GOLD IS STRONG ABOVE $990 AN OUNCE

by Joe Battaglia | September 21, 2009

Precious metals sold off this morning in reaction to a very strong dollar. The dollar is up 46 basis points at77.01. This pressured all commodities including oil and gold. Gold is trading down $11.20 to $999.10 on the December contract. Silver is down $.39 and oil is down $2.55 near the opening. The equity market is also lower with the Dow down 78 points.

Today the story is all about the dollar, which bounced very aggressively off of its lows. Part of the reason that the dollar was so strong today, is that markets in Japan, Singapore, China and other Asian countries are closed for holidays. Many will have their focus on the Fed Open Market Committee meeting on Wednesday. The Fed isn't expected to raise rates, though investors will be listening for any signals as to when the Fed will start tightening monetary policy. With the economy beginning to show some early signs of potential recovery, there is concern that the Fed will start raising rates, which will strengthen the dollar.

Some analysts told the Dow Jones Wire Service that the Bank of England will also release its minutes on Wednesday and that any surprises hinting at low rates for longer than the market had expected, may hit the pound very hard. As a consequence, they said, "The dollar could see some support before this week's meetings as investors square their positions, take profits in the recent rally in the euro and other higher yielding currencies and seek safe haven shelter in the buck." They also said, "If the Fed committee leaves interest rates unchanged - and offers no rhetorical hints on when it might start to tighten monetary policy - the dollar should continue its recent slide against higher yielding currencies." They further pointed out that falling stocks also tend to bolster the greenback.

On Friday the IMF announced that its board had approved a plan to sell 1/8th of its total gold holdings or about 400 tons. This may have had some influence on prices this morning, but it had no impact on Friday. According to the plan they will sell most of the gold off market to other central banks (think China & Russia). Any gold that comes into the market will be pursuant to the European Gold Sales Agreement, which limits total sales by the European community at 400 tons per year. Over the last several years they haven't sold that much gold. Consequently,those who understand these markets do not feel that is a significant factor.

Last week the Adens reported that gold is super strong above $990 an ounce. Time will tell whether that level will hold during this period of correction and consolidation. James Moore of the Bullion Desk said gold could be quite volatile this week. The combination of the holidays and Fed jitters, is the kind of recipe to provide more volatile markets. As a result of these comments and observations some may see an opportunity to buy the dip. For example, Dow Jones reported, "Traders say pull back below $1,000 isn't a worry, technically gold's up trend remains intact, with next level of support at $990."

Those who wish to accumulate gold or to add to their holdings should contact Goldline at 1-877-341-2646 for their gold needs. You may also wish to ask Goldline to send you the free information package, and ask them to send you the 2009 Gold Survey update that was released about a week ago. That books sells for over $400 and you can get one for free by asking for it. You will also appreciate the free article package and the other information you will find informative. Call Goldline now at 1-877-341-2646.

Ask Goldline to explain the features, benefits and cost structure of the various gold and silver products that are available to you. 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, Swiss 20 Francs, 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 20 Francs, Double Eagles and Silver Dollars. Call Goldline at 1-877-341-2646 for further information on the Price Guarantee Program.

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.

To receive free information package on gold and precious metals investing, call Goldline at 1-877-376-2643.

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