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Singer: Gold is “Real Money”

Release Date: 
Friday, January 31, 2014

Gold and Silver Prices

Gold and silver prices experienced a choppy trading week amid continuing problems as investors reacted to a growing emerging market currency crisis, slower growth in China and the Federal Reserve’s decision to further taper its quantitative easting program.  “Wednesday afternoon’s U.S. Federal Reserve’s Open Market Committee (FOMC) statement on its monetary policy showed the Fed did another $10 billion per month tapering of its quantitative easing, now at $65 billion in month in bond-buying…The FOMC statement also reiterated that U.S. interest rates will remain extremely low…[F]inancial markets are jittery amid worries about some non-major world currencies being stressed. Recent weaker Chinese economic data and concern about the U.S. Federal Reserve reeling in its very easy monetary policy are credited with pressuring several secondary world currencies in recent trading sessions. The main fear is the potential for a lack of financial market liquidity in the emerging nations, if the world’s major central banks start to turn off their easy-money spigots that have allowed the world markets to be awash in cash the past five years.  History shows that problems with smaller currency markets can spread to the majors and create a worldwide contagion. This is what has the gold market supported by safe-haven demand.”  (“Gold Ends Higher on Safe-Haven Demand; FOMC a Non-Event,” Kitco News, 1/29/14)

Gold closed the week down $23.10, at $1,246.90. Silver prices closed at $19.27, down $0.74.

Singer:  Gold is “Real Money”

Paul Singer, hedge fund manager for the $23.3 billion Elliot Management, advised investors to consider physical gold as an “alternative currency.”

“If you want an alternative currency, check out gold. It has stood the test of thousands of years as a store of value and medium of exchange.  Better yet, it is not just a computer entry in the ether somewhere, and it is currently available at a good price…We think that gold is a unique investment asset, the only real money that has stood the test of time throughout recorded history.  With its durability, finite and difficult-to-extract supply and natural allure, it is a store of value that should be particularly attractive at a time when monetary debasement is the major policy practiced by most developed countries to keep their economies afloat.”   (“Paul Singer: Bitcoin over gold? Are you crazy?!” CNBC, 1/29/14)

Ron Paul:  Gold is “Safe Haven”

Former U.S. congressman and presidential candidate, Ron Paul, told Yahoo Finance that gold continues to be a safe haven asset. 

“[Former Congressman] Paul sees 2013's gold price decline as merely a blip in the screen in the overall scheme of things. ‘I don't see gold so much in short-term because I see it in over a 100-year period.  Long-term, it will always go up so long as we have a Fed printing money. But, on the short-term, the traders have a lot to say about this. A correction like we just had last year – one year out of 13 – that's not a big correction. That doesn't destroy a so-called bull market.’”

“With continued stimulus, growing national debts, and market fear, Paul says investors will flock to gold.  ‘I think they're going to move to gold,’ says Paul. ‘Gold is going to be the safe haven which it's been for 6,000 years.  The most important thing about gold is it restrains the temptation of those who think they know best in what interest rates should be and what the money supply should be.’”  (“Ron Paul: Here's why gold is a safe haven again,” Yahoo Finance, 1/28/14)

Morgan’s Gold and Silver Price Targets

Precious metals analyst and publisher of The Morgan Report, David Morgan, gave his analysis of the current gold and silver markets, as well as his price targets for both, in a recent interview with The Gold Report. 

“There is no change fundamentally in why investors would buy gold in 2001 compared to why they would buy gold in 2013 or 2014. The fundamental fact is that there isn't a nation state on earth that has a handle on the debt problem. Because of that, we're going to see more people wake up to the need for precious metals, because precious metals are true money outside the framework of the current system…I think silver has bottomed. Gold probably has as well. This year, 2014, will be a rebuilding year. Depending on what happens in the global economic system, it's possible that we could even see a very good year for the metals, but I don't anticipate that. I'm anticipating a rebuild year where silver climbs back over $30/oz and gold travels up well over $1,600/oz, probably to the $1,700/oz level or higher depending on how the economy unfolds.”

“The bull market is not over and it's normal in these secular bull markets to shake off some bulls and reach the status that we are currently at where the sentiment is very low. There is a lot of distrust and a lot of people are questioning whether they should be in the sector. Those are signs that the bottom is in. Now is the time, for those not in the sector, to get in. For those already in, either hold what they have, add to their position or ride it out. A couple of years from now we're going to see much higher prices in the precious metals.”  (“‘The silver bottom is in: Time to hold, add and ride it out’ - Morgan,” Mineweb, 1/27/14)

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. Here is this week's show:

*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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