Home Foreclosures Rise 112% Over The Year
by Joe Battaglia
Posted: April 29, 2008
A $2.50 drop in oil
combined with a 9 basis point rise in the dollar caused gold to pull back $14
at the open, with silver down $.38.
Equities are also lower. The
markets seem to be concerned the Fed may not lower interest rates when they
release their decision tomorrow.
Certainly the pressure from the stronger dollar and weaker crude oil has
been heavy on the metals and many other commodities. Analysts say a number of investors and funds are moving to the
sidelines in case of a surprise from the FOMC meeting. However, with consumer confidence falling in
the latest survey, foreclosures up 112% and home prices continuing to decline,
it is unlikely the Fed will not lower rates.
However, they may indicate they will be on hold for some time.
Home foreclosure rates have more
than doubled from a year earlier. They
have risen 112% over the year.
Moreover, home prices fell 12.7% in February. With housing so weak and consumer confidence lower, it would
appear that the Fed will lower rates tomorrow and regardless of what they say
about being on hold, they will probably have to continue easing interest rates
and keep the money supply rising at an aggressive rate. It's remarkable that 1 in every 194
households received a foreclosure filing during the quarter. Moreover, while there may be some housing
bargains out there, it is much more difficult to obtain a loan. This is keeping the housing market in a
continuing decline. Until loans become
more readily available, housing is likely to continue to decline.
On a positive note,
the European Central Banks only sold 18 million euros worth of gold last
week. That was a small amount. However, given the fact the market was
already weak it probably contributed to the softness that we saw. Perhaps the single greatest influence on the
gold market is that the euro has been weak and declining for the past three
weeks. Given the severe problems in the
financial system, the extraordinary amount of debt that our country has, and
the fact that we are paying for two wars, it is highly unlikely the dollar can
have any kind of a sustained rebound.
Looking at the
charts, gold is significantly oversold and momentum is beginning to
improve. This may indicate the period
of correction and consolidation may be in the process of completing. I would not be surprised to see this process
extend for a while longer. For the
moment traders and funds are looking for a bottom in the metals and other
commodities and a top in the dollar.
Standard Chartered Bank said yesterday they expect the dollar to
continue to decline over the remainder of the year. They expect a downtrend to last for several years. They also forecast that gold would average
$930 an ounce this quarter, $965 an ounce in the third quarter, and above
$1,000 an ounce in the fourth quarter.
Joe Foster of Van Eck said he sees gold at $2,000 by the end of December. Therefore, the correction and consolidation
process should be drawing to a close fairly soon. Standard Chartered Bank also said the long-term outlook looks
positive. They anticipate a worsening
economic environment to be the catalyst for higher gold prices and a resumption
of the dollar downtrend. If they are
correct, we should see gold gain about 6% in the next two months. Between now and the end of the year, it has
the potential to rise 14%. Given these
statistics and the forecasts by Standard Chartered Bank, Joe Foster along with
several other major banks and brokerage firms, gold and silver both present
excellent buying opportunities at these levels.
It is easy to get
started today. Simply call Goldline at
1-800-827-4653. Ask them 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
Krugerrands, Canadian Maple Leafs, American Eagles, Silver Bags and Silver
Bars. However, these assets do not have
the availability of Goldline's Price Guarantee Program. The Price Guarantee Program is extremely
helpful and provides you a two-week window of opportunity during which you can
re-price your order lower in the event of a correction. That means that Goldline assumes the risk of
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To receive the free information
package including quotes from Standard Bank along with the article that
explains why people should be storing up greater amounts of food and why oil is
expected to rise to $225 a barrel, with gasoline at $7 a gallon, call
Goldline. These articles explain these
things and are very helpful to all investors.
You will also receive the company brochure and a Coin Facts Risk Disclosure
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Call Goldline at 1-800-827-4653.
Investors should be mindful that past performance does not guarantee future results. Transaction costs are generally 5%
to 7% on bullion and 30% to 35% on coins. This is also referred to as the spread, or the difference between the buy price
and the sell price. The market must go up enough to overcome this spread before an actual profit is achieved. All markets go
up and down. Coins are a long-term, three- to five-year investment, suitable for 5% to 10% of the average portfolio. Please
see Goldline's Risk and Disclosure Statement for further details.
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