Daily Commentary

Metals Steady

by Joe Battaglia
Posted: June 18, 2009

Silver is about unchanged in early trading however, gold is up $5 in fairly active dealings.  Gold is up in spite of the fact that the dollar is higher by 16 basis points 80.31 and oil is down $.31 at $70.72 a barrel.  This demonstrates considerable strength in gold.  Gold is in the process of consolidating recent gains and remains in a well-established trading range. 

The government reported this morning that total jobless rates dropped sharply to nearly 6.7 million.  In spite of the fact that this was likely not a very good number, the wire services and major media touted it as wonderful news.  Some may look at it exactly the opposite.  We will know the details once we look at the broader measures of unemployment.  I suspect they continue to paint a dismal picture.  The total number of people collecting jobless benefits rose to 8.8 million, up from 8.5 million in the previous week.

While the dollar has bounced a little this morning, it is clearly in a declining trend.  Everyday we get more and more reports of countries that are concerned about the dollar.  Earlier this week we had a report that two Japanese businessmen were detained while trying to cross from Italy into Switzerland carrying with them $134.5 billion worth of U.S. government bearer bonds.  These bearer bonds are in denominations that are only issued to other central banks.  In other words, this was part of the reserve currency base.  It suggests that a central bank was trying to surreptitiously dump dollar holdings.  They wanted to dump the dollar holdings without telegraphing the sale to the market and causing the dollar to fall more.  Since these bonds were being held by Japanese citizens, it may be that Japan is reducing its dollar holdings surreptitiously.

 

With regard to the dollar, technical analysts say it is beginning to show weakness making a lower low and lower high yesterday.  Although the dollar is up this morning, it is likely to remain below the critical 80.50 resistance level.  If that occurs, then gold should get a bid pushing it higher.  If gold can rise above the $940 level, it should bring in some buy stops, which could help push it higher yet. 

A factor that demonstrates how bad the U.S. economy is appears in a Wall Street Journal article about Detroit.  According to the report, America's 11th largest city doesn't have a single big chain grocery store.  Nor do they have a Chrysler or Jeep dealership in the entire city.  Businesses have been deserting Detroit like rats from a sinking ship.  The city is becoming blighted.  One has to question how many other cities are similarly blighted across the country. 

Looking at the economic situation and the continuing stimulus in an effort to reboot the economy, one has to conclude that inflation will be the net result of this aggressive behavior on the part of the Fed and the government.  If you believe that budget deficits in excess of $1 trillion a year and a national debt climbing from $11.4 trillion to $14 or $15 trillion is a factor that will cause the dollar to fall and inflation to rise, then you need to be acquiring gold now.  There could, at some point, be formal devaluation of the dollar that will be sprung on the American people without notice.  You cannot afford to have that happen to you.  That is why it is so important to be prepared in advance. 

Call Goldline today at 1-877-341-2646 and get started today owning some gold or add to your holdings.  Ask Goldline to explain to you the Price Guarantee Program and other kinds of features and benefits that are available to you.  Also be sure to ask for the free information package, which explains the developments that are going on with regard to the debt and deficits, the potential for a new global reserve currency and formal devaluation of the U.S. dollar.  All of these are vitally important issues for all investors.  To learn more call Goldline now at 1-877-341-2646.

 Investors should ask Goldline 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 American Eagles, Swiss 20 Francs, Krugerrands, Canadian Maple Leafs, Silver Bags or Silver Bars.  However, the Price Guarantee Program is not available with these assets.

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 of a 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 including articles on the dollar, the economy and gold call Goldline at 1-877-341-2646. Goldline also provides several other helpful articles.  There are a number of other independent third party source articles that you will find extremely helpful and informative.  You will also receive the Client Account Agreement, a company brochure and a Coin Facts Risk Disclosure Booklet, read these carefully before you make an investment.  Call Goldline at 1-877-341-2646 now to receive your free information package.

 

^{You should carefully read Goldline's Account and Storage Agreement and our risk disclosure booklet, Coin Facts for Investors and Collectors to Consider. These provide important information that you should consider before investing in precious metals. Goldline's spread, which is the difference between the price we sell our products and the price we buy them back, generally ranges between 5% to 20% on our most common bullion products and 30% to 35% on all other products including our popular semi-numismatic coins such as the European francs, proof coins and graded coins. The market must go up enough to overcome this spread before an actual profit is achieved. All markets go up and down. 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 portfolio though others may recommend a different percentage. Please see Goldline's risk disclosure materials for additional information.}

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