High Level Consolidation - Followed by Significant Move to the Upside
by Joe Battaglia
Posted: June 19, 2009
Gold and silver are
both near unchanged, but with an upward bias as gold is up $.60 and silver is
up $.04. Both are gaining strength from
the fact that the dollar is down 19 basis points. Analysts report that in their view the metals are still
consolidating with some recent profit taking after gains earlier this
spring. Oil is firmer, up $.45 at $71.82
a barrel after being as high as $72.30.
The equity market is higher, with the Dow up 40 points.
Standard Bank says
technicals are dominating trading in the precious metals for the moment. We must remember that this time of year is
normally the quietest for the precious metals complex. Very often we see significant corrections
during the month of June. However, this
year gold has held firm at these levels and is probably going to make another
move higher as we move into the autumn.
For the moment gold and silver both present excellent buying
opportunities during this period of consolidation. We have seen consolidations of this nature repeatedly. I have often referred to them as "high level
consolidations". Each has been followed
by a significant move to the upside.
Remember, every single year since the year 2000, gold has made a higher
average price rising from about $252 all the way to levels we are at now. Along the way we have seen corrections every
year. Nevertheless, the market is
poised for further gains in the near-term.
Mark Hulbert of the
Hulbert Financial Digest said that his indicators suggest gold is a buying
opportunity at these levels. He
believes the bull market will extend higher.
The Aden Sisters report says we are about to enter a massive up move in
the precious metals. They forecast gold
will make new all time record highs during the up cycle we have just
entered. In fact, they think $1,200 is
a reasonable target for this year and possibly higher. Many other analysts share the same or
similar views. For example,
BofA/Merrill Lynch is forecasting an average price of $1,000 an ounce. In order to achieve that level gold would
have to be over $1,100 between now and the end of the year. Fortis Bank is forecasting a high of $1,200. The editors of Barron's Magazine forecast a
high of $1,200. Therefore, a number of
prominent, responsible, and respected analysts are looking for gold to make
much higher levels. Some believe gold
will move even higher than what has been suggested by those cited.
One of the more
important pieces of information that I have come across in recent months is
that two Japanese citizens were detained at the Italian border attempting to
cross into Switzerland with $134.5 billion worth of U.S. government treasury
bonds. These are bearer bonds that are
fully liquid and negotiable. It is the
essential equivalent of carrying cash.
This is notable because it is an enormous sum of money. $134.5 billion would make these individuals
the fourth largest holders of U.S. government debt in the world. Second, it is notable because these are
bonds that would only have been issued to a central bank as part of their
dollar reserves. The denominations run
from $500 million to $1 billion for each bond.
No individual could own those bonds.
Therefore, we must wonder whether (a) the bonds are counterfeit – highly
unlikely; (b) some central bank is surreptitiously dumping dollars - likely or
(c) some central bank is moving its currency reserves into Switzerland for fear
that these reserves could be lost due to war or some other major calamity such
as revolution or a coup. However, the
sums are so large that only China, Japan or the U.S. government could be
involved.
Whatever the case
might be the sums are so large that it calls into question the ability of the
U.S. government to maintain control over its monetary reserves. Since that is the case, it could have a dire
impact on the dollar. For some reason
this news has been squelched in the United States. Bloomberg Wire Service is now challenging and questioning why the
news is being censored. I suspect it is
because the notes are legitimate and the U.S. government does not want the
embarrassment and problems that would come with this information becoming
widely known. Once again, this is an
enormous reason to accumulate gold at these levels.
Call Goldline at
1-877-341-2646 and join in with these prominent analysts to accumulate gold at
these levels. Remember, as I have said
Larry Jeddeloh is recommending that investors buy gold between $910 and
$950. We are clearly in that excellent
buying zone right now. Ask Goldline to
explain their Price Guarantee Program, which provides you a two-week window of
opportunity to re-price your transaction and get more gold or silver for your
money in the event of a correction. Ask
them also to explain the various gold and silver assets that are available to
you. Learn more about Swiss 20 Francs,
British Sovereigns, Double Eagles and other assets that present excellent
investment opportunities. Also ask
about putting gold and silver in IRA accounts or 401(k) roll over
accounts.
Be sure you request
the free information package from Goldline.
It contains excellent information about investing in precious metals and
it contains information on the dollar.
There are two articles that discuss the movement by the BRIC countries
to achieve a new global reserve currency to replace the dollar. In addition there are articles that discuss
the potential for formal devaluation of the dollar. Those articles come from Forbes.com. Call Goldline 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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