The IMF revealed it
sold 200 tons or half of its entire gold allotment to the central bank of
India. The fact that this was an off
market transaction is extremely encouraging for the market and helped gold to
rise nicely. The speculation is that
Russia or China's central banks will buy up the remainder of the gold. One analyst told Dow Jones Wire Service: "It
is very positive that one central bank takes half of the gold. That means there is demand for it. And it's a developing country bank at that,
which is interesting."
In reaction to that
news, gold rose to a high of $1,066.90 and even after some profit taking
remains up over $7. That is in spite of
the fact that the dollar is up 45 basis points at 76.74. The equity market is lower with the Dow
trading down more than 40 points. Oil
is also lower, down $.94 at $77.20 a barrel.
Silver and the platinum group metals are also lower, even though gold is
higher. However, I would suspect those
metals will play catch-up as gold hangs on to the gains throughout the
day. In other reports, the Dow Jones
Wire Service said: "Spot gold sharply higher as positive U.S. manufacturing data
boosts confidence in economic recovery."
Gold is now moving
to trade at a level that is close to a significant breakout point to the
upside. Many analysts have said that a
break above $1,070 to $1,075 would result in a move to $1,100. Barclay's has been forecasting a move to
$1,100 this month. One has to wonder
whether Barclay's had some information on this IMF gold sale, several weeks
ago. In addition, it was announced
yesterday that Barrick Gold bought back one million ounces of gold hedges during
the month of October. That shows
extreme confidence in the market and it also shows the expectation that gold
prices will be moving higher for a protracted period of time. Since Barrick Gold is among the most
sophisticated mining companies in the world with excellent analyses and
understanding of the markets, it may serve investors well to follow their lead
and accumulate gold at these levels.
In another positive
development, Dow Jones Wire Service said: "Investors are increasingly looking
to buy physical gold and are moving more gold to allocated accounts, which
means bars are stored and can't be lent out by the banks storing them, said JP
Morgan Managing Director Neil Clift."
This too would appear to be an extremely bullish development indicating
that the sophisticated investors, including institutional investors are
demanding physical gold rather than paper proxies. Dow Jones Wire Service also reported: "Gold may reach as high as
$1,150 per troy ounce by the end of 2009 on continued dollar weakness, Red Kite
Capital Management Precious Metals Manager Michael Sheehan told Dow Jones News
Wire Tuesday."
Clearly, this is in
line with Barclay's forecast of gold above $1,100 this month. Dow Jones News Wire also ran an article
entitled "Spot Gold May Rise More After India Gold Buy". In the article they said: "Spot gold could
gain further traction as speculation of central bank of India diversification
erodes demand for the dollar and fiat currencies."
In this
environment, investors should seriously consider owning gold or perhaps
increasing their allocation if they feel they are underweight. Call Goldline at 1-877-341-2646 for
assistance in getting started. You may
also wish to ask for the free information package, which investors will find
very helpful. Call Goldline at
1-877-341-2646 for your free information package.
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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