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Aden Sisters: Big Move Upward Expected for Gold

Release Date: 
Friday, November 8, 2013

Gold and Silver Prices

Gold prices fell this week on a stronger dollar and technical selling following U.S. economic news suggesting economic growth may be accelerating. “Bullion later came under pressure when U.S. GDP data showed economic growth accelerated in the third quarter as businesses restocked shelves. But the slowest expansion in consumer spending in two years suggested an underlying loss of momentum. A flurry of frantic sell orders shortly after the GDP data briefly hammered gold prices, sending them below $1,300 an ounce and setting the tone for the rest of the day.” (“Gold drops to 3-week low on ECB rate cut, US GDP,” Reuters, 11/7/13.)

Gold closed the week at $1,289.50, down $27.30. Silver was down slightly, $0.36, closing at $21.61.

Aden Sisters: Big Move Upward Expected for Gold; Silver Poised for New Record

In their November issue of The Aden Forecast, noted investors and newsletter writers Mary Anne and Pamela Aden discussed the future of gold and silver prices, noting the fundamentals which support both precious metals. 

“For now, however, the world is still viewing gold as a store of value.  Overall demand remains strong, despite the temporary dampers on gold sales in China and India. As Eric Sprott said, ‘It’s staggering to think demand for gold is twice global mine production.’  China is now the largest gold buyer and producer in the world. And with their economy looking better, especially in the manufacturing sector, gold continues getting a big boost from this area.”

“Today’s bull market has so far gained 661%, from its 2001 lows to the 2011 high. And gold has fallen 36% from its $1905 high. Is the second part of the bull market upcoming? We’ll soon see…At some point, a big move upward will very likely develop to catch up with some of the monetary excesses of the last several years…and this could easily coincide with the continuation of the bull market.”

“For all the lack of excitement, silver is holding its own and it still looks poised to rise.  It’s been in a four month rising trend since June and it remains firmly solid above $21.  Silver is also poised to outperform gold and it’ll be off and running once it closes above its August highs at $24.65.  We recommend holding physical gold and silver…”

“Follow the bankers.  When price manipulators take the gold price down, central banks see value and buy.  Mario Draghi, the head of the European Central Bank (ECB) said it well when he explained, ‘I never thought it wise to sell gold because for central banks this is a reserve of safety.’  He also said it gives non-U.S. dollar countries a good protection against fluctuations of the dollar.  This is clearly a different view than Ben Bernanke’s view that nobody really understands gold prices. He doesn’t seem to enjoy talking about the barbarous relic.”  (“Aden Forecast—November 2013,” The Aden Forecast, 11/6/13)

Analysts: Why Investors Should Own Physical Gold

Precious metals analysts Adrian Ash and Miguel Perez-Santalla dispelled certain misperceptions regarding gold and why investors should include physical gold in their portfolios. “Gold ownership yields security for the investor, the type of security a person seeks from insurance. It is the only physical form of insurance which both exists to counterweight your investments in bonds and stocks, and which is also a liquid, easily traded asset. Gold is also non-correlated with those more ‘mainstream’ markets. Meaning that its price moves independently of where other investment prices are heading. So the goal for most investors in holding gold is first as a safety net for their other assets. This metal has held value for thousands of years, and will hold value for thousands more…”

“Gold is 100% transparent, in that, unlike other easily traded investments it is only one thing, a pure and precious rare commodity which requires little space for storing great value…You can lose value owning gold if you buy high and sell lower, but you never lose it all…All assets including gold have to be looked upon as part of a strategy for the investor and not as independent pieces of life's asset management puzzle…”

“[George Washington wrote,] ‘Paper money will invariably operate in the body of politics as spirit liquors on the human body. They prey on the vitals and ultimately destroy them.’ It is difficult for those in power to try to overcome this truth, embodied by all of recorded economic history. And it becomes more ludicrous as governments also hold gold bullion in vast amounts.  The modern central banking system, now more than 100 years old, may seem to shape this perception. Yet in the last decade central bankers themselves, albeit in Asia and other emerging economies, have been significant buyers of the yellow metal. Western governments as a group have stopped selling gold...”  (“Who needs gold really?” Mineweb, 11/8/13)

