Daily Commentary

Precious Metals Extend Their Gain

Gold and silver are both extending their gains after breaking out above resistance yesterday.  This morning gold broke out above resistance pushing through the $950 resistance on the key contract.  Gold is up $14 and silver is up $.38 at $18.18 an ounce on the futures.  Oil is also pushing higher, up $1.54 at $102.77.  The Dow and other stocks are weaker.  The Dow is down 92 points at 12,438.  Other commodities are also rebounding with food prices posting substantial gains creating a powerful inflationary impulse.   The dollar is down 53 basis points to 71.75.  The weakness in the dollar has been pronounced after its short-lived rally. 

Analysts from Barclay's Capital said, "On going inflationary concerns coupled with safe haven buying are likely to underpin gold prices over the forthcoming months."  Barclay's has been warning of the extraordinary size of the credit derivatives market.  JP Morgan alone has $90 trillion worth of these instruments on its books.  No one knows how much of that will fail.  Certainly there will have to be substantial write-downs on those credit derivatives.  If there should be a failure of another major financial institution these derivatives may become an unbearable burden.  Clearly the derivatives market is an albatross around the neck of the financial markets.

While we cannot say the period of correction and consolidation has fully run its course, it certainly appears that way.  HSBC Banks analysts James Steele said, "Re-emergence of the currency carry trade is an indication gold prices may go higher, at least in the short-term."  He further added, "The recent precious metals sell off, while severe, appears to have been short-lived, which is a sign the upward trend remains firmly intact."  The analyst at Standard Bank expressed much the same views. 

Given the opinion of these analysts, gold is a buying opportunity at these levels.  Call Goldline today.  Ask them to explain the features, benefits and cost structure of the various gold and silver investments that are available to you.  Select those that best meet your own personal and individual investing needs and objectives.  Investors who are looking for low transaction costs may wish to consider bullion assets like Krugerrands, Maple Leafs, American Eagles, silver bars and 90% silver bags.  Investors who would like to take advantage of Goldline's Price Guarantee Program, which has proven to be very helpful, that program is not available with the bullion assets.  It is only available with assets with collectible value such as Swiss 20 Franc gold coins.  With that program you have a two-week window of opportunity to re-price your order in the event there should be a correction.  This program is free, but you must ask for it.  When you acquire 29 Swiss 20 Franc gold coins you will receive the 30^th free.  In addition if you acquire $5,000 worth of pre-1964 silver half-dollars, you will receive free shipping.  You can combine both of those offers to obtain a free gold coin and free shipping.  Call Goldline now to learn the details of these special offers at 1-800-827-4653. 

Goldline has put some brand new articles into the free information package that I think will be helpful to all investors.  It includes an article from BankRate.com, which discusses whether this is the best opportunity to acquire gold.  It also includes a Dow Jones News Wire article interviewing Joe Foster the head of the Van Eck Global Gold Fund.  He is forecasting that gold may hit $2,000 over the next several years.  Everyone should read this information, as it is very helpful.  You will also receive the company brochure, which gives you an explanation of how and why gold and silver can help to diversify and protect your portfolios and you will receive a Coin Facts Risk Disclosure booklet, which all investors should read carefully before making an investment.  Call Goldline at 1-800-827-4653.

Investors should be mindful that past performance does not guarantee future results. Transaction costs are generally 5% to 7% on bullion and 30% to 35% on coins. This is also referred to as the spread, or the difference between the buy price and the sell price. The market must go up enough to overcome this spread before an actual profit is achieved. All markets go up and down. Coins are a long-term, three- to five-year investment, suitable for 5% to 10% of the average portfolio. Please see Goldline's Risk and Disclosure Statement for further details.

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