Daily Commentary

Investors Should View Gold as Long-Term Holding

A stronger dollar up 36 basis points to 72.91 and very much weaker oil prices, down $2.07 at $128.96, sent precious metals prices tumbling.  In the first half hour of trading, gold is down $18.60, silver is down $.46 and platinum is down $81.  These are very heavy sell offs and the biggest drops since the middle of April.  This occurred as the GDP numbers were slightly better than expected.  If GDP is improving (I think that is doubtful) then the expectation is that the Fed may be less accommodative.  The latest data that was released would be consistent with an economy that is barely expanding, but not in recession.  However, one must remember the report is for the 1^st quarter and these numbers are subject to gross revisions.  In addition, the way this data is calculated is suspect.  In contrast with the GDP numbers that were better than expected, first time weekly jobless claims rose 4,000 to 376,000.  That was slightly less than had been expected. 

Larry Young, an analyst quoted by Dow Jones Wire Service said a number of fund participants are reallocating money out of precious metals and other commodities, into equities as the greenback becomes more muscular.  He also said that while the technical trend has been down for the past three days, with gold now looking toward the $860 support level, the sentiment is still to the upside.  He says, "We're just seeing a little correction here."  That view is consistent with those expressed by Merrill Lynch's analyst who forecasted a brief correction followed by a move back up above $1,000 an ounce by the end of September.  It also is consistent with a report yesterday from Commerzbank, which said, "We see gold moving more or less sideways over the next few months within a range of $850 to $950.  At the latest in the 4^th quarter, prices should pass the $1,000 market once more as physical demand picks up again."  Phil Klapwijk the chairman of GFMS said, "Gold may rise to more than $1,100 an ounce this year because of increasing investment demand.  The affects of the sub-prime credit crisis continue to provide a strong investment case for gold."

These periods of correction and consolidation are always difficult for investors.  However, those who are seasoned investors and have been in this market over the past eight years know that corrections and consolidations have been a principle feature of this market for the entire time that gold has tripled from $252 an ounce.  We are seeing a prime example of the bull market trying to buck off weaker investors. 

Many view gold as a significant buying opportunity at these levels.  Those who utilize Goldline's Price Guarantee Program have the benefit of being able to re-price their orders to lower levels and obtain more gold or silver for their money.  If you view gold as a long-term holding that is designed to protect your savings and to serve as insurance on your savings, then you will take advantage of the opportunity to acquire gold and silver at these bargain basement prices. 

The Wall Street Journal reported that oil producers are simply unable to keep up with the growing demand for oil.  Therefore, it would appear the correction we are seeing in oil and the dollar, both which are weighing on the precious metal sector, will be short lived.  Over the longer term oil is likely to continue moving higher and the dollar lower.  These are among the many reasons why investors are more aggressively turning to gold and silver during this period of correction and consolidation. 

Investors should contact Goldline at once to take the necessary steps to be properly diversified in this volatile market.  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 American Eagles, Krugerrands, Canadian Maple Leafs, Silver Bags or Silver Bars.  However, the Price Guarantee Program is not available with these assets. 

If you would like to take advantage of the Price Guarantee Program, which provides you with a two-week window of opportunity in which to re-price your order in the event of a correction, you must select assets with some collectible value such as Swiss 20 Francs, Double Eagles and Silver Dollars.  When you acquire 29 Swiss 20 Francs, you will receive the 30^th coin for free.  Investors may wish to consider several tubes of these coins to obtain several free Swiss 20 Franc gold coins.  Call Goldline at 1-800-827-4653 for further information.

To receive the free information package including the special booklet from the FDIC that helps you to understand whether your bank accounts are safe and enables you to be sure that your bank has the proper insurance to protect your deposits, call Goldline.  We also provide several other helpful articles.  There are also a number of other independent third party source articles that you will find extremely helpful and informative.  You will also receive the company brochure and a Coin Facts Risk Disclosure Booklet, which you should read carefully before you make an investment. 

Goldline will also send you a free CD of the special interview with analyst Frank Barbera if you ask for it.  This is a remarkable interview and I think everyone would benefit from listening to it.  Call Goldline now to receive your free information package at 1-800-827-4653.

^{You should carefully read the client Account Agreement and the Risk Disclosure information. These explain important things you need to know before you invest in precious metals, such as: past performance does not guarantee future results. Transaction costs are generally 5% to 10% 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, preferably five- to ten-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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