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Aden Sisters: Gold Still a Good Buy

Release Date: 
Friday, February 21, 2014

Gold and Silver Prices

Gold and silver prices were choppy this week on mixed economic and world news but ended the week in positive territory. “Gold futures rebounded Friday from a two-day decline, with violence in Ukraine fueling some safe-haven support for the metal as traders looked to upcoming speeches from Federal Reserve officials for clues on the central bank’s monetary policy plans and to the weekend meeting of the Group of 20 nations…Gold is ‘attractive as a hedge against exposure to emerging-market assets, acting as a stabilizer when emerging economies suffer wobbles. Recent events, for example in Turkey, show that these risks haven’t disappeared, and that problems in individual countries can trigger fresh demand for gold,’ said Gary Dugan, chief investment officer for Asia and the Middle East at Coutts.” (“Gold futures climb, set for third weekly gain,” MarketWatch, 2/21/14.)

Gold closed the week up $7.00, at $1,327.10. Silver prices closed at $21.95, up $0.34.

Aden Sisters: Gold Still a Good Buy

Noted investors and newsletter writers Mary Anne and Pamela Aden told their subscribers why they should continue to buy gold.

“It’s no secret that China is the world’s top producer and biggest buyer of gold. It had record production and consumption according to the China Gold Association. China’s 2013 consumption topped 1000 tons for the first time. China is on a mission to push up its gold reserves. It now holds the third largest amount of gold, behind the U.S. and Germany. The U.S. Mint, for example, saw a robust January with gold purchases surging 63%, while silver coin sales were even more impressive, almost quadrupling. And this is continuing the strong demand of 2013...The U.S. Mint sold 14% more gold eagle coins. But its silver coin sales broke records, in the biggest haul sold in a single year since the Mint started producing the series in 1986! This is just a sample of the demand around the world. Japan’s biggest bullion retailer, for instance, saw gold sales reach a 5 year high as investors sought refuge from Abe’s campaign to fuel inflation and weaken the yen. This is a world wide phenomenon as increasing demand for coins, bars and jewelry in many countries continues.”

“For long-term investors, a dollar cost averaging is your best bet when accumulating gold. And the price today is still a good buy…[I]f gold now stays above $1265, it could rise to the $1420 level…If the $1420 level is surpassed, we could see gold jump up to the $1536 level, which was the old support of a year ago before gold fell last April. And it’s also near the 23 month moving average.” (“The Aden Forecast—February 2014,” Aden Forecast, 2/14/14)

Russell: Gold “Becoming Scarce”

Veteran investor, newsletter writer and publisher of the Dow Theory Letters, Richard Russell, commented on gold and silver’s recent rise.

“The powerful performance of gold for weeks and weeks is a subtle sign that the Fed has already lost its grip. A position in gold is a position against the Federal Reserve. Unfortunately for the Fed, gold is traded across the face of the planet. And currently gold is telling us the truth about the Fed's money creation…Actual physical gold is becoming scarce…We may see some consolidation over the next few days, but so far in 2014 the metal has put on a strong performance, outperforming most other assets. Gold is up over 9% since the beginning of the year…Silver is also doing well, up nearly 13% this year…Finally, let’s look at the precious metals complex, and how its main players rate in terms of relative strength. First and foremost, there’s gold…with a good chance at challenging the HUGE resistance around $1540.” (“Dow Theory Letters—Letter 1540,” Dow Theory Letters, 2/19/14)

Gold Reaching Key Technical Levels

Gold prices are beginning to reach key technical levels, leading some analysts to believe prices could move even higher.

“The precious metal has kicked off 2014 on a hot streak and recently jumped above a key technical indicator that bolsters the case for continued gains ahead. Front-month gold futures on Friday jumped back above the 200-day moving average, a line that many chart watchers use as a guide to predicting long-term trends. The last time gold traded above its 200-day moving average was Feb. 11, 2013.”

“The latest streak marked only the fourth time since 1979 in which gold traded below the 200-day moving average for more than a year, according to Bespoke Investment Group. ‘Gold has been acting well all year, and the fact that it has now moved above its 200-day is another good sign,’ Bespoke says. ‘The action around the 200-DMA over the next several days should give an indication whether this brief flirtation above will become a more permanent trend.’”

“Stronger-than-expected data from China continued to defy expectations that the world’s largest consumer of the precious metal is seeing an economic slowdown, which is giving a boost to gold prices… Although investors often view Chinese data as prone to distortion, the upbeat reports have been enough to further fuel a rally that has seen the precious metal rise nearly 10% since the beginning of the year. The rally has been driven by investor concerns that a flagging U.S. recovery may slow the pace at which the Federal Reserve rolls back its stimulus program. Gold is often used as a hedge against economic uncertainty and weakness in the dollar, which has been hurt by the Fed’s bond buying policy.” (“Gold Prices Hurdle Technical Milestone,” Wall Street Journal, 2/18/14)

“[A]ccording to ‘The Godfather of Technical Analysis’, gold may be turning itself around. Ralph Acampora, managing director at Altaira Wealth Management, trained generations of technical analysts. No one knows technicals like Acampora and now he sees some upside ahead based on gold's short-term based on its charts. ‘If you look at the short-term chart, you'll see starting in late November, gold started to stabilize,’ says Acampora. ‘In technical parlance, it has traced out a mini-head and shoulders bottom. And, right now, if you look at the chart, you'll see that it's currently above its 200-day moving average. It hasn't done that in many, many months. The near-term target is $1,384. I feel very strongly about it.’”

“Gold's high in August 2013 – at around $1,434 per ounce – is the next level Acampora is watching. ‘If we were to get above that,’ he says, ‘anyone that's had a long-term negative call on gold would have to revisit that because that would change the negative bias. So, keep an eye on that.’” (“Gold’s doing something it hasn’t done in a long time,” Yahoo Finance, 2/19/14)

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 an 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. Listen to the show below:

*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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