet, Coin Facts for Investors and Collectors to Consider ®, prior to making your purchase. Goldline has a spread or price difference between our selling price, called the "ask", and our buy-back price, called the "bid". That spread varies depending on coin or bar you acquire. Spreads on 1 oz bullion coins, 90% silver dimes and quarters, and one ounce and larger bullion bars are 13%. All other coins have a spread of 28%. There is also a 1% liquidation fee when you sell your coins back to Goldline. 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.
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- S&P Capital IQ - Gold: $1,900 (in 2012) "Leo Larkin, metals and mining analyst at S&P Capital IQ, thinks that $1,900 gold might not be that much of a stretch [in 2012]. 'Gold has been ..."
- Citigroup - Gold: $2,300 - $2,400 (by end of 2012) "While we remain cautious on Gold in the near term...we continue to believe that the bull market remains intact...we believe that 2012 may be..."
- Leeb Capital Management - Gold: $2,500 - $3,000 (in 2012) "I'll give you my target for gold at the end of 2012, it's going to be trading somewhere between $2,500 and $3,000. This..."
- Global Hunter Securities - Gold: $1,800 (in 2012) "'What I am looking for is a gold price of $1,800 an ounce in 2012,' says Jeffrey Wright, senior research analyst at Global Hunter..."
- US Global Investors - Gold: $3,600 (by 2017) "'People get so caught up with the next three minutes for gold and they should really be focused on the next three years,' says Frank Holmes, ..."
- Goldman Sachs - Gold: over $1,900 (in 2012) "Wall Street investment bank Goldman Sachs predicts that gold's bull run will continue into 2012 with a low interest rate environment and..."
- CNBC - Gold: $2,400 (no period given) "Gold will top $2,400 an ounce. The long-term bull market in gold marches on. Gold won't make a straight shot to a new inflation-adjusted high. As long..."
- Nomura - Gold: $2,000 (by end of 2012) "Nomura has raised its forecast for gold prices to $2,000 an ounce by the end of 2012, from $1,800 earlier. The brokerage said the low-interest rate..."
- Morgan Stanley - Gold: $2,200 (in first half of 2012) "Gold will lead a rally in commodities in 2012 as Europe's sovereign-debt crisis continues to roil financial markets, spurring demand for ..."
- UBS - Gold: $2,050 average in 2012 "[Gold] remains one of the top commodity picks for 2012 as 'most of the factors that pushed gold higher in 2011 are not going away,' according to UBS..."
- Bank of America Merrill Lynch - Gold: $2,150 - $2,200 (average in 2012) "From a technical perspective we believe that the bull trend for gold remains intact… with gold having not yet met any of..."
- TheStreet.com - Gold: $2,500 (by May 2013) "I want to own gold here. I think gold is going to $2,500 eighteen months from now... Gold has been up for ten straight years and this going to be the..."
