Gold and silver are
correcting again with gold testing the $1,050 level one more time. However, that level is holding very
nicely. Gold is down $10, silver down
$.39, oil down $.89 and the dollar on a big rally, which is prompting the
commodities to correct. The dollar is
up 34 basis points at 75.31. The
equities are also lower, with the Dow down 7 and the Nasdaq down 13. Clearly, the metals and other commodities
continue to track the dollar closely.
When the dollar falls the commodities including metals go up, and when
the dollar rises the opposite occurs.
The Conference
Board reported that the September leading indicators index rose 1% last
month. That was slightly above
expectations. Moreover, while the
economy is recovering according to Fed officials, it is doing so at a tepid
pace. Fed Governor Rosengren and others
are saying that the Fed will have to be cautious about raising rates and do so
at a slow pace. However, the Treasury
says the government is beginning to wind down the TARP program even though the
financial system is still fragile and several markets are still impaired.
Yesterday, the
White House indicated that they are going to restrict bonuses to employees of
seven of the banks and companies that got the largest amount of TARP
funds. Noticeably absent from that
group was Goldman Sachs. Of course,
Goldman and some other banks have actually repaid the TARP funds, so probably
the government has no jurisdiction over them.
However, it is interesting to observe how some of these huge banks get
all the benefits and none of the risks.
The Dow Jones Wire
Service reported: "A stronger global economy, and unchanged policy stance by
major central banks and a weakening dollar increased investment demand for gold
in the third quarter, the World Gold Council said Thursday." They added: "Moreover, we saw an improvement
in risk appetite during the quarter, which also put more downward pressure on
the dollar as investors sold U.S. treasuries in favor of higher yielding assets
overseas, further increasing demand for gold as a dollar hedge."
Demand for gold in
China is so strong, that the country imported a net 112 tons last year. This is in spite of the fact that China is
the biggest gold producer in the world.
Dow Jones Wire Service reported that the demand for gold in China was
driven by a 176% growth in investment demand and a 21% growth in jewelry demand. The article further said: "For the next five
years, China will still be a net importer."
China has been apparently buying gold on the dips and the demand there
is stupendous. Some analysts say the
demand for gold in China will exceed that of India, which imports the most gold
of any country.
Looking at that
data, it would appear that the fundamentals for gold are constructive as global
mine supplies seems to be continuing to decrease while demand is growing
aggressively.
In economic news,
employers took 2,561 massive layoff actions since September that resulted in
the loss of 248,000 jobs. New claims
for unemployment were ahead of expectations as the economy lost 531,000 jobs in
the week of October 17th. As
Eric Hommelberg recently said: "There is a lot of talk about recovery but the
simple truth is you can't have a recovery without people getting back to
work." In a report yesterday,
Hommelberg forecasted that gold will be above $1,250 an ounce within the next
six months. He joins a growing chorus
of analysts who believe the gold market will continue to forge higher over the
next several years.
Investors may wish
to take advantage of this period of correction and consolidation to either add
to holdings or to begin new holdings.
As I said yesterday, consider utilizing Goldline's Price Guarantee
Program to protect you from further corrective moves in the markets. Ask about the details by calling Goldline at
1-877-341-2646. In addition you should
be sure to ask for the free information package, which will provide you with
excellent information from major banks, brokers, strategists and
economists. The information will
include forecasts for the precious metals and an excellent explanation of the
problems facing the U.S. dollar. Call
Goldline now for the free information 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 on gold investing call Goldline at 1-877-341-2646. 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 gold investment 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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