Daily Commentary

Gold Awaiting Fed Decision

Silver is rallying nicely this morning gaining $.20 in early trading.  However, gold continues to wait for the Fed decision trading down $3.  Oil is up $.78 at $116.41 a barrel and the dollar is about unchanged at 72.88.  Equities are slightly higher. 

There is considerable debate about what the Fed decision may be today.  The likelihood is they will cut interest rates ¼% but will indicate vigilance against inflation and indicate there will be no further interest rate cuts for at least several months.  This result is already factored into the market.  It should have little impact on prices in the precious metals sector or in the equity market.  Some analysts continue to think that in the shorter term gold could continue to experience some softness to test lower support levels.  However, over the longer-term and over the remainder of the year, almost all of the prominent analysts expect gold will continue to push higher with a test of $1,000 or higher by the end of the year.  Assuming these analysts such as Standard Chartered Bank, Joe Foster, James Sinclair and many others are correct, gold is in a tremendous buying opportunity zone. 

Investors may wish to accumulate gold and silver assets at these price levels.  It's interesting that silver is showing greater relative strength at this point.  Silver rising is likely due to the fact that there are some who believe the economy is beginning to stabilize.  In my view and that of some of the analysts that I respect a great deal, this is unlikely.  In my opinion there is a lot more pain to come in this economy before a bottom is seen.  While we are continuing to see reasonably good earning reports from major corporations, that is history – it is not looking forward.  With house prices falling, inflation skyrocketing, massive debt, massive budget deficits, and an inability of people who borrow money to engage in the development of new businesses or to buy homes, we are probably headed for more pain before relief arrives.

With regard to the markets, it is unlikely we will see any major developments due to the fact that Europe and Russia will be shutting down for the May Day holiday tomorrow.  That should mean metals trading will be thin until we get through that holiday.  There is no fundamental reason for the euro to be as weak as it is or the dollar to be strengthening other than central bank intervention.  I think it is pretty clear that central banks have been quite aggressive in propping up the dollar and the Federal Reserve has been assisting in this process by reducing money supply over the past week.  This is a temporary situation and for those who understand what's going on, it presents again a clear opportunity to acquire precious metals during this period of correction.

The CPM Group, one of the most prominent analytic firms in the precious metal sector said that investor demand will likely keep silver prices strong this year, amid a backdrop of strong fundamental supply and demand factors.  While they acknowledge the current period of seasonal price weakness, they think overall the market looks great for silver. 

Investors who would like to get started with gold or silver should contact Goldline at 1-800-827-4653.  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, if you would like to take advantage of Goldline's Price Guarantee Program, which provides you with a two-week window of opportunity during which you can re-price your order lower in the event of a further correction you will have to select assets with some collectible value.  This program is not available with bullion assets.  It is available with Swiss 20 Francs, $20 gold pieces, silver dollars and other similar assets.  When you acquire 29 Swiss 20 Francs you have an additional benefit in that you will receive the 30^th Swiss 20 Franc gold coin for free.  Moreover, if you acquire $6,000 worth of qualified assets you have choice of receiving a free 1700-year-old Constantine coin.  This coin is authenticated, graded and encapsulated by a grading service and it comes in a beautiful wooden presentation case.  Call Goldline now to get started with your precious metal investment and to take advantage of the special offers at 1-800-827-4653.

To receive the free information package call Goldline.  You will receive information from a prominent financial publication explaining why you should be storing food due to food price inflation and you will receive information on oil rising to $200 a barrel, along with information on investing in precious metals as a hedge against inflation and because of the potential it has for extraordinary gains ahead.  You will also receive the company brochure that explains the benefits of owning gold and silver and a Coin Facts Risk Disclosure Booklet 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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