STEADY DEMAND FOR GOLD IN INDIA, CHINA

Gold is slightly lower this morning after recovering from an overnight dip. The dollar is stronger, up 4 basis points at 77.05, while gold is trading at $1,147. Silver is down $.18. This morning's correction is largely just a profit-taking correction and consolidation of the recent gains. Gold traded in a fairly wide range overnight, reaching a low of $1,144.30 and a high of $1,160.20. Demand for gold is strong, as India reported that they imported 34 tons of gold in December versus 3 tons a year ago. In India they are aggressive buyers on any correction or dip in the market. At this point, they have gotten used to gold prices well above $1,000 an ounce and are buyers on any dips toward support levels.

The Dow Jones Wire Service reports that not only was there steady demand in December, but also in the first week of January. Total gold imports last year in India, the world's largest consumer, declined to 343 tons compared with 420 tons in 2008, as a result of rising prices. China made up the difference in a slack in demand from India. China is now emerging as the world's largest consumer of gold.

It is noteworthy that the Wall Street Journal reported yesterday that the U.S. government is providing inflation-protected treasuries in large denominations to meet the demands from big creditors such as China and Japan. In response to that action by the U.S. government, yesterday the Chinese government said the dollar may not have much more room to fall. This now becomes a matter of propaganda more than anything else. Fundamentally, the enormous amount of debt accumulated by our government means that the dollar must fall over time. Perhaps China made these remarks because it continues to be a large buyer of gold. China wants time to be able to move out of its enormous holdings of dollars and into gold and other assets. Nevertheless, there was some reaction in the market based on the point of view of the dollar and gold but that reaction, as you can see, has been extremely muted. In short, most people aren't buying it.

In the view of most analysts, gold continues to move higher and is likely to reach above $1,200 in the near-term. A move to $1,300 or $1,400 is certainly possible in the first half of the year. In the view of many analysts gold presents an excellent buying opportunity at these levels. Just as it was a serious buying opportunity below $1,000, below $1,100 and now below $1,200. FuturesTech said they "Tip $1,166.20/oz as next resistance, followed by $1,227.50/oz."

In overnight trading, platinum broke above $1,600 an ounce before easing back on some profit-taking. Platinum and palladium both have been turning in outstanding performances over the past few years. The same is true of silver, which has clearly outperformed gold and other assets over the past decade. Dow Jones Wire Service reported, "Barclay's Capital says break up through December 17 high at $1,132 confirms near-term base, turns focus on higher end of an unfolding range near $1,200 - $1,225; says in medium term gains can extend beyond this range, with $1,500 a primary objective; says eventual breakout above $1,125 - likely to trigger an explosive rally if past price action repeats." That technical analysis from Barclay's Capital is in itself enough to warrant investors moving funds into the gold market. Do so without delay.

Call Goldline at 1-877-341-2646 for assistance getting started and for a free information package that will provide you with the views of primary analysts such as Barclay's Capital, BofA/Merrill Lynch and others. You will also get the Dow Jones Wire Service article proving the President of France calling for a new global reserve currency to replace the dollar, as has been demanded by China, Brazil, Russia, India and others. Call Goldline now for the free information package at 1-877-341-2646.

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