Precious metals
sold off this morning in reaction to a very strong dollar. The dollar is up 46 basis points at
77.01. This pressured all commodities
including oil and gold. Gold is trading
down $11.20 to $999.10 on the December contract. Silver is down $.39 and oil is down $2.55 near the opening. The equity market is also lower with the Dow
down 78 points.
Today the story is
all about the dollar, which bounced very aggressively off of its lows. Part of the reason that the dollar was so
strong today, is that markets in Japan, Singapore, China and other Asian
countries are closed for holidays. Many
will have their focus on the Fed Open Market Committee meeting on
Wednesday. The Fed isn't expected to
raise rates, though investors will be listening for any signals as to when the
Fed will start tightening monetary policy.
With the economy beginning to show some early signs of potential
recovery, there is concern that the Fed will start raising rates, which will
strengthen the dollar.
Some analysts told
the Dow Jones Wire Service that the Bank of England will also release its
minutes on Wednesday and that any surprises hinting at low rates for longer
than the market had expected, may hit the pound very hard. As a consequence, they said: "The dollar
could see some support before this week's meetings as investors square their
positions, take profits in the recent rally in the euro and other higher
yielding currencies and seek safe haven shelter in the buck." They also said that: "If the Fed committee
leaves interest rates unchanged – and offers no rhetorical hints on when it
might start to tighten monetary policy – the dollar should continue its recent
slide against higher yielding currencies."
They further pointed out that falling stocks also tend to bolster the
green back.
On Friday the IMF
announced that its board had approved a plan to sell 1/8th of its
total gold holdings or about 400 tons.
This may have had some influence on prices this morning, but it had no
impact on Friday. According to the
plan they will sell most of the gold off market to other central banks (think
China & Russia). Any gold that
comes into the market will be pursuant to the European Gold Sales Agreement,
which limits total sales by the European community at 400 tons per year. Over the last several years they haven't
sold that much gold. Consequently,
those who understand these markets do not feel that is a significant
factor.
Last week the
Aden's reported that gold is super strong above $990 an ounce. Time will tell whether that level will hold
during this period of correction and consolidation. James Moore of the Bullion Desk said gold could be quite volatile
this week. The combination of the
holidays and Fed jitters, is the kind of recipe to provide more volatile
markets. As a result of these comments
and observations some may see an opportunity to buy the dip. For example, Dow Jones reported: "Traders
say pull back below $1,000 isn't a worry, technically gold's up trend remains
intact, with next level of support at $990."
Those who wish to
accumulate gold or to add to their holdings should contact Goldline at
1-877-341-2646 for their gold investment needs. You may also wish to ask Goldline to send you the free
information package, and ask them to send you the 2009 Gold Survey update that
was released about a week ago. That
books sells for over $400 and you can get one for free by asking for it. You will also appreciate the free article
package and the other information you will find informative. 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,
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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