Daily Commentary

CIBC Analyst Says Oil To Soar To $225, Gasoline To $7

Gold and silver are both higher with gold gaining over $5 and silver up about $.18 in early trading.  While both are off the highs, they are still turning in an excellent performance given the fact that the dollar continues to strengthen, up 14 basis points at 72.67 and oil is up $1.70 at $117.76 a barrel.  There is also some book squaring going on ahead of the weekend with some traders covering short positions and anticipating a rally before next week.  With the potential for gold to bounce pretty aggressively from these levels, traders do not want to be short over the weekend. 

One of the reasons why we have seen the dollar strengthen so much is that the Fed reduced M2 money supply by $15 billion this week.  We also saw central banks coming in and buying almost $13 billion of treasuries, which means they had to acquire dollars to make that trade.  In other words, both of those were very important strengthening factors for the dollar.  Obviously, both are the result of central bank intervention. 

Some analysts are saying crude oil may get as high as $130 a barrel in the next few weeks.  That should push gold back about the $950 level and perhaps into the $1,000 range.  One floor trader told the Dow Jones Wire Service that gold is forming a base and should begin to work higher to perhaps $915 by Monday.  He said as oil gets to $130 a barrel, "the metals are going to explode to the upside."  I heard one analyst on Bloomberg television this morning say crude oil will rise above $200 with gasoline over $7 a gallon.  Jeff Rubin of CIBC who has accurately predicted oil's rise says oil will reach $225 in 4 years with gasoline at $7 a gallon.  Wall Street Journal says stock up on food because prices will explode upward.  We are providing quotes from these articles in the free information package.

Today Brazil prohibited rice exports.  With supermarkets in the U.S. starting to limit rice and other grain purchases, we are in a process of exploding food and energy prices.  This will continue to push inflation dramatically.  All of these factors are bullish for gold over the longer term. 

In addition, while everyone expects the Fed will be cutting interest rates only ¼% and then go on hold for several months, that may not be possible given the fact that consumer confidence has sunk to the lowest level in 25 years, manufacturing is slowing, and unemployment is rising.  All of these suggest a further deepening of recessionary tendencies and that I think will put pressure on the banks and financial system forcing the Fed to remain accommodative.

Given all of these factors, investors should be accumulating gold and silver at these bargain basement levels.  Call Goldline today to get started.  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 looking for low transaction costs may wish to consider bullion assets such as Krugerrands, Canadian Maple Leafs, American Eagles, Silver Bags and Silver Bars.  However, I think Goldline's Price Guarantee Program is a very valuable tool.  It is not available with bullion assets but is available with Swiss 20 Francs and other coins that have some collectible value.  This program gives you a two-week window of opportunity to re-price your order lower in the event of a correction.  In other words, Goldline takes any risk of loss for a period of two weeks giving you great protection.  When you acquire 29 Swiss 20 Francs you will receive the 30^th Swiss 20 Franc gold coin for free.   If you invest $6,000 or more in qualified assets you can also receive free shipping on your entire order.  Call Goldline now to get started with your precious metal investment and to take advantage of the special offers at 1-800-827-4653.

Be sure to ask for the free information package, which contains several brand new articles including an article from John Williams, which explains the reasons why the country and the world are indeed moving into a period of hyperinflation.  This is an important consideration for every person as inflation destroys the buying power of your accumulated savings.  It acts as a "tax" on savings.  Be sure you read the Coin Facts Risk Disclosure Booklet before making an investment.  Call Goldline now for your free information package 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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