INVESTORS SELL GOLD AHEAD OF FED ANNOUNCEMENT

by Goldline.com | August 10, 2010

Gold prices are easing on the New York Spot Market as investors await an announcement from the U.S. Federal Reserve on interest rates and any hints on further quantitative easing to combat the slowing economy. If the Fed downgrades expectations of U.S. growth, many investors believe it could push gold prices higher as traders sell stocks and buy the metal as a safe-haven. "I think it's going to be very supportive for the gold market," Phil Streible, senior market strategist at Lind-Waldock. "I think you're going to see an upward push through that $1,218 to $1,220 range ... and that'll set up for the end of the year where we end up rallying up and making a new contract high." (The Street, 8/10/10)

Stocks are sharply lower Tuesday, with the Dow in a triple digit sell-off ahead of the announcement from the Federal Reserve. Declines were broad based, with 28 of the 30 blue-chip Dow components lower. "All eyes are on the Fed statement," said Art Hogan, chief market strategist at Jefferies & Co. "The market believes there could be a change in the Fed's tone, commentary or even policy that reflects the recent soft patch in the economy." (CNN Money, 8/10/10)

David N. Vaughn of Gold Letter, Inc., advised subscribers to “look at the fundamentals” when contemplating the direction of gold prices for the next decade. In his most recent letter, Vaughn states, “physical gold will continue to be an excellent insurance as the Fed crashes the US dollar. Its not as important how high gold may temporarily rise as the knowledge that it is going to maintain its rate of value while the stock market crashes.” (Goldseek, 8/10/10)

† 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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