Correction Presents Buying Opportunity
by Joe Battaglia
Posted: June 10, 2008
Gold is trading
down $17 and silver is down $.29 this morning in the first 20 minutes of
trading. The metals are down because
Fed Chairman Bernanke, Fed Governor Fisher and several other members of the Fed
along with Treasury Secretary Paulson all came out jawboning the dollar
higher. They specifically said they do
not want the dollar to continue to decline and will take action as necessary to
cause the dollar to strengthen. This
implies they will raise interest rates in an effort to defend the dollar. Analysts are now betting that the Fed may
actually raise rates before the end of September. However, if they do so, it will certainly have a catastrophic
impact on the financial system.
Yesterdays USA
Today newspaper featured an article entitled: "Record Foreclosures Won't Ease
Soon". Sub-headline says: "It Doesn't
Get Any Worse Than This". Foreclosures
are proceeding at record rates and defaults are rising along with them. Patrick Newport, an economist cited by USA
Today said: "I look at a lot of housing reports, and this is probably the worst
report I've come across. We still think
home prices will drop another 10%, and foreclosures will remain elevated
through the end of the year." Even
Treasury Secretary Paulson said the housing crisis will not be over this
year. However, he did say he was hopeful
that prices would stop falling by the end of the year. In this kind of a situation, the more
defaults there are, the more pressure the banks come under as a result of the
leveraged derivatives that have been written around these assets. In addition, as defaults rise other aspects
of the economy will weaken also. It
seems to me if the Fed raises interest rates in the next couple of months or
does anything to constrict money supply, it will simply be a true shock for our
economy and for the banking system.
Therefore, I believe it is highly doubtful that they will do anything
other than "talk" the market up. They
did this two weeks ago and we saw a sharp correction in the dollar and gold as
a result. However, within a couple of
days people came to their senses and recognized what I said, that the Fed's
hands are tied insofar as this issue is concerned.
Therefore, in my
judgment, the correction we see today presents a buying opportunity. Remember also, gold was up over $23 on
Friday. It still has hung on to most of
those gains. Nevertheless, the dollar
is up 61 basis points at 73.47. Oil
also is stronger, up $1.51 at $135.83.
Equities are lower with the Dow down 28 points. Therefore, although a further dip is
possible in the near-term, I continue to believe that gold will be
substantially higher by year-end.
Analysts are forecasting average prices of about $935 to $950 an
ounce. That means the gold price will
have to move above $1,000 to achieve that average. Moