GOLD: RISK TO REWARD OUTLOOK IS FAVORABLE

Gold and silver are both lower this morning with gold down $9 and silver falling back $.08. Both have improved off the overnight lows. Gold is trading at $849 on the February contract while silver has held on to $11.20 on the March contract. Platinum and palladium are both substantially higher, gaining about $13 each. The dollar is the key factor again today, up 87 basis points at 83.51. Oil has turned around and looks as though it is going to move back into the $50 plus range. Oil hit a high just before the open of $50.47 a barrel, and is currently trading up $1.01 at $49.82.

Dennis Gartman said today that the re-weighting in the Dow Jones AIG Commodity index reduced its holdings of gold from 10.8% of the index to 7.95% for this year. This mandated a sizable liquidation in gold that could last a day or two more. Therefore, this technical factor could be providing a significant buying opportunity. At the same they increased the weighting of crude in the Commodity index and that may partially be responsible for oil prices rising. Gartman further said, "Gold's major trend remains upward."

From a technical point of view, gold has considerable overhead resistance in the $870 to $890 range. Each time it has failed at that resistance level, it pulls back to test the support at $850, which holds. Whichever way this market breaks will dictate the near term direction for gold. Another fact that could be positive for the gold market is that some of the other commodities, which include oil, cooper and certain other assets, are also on the move upward. This may be suggesting a return to commodity investment by some of the large funds. With most economists continuing to forecast that the economy will remain in recession and perhaps worsen, the outlook for precious metals should remain solid. In a recessionary environment the central banks of the world will continue to pump in money supply and the treasuries will make great efforts to stimulate their economies. This is particularly true in the United States. The stimulation of the economy and here in the U.S. increasing the money supply approximately 10% last year, all should bolster the gold price going forward.

Therefore, this corrective move we have seen with gold trying to consolidate between $850 and $885 may constitute an excellent buying opportunity. At some point, one would expect a break above $885 would carry to a test of resistance in the $930 range. If on the other hand there should be a break down significantly below $850, there is very good support between $830 and $840. Therefore the risk to reward outlook is favorable.

November factory orders fell more than expected, down 4.6%. This indicates a weakening economy. In addition, pending home sales fell 4% in November, indicating that the housing market will remains soft for sometime. Increasing the weighting of oil in the DJ-AIG Index and problems with Russia cutting back oil supplies and putting pressure on the oil market may be the key factor pushing oil back into the $50 range. It may also be due to the fact that the OPEC partners may actually be cutting back on production. There is a great deal of weakness in the euro, which is trading at $1.3339, which is down about $.03 from yesterday's trade. The euro is weaker because some of the members of the European Central Bank have been indicating that they may cut interest rates yet again. When they cut rates, it tends to weaken that currency against the dollar. However, what we are seeing is a constant series of competitive currency devaluations. That is usually a bullish situation for gold and I suspect it will continue to be.

To get started with a gold or to add to your holdings on this corrective move, call Goldline at 1-877-341-2646. Ask them to explain the Price Guarantee Program to you. In addition, you may wish to ask for the free information package, which you will find to be very helpful. It contains excellent articles discussing the possibility of formal or informal devaluation of the dollar and other key factors that are very important. The package also includes a number of articles that give you an insight into what the major banks and brokerage firms are thinking with regard to the dollar, the economy and precious metals. Some of the articles are forecasting that gold could rise about $1,000 an ounce in the first half of this year. Others expect higher levels, perhaps $1,200 to $1,500 before year-end. Citibank's article reveals that they think gold could possibly reach above $2,000 an ounce this year. With that kind of information available to you, it may assist in your overall decisions and your determination of whether to hold some proper diversification into precious metal assets. To receive the free information package, call Goldline at 1-877-341-2646.

Contact Goldline and ask them to explain the features, benefits and cost structure of the various gold and silver products that are available. Select those that best meet your own personal and individual needs and objectives. Those looking for low transaction costs may wish to consider bullion assets such as American Eagles, Krugerrands, Canadian Maple Leafs, Silver Bags or Silver Bars. However, the Price Guarantee Program is not available with these assets.

If you would like to take advantage of the Price Guarantee Program, which provides you with a two-week window of opportunity in which to re-price your order in the event of a correction, you must select assets with some collectible value such as Swiss 20 Francs, Double Eagles and Silver Dollars. Call Goldline at 1-877-341-2646 for further information on the Price Guarantee Program and how you may be able to receive free coins.

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.