Europe Continues Its Reliance Upon Cheap Money to Bolster Economies

 “The European Central Bank cut its benchmark interest rate to a record low after a drop in inflation to the slowest pace in four years threatened its mission to keep prices stable.  Policy makers meeting in Frankfurt today reduced the main refinancing rate by a quarter point to 0.25 percent. The decision was predicted by three of 70 economists in a Bloomberg News survey.”  (“ECB Cuts Key Rate to Record Low to Fight Deflation Threat,” Bloomberg, 11/7/13)

“The Bank of England on Thursday offered no surprises, leaving the size of its bond-buying program unchanged and holding its key lending rate at a record low of 0.5%, where it has stood since March 2009. The central bank's Monetary Policy Committee left its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($602.89 billion).” (“Bank of England leaves rates at record low of 0.5%,” MarketWatch, 11/7/13)

The Perth Mint Looks to Expand Due to Increased Demand

 The Perth Mint, which saw a 13% increase in coin and bar sales in September, is considering expansion of its minting facilities to meet future demand. “With gold and silver coins selling out as fast as they can be produced, executives at the Mint, which refines the majority of gold mined in Australia, say they likely have only one choice: expand.  Plans to install new coin presses are in their infancy, and no deadline for a decision has been set. Still, an expansion would help cement The Perth Mint's status as one of the world's biggest producers of gold coins, rivaling countries like Turkey and the U.S… [The Perth Mint’s sales and marketing director, Ron Currie] said purchases appeared to be supported by speculation that metal prices may have reached a nadir. ‘With the slight increase in price of late, some people are starting to think that it has bottomed and will now climb again,’ he said.”  (“Perth Mint Mulls Expansion as Gold Coin Sales Rebound,” Wall Street Journal, 11/6/13)

Goldline’s Express IRA Program

Many Goldline clients choose to include precious metals as part of their retirement planning especially during times of economic crisis and uncertainty.* Goldline’s Express IRA allows clients to acquire precious metals on their schedule; they no longer have to wait for your self-directed IRA to be funded before getting started.

Goldline's Express IRA not only provides clients with the ability to diversify their IRA on an expedited basis, clients can also qualify for Goldline's ground-breaking Two-Way Price Guarantee Program when they acquire $10,000 or more of our exclusive bullion coins.  When a Express IRA purchase qualifies for Goldline's Two-Way Price Guarantee Program, clients are protected on short-term upside and downside market movement: they can either call to reprice their coins if the selling price falls (up to a maximum of 28 days depending on the size of the purchase) or, if the selling price of the coins increase during the qualifying period, clients can call Goldline to acquire additional coins at the original selling price.

Goldline provides a wrap-up of the week's precious metals news along with important commentary on the American Advisor Week in Review audio program. Click here to listen.

*Federal IRA tax laws are complex and may change from year to year. Goldline believes it is appropriate to have 5%-20% of retirement portfolio allocated to precious metals. Other individuals and institutions may recommend different percentages. As with any investment, you should consult your tax advisor before making a decision regarding precious metals IRA investments.

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

You should review Goldine's Account Agreement along with our risk disclosure booklet, Coin Facts for Investors and Collectors to Consider ®, prior to making your purchase. Goldline has a spread or price difference between our selling price, called the "ask", and our buy-back price, called the "bid". That spread varies depending on coin or bar you acquire. Spreads on 1 oz bullion coins, 90% silver dimes and quarters, and one ounce and larger bullion bars are 13%. All other coins have a spread of 28%. There is also a 1% liquidation fee when you sell your coins back to Goldline. The market must go up enough to overcome this spread before an actual profit is achieved. Precious metals and rare coins can increase or decrease in value. 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 investment portfolio though others may recommend a different percentage.

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