Gold, Silver and Oil Up Dramatically
by Joe Battaglia
Posted: June 6, 2008
Gold, silver and
oil are all up dramatically this morning, while the dollar is lower. An unexpected increase in the unemployment
rate to 5½% caused the dollar to fall 25 basis points to 72.78, as it lead to
the belief that the Fed has no possibility of raising interest rates in this
kind of an environment. In addition,
oil is up $6.30 at $134.09. It was up
almost $6 yesterday. The total for the
two days is about $13 a barrel on the upside.
Was this a failed effort at intervention in the oil and dollar markets
by central banks, especially the Fed and its Exchange Stabilization Fund? It sure looks like it.
Gold is up $19 in
early trading, while silver has gained $.12.
Gold and silver along with other precious metals moved into the positive
column in reaction to higher oil and a weaker dollar. The huge rise in oil and gold has prompted a lot of short
covering in both markets. It is also
generating renewed buying by investors after gold held support. Analysts are now targeting resistance for
August gold in the area of $898 to $902.
Clearly, a break out should lead to the $930 to $950 range. These markets are performing almost precisely
in the way the major analysts have been forecasting. Once this cycle of correction and consolidation has fully run its
course, then we should see the metals challenging and moving above $1,000 an
ounce.
For the moment the
equity market is not fairing very well.
The Dow is down 211 points at 12,393.
Other stock indices are also sharply lower. Investors need to be cognizant of the fact that while
unemployment is rising, it puts further pressure on the housing and credit
markets. This puts further pressure on
the banking system. In turn, this
forces the Fed to continue to be very accommodative with an "inflation be
darned" attitude. Fed Chairman
Bernanke's entire history has been one in which he has devoted himself to
fighting deflation. In fact, he
kiddingly said if necessary he would drop $100 bills from helicopters in order
to stop deflation. That is why he is
nicknamed "Helicopter Ben".
When you look at
the supply/demand outlook for gold it is very favorable. New mine supply is declining while demand is
increasing, which suggests higher prices ahead. This was the message of prominent mining executives at a special
conference in New York yesterday. The
forecast consensus at that conference was for a return of gold to above $1,000
an ounce this year. These are some of
the many reasons why investors should be accumulating gold and silver at this
time.
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 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 30th
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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