Banks Take Away Homeowners' Lines of Credit
by Joe Battaglia
Posted: May 8, 2008
Gold and silver are
both higher today with gold breaking above $880 in early trading. Both are supported by a weaker dollar, down
18 basis points at 73.33. Oil reached a
high of $123.90 before easing back to $122.95.
Unleaded gasoline has risen to $3.65 a gallon on a national average
bases. Diesel is even more expensive
with a national average price of $4.15 a gallon. Gold is now seeing some short covering and technical buying. It is receiving some additional support from
news of a major gold mine planning to reduce its hedge book.
The ECB held
interest rates unchanged, as did the Bank of England. Hawkish remarks from ECB President Trichet that they are going to
continue to be extremely vigilant towards inflation, was the key factor in
causing the dollar to weaken. From a
technical basis there is resistance in the June gold contract from $880.50 up
to $888. A close above that level will
generate technical momentum for a move toward and above $900. Analysts believe most of the weaker players
have been shaken out of the market and the conditions are improving for another
test of the highs by year-end. In fact
some analysts like Thomas Winmill of the Midas Fund believe $1,200 an ounce
will be reached this year.
On the economic
front wholesale inventories were below expectations falling 0.1% in March. This suggests further price pressures
ahead. It further suggests that companies
are unwilling to stock up on inventories as they expect sales to slow. On balance, the market for gold and silver
is beginning to look more and more constructive each day. Once this period of correction and
consolidation has run its course, gold is likely to post new all time record
highs. In fact, with oil nearing $125 a
barrel, one would not be surprised at all to see gold push up to the $1,200
level sooner, rather than later.
Moreover, as equities begin to disappoint investors, we may again see a
shift of money out of the equities and back to the commodities, which would
further bolster gold prices.
We are in a window
of opportunity to acquire gold and silver at bargain basement prices. Investors should contact Goldline and 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
or Silver Bars. Investors who would
like to take advantage of Goldline's Price Guarantee program, will need to
select assets that have collectible value, as this program is not available
with bullion assets. With the Price
Guarantee Program you could make your investment today and if there should be a
correction within two weeks of the date of your purchase, you have the
opportunity to call Goldline and have them lower your cost accordingly, thereby
giving you more gold or silver for your investment dollars. Swiss 20 Francs, Double Eagles and Silver
Dollars all have the availability of the Price Guarantee Program. Moreover, when you acquire 29 Swiss 20
Francs, you receive the 30th for free. Silver investors may wish to have a look at the Proof American
Eagle Silver Dollars. These coins are
made as collectible coins and are remarkably beautiful. They come in the original mint box, with the
certificate of authenticity. They
normally sell for $54.95, however Goldline is offering them on a limited time
basis at $44 each. Call Goldline and
ask about the details of these special offers at 1-800-827-4653.
Call Goldline to receive the free
information package, which includes the brand new article that discusses the
fact that banks are freezing homeowners' lines of credit and the article that
discusses the benefits of owning food rather than having money in the
bank. Be sure you also read the Coin
Facts Risk Disclosure Booklet, which contains important facts you should know
before you make an investment. Call
Goldline now 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.
Back to Daily Commentary
