MARKETS MOVE SIDEWAYS
Gold was up nearly $20 overnight but has given back those gains to trade at near unchanged levels. Silver reached a high of $17.64 in the futures market and is still up about $.07 in early trading. Oil is down $.26 and the Dow is up 36 points. The market just seems to be moving sideways as the dollar continues to exhibit strength in what many refer to as a counter trend or bear market rally. The dollar is up 29 basis points at 76.33. Given the strength of the dollar, gold and silver are both doing solid work in hanging on to these levels. At some point the dollar rally will run out of steam and gold and silver will again, begin to post more aggressive gains, according to the views of many analysts.
Looking at the special 2010 report from BofA/Merrill Lynch that was issued this week, they see the dollar giving ground next year and gold moving to much higher levels. They also see oil averaging $85 a barrel and peaking at over $100 by the end of the year. This is due to the weakening dollar and the expectation that there will be some economic recovery. They also expect the emerging markets to lead the global economy. Asia in particular looks quite strong and the data out of China today indicate that their economy is improving considerably.
The factor that caused gold to ease back from its highs was the stronger than forecast retail sales data, which caused the dollar to rally. As retail sales increase there is an expectation that the Fed may begin raising rates and that is considered to be bullish for the dollar. November retail sales rose 1.3% versus a consensus forecast of 0.7%. Sales excluding autos were up 1.2%. However, as I point out so often many of these numbers are subject to significant revisions.
Based on the comments of BofA/Merrill Lynch and many other bank analysts including Goldman Sachs, Barclay's, HSBC, UBS and others, the expectation is that the dollar is fundamentally weak because our government has too much debt. In the past few days the credit rating agencies have warned the U.S. government and the UK that if we do not begin reducing budget deficits within the next two years, we are at serious risk of a credit downgrade. That would be very negative for the dollar. Given the fact that there seems to be no possibility of reducing the deficits and they are expected to actually be over $1 trillion a year for the next six or seven years, it is reasonable to expect the dollar to continue on its declining trend and gold to continue rising. BofA/MerrillLynch forecast that gold will be $1,500 an ounce in the next 18 months. That would represent about a 50% increase.
This period of correction and consolidation presents an outstanding opportunity for investors to be accumulating gold and silver assets. A number of prominent bank analysts have expressed that view. The Dow Jones Wire Service reported that noted investment newsletter writer Louis Navelliere said, "The only - and I repeat - the only direction gold is headed is up." With so many analysts forecasting gold at much higher levels down the road, it seems prudent to own some gold in one's portfolio.
Those who are prepared to get started today or would like to receive a free information package on investing in gold should call Goldline at 1-877-341-2646. Be sure you ask Goldline about their Price Guarantee Program, which provides a two-week window of opportunity to re-price your transaction in the event of a correction. In addition, be sure you ask for a free copy of the redactedBofA/Merrill Lynch 2010 forecasts. They are truly eye-opening and very helpful for all investors. Call Goldline at 1-877-341-2646 now to receive the free information package and the free articles.
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 ofa 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 on gold investing, call Goldline at 1-877-341-2646. 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 at1-877-341-2646 now to receive your free gold 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..."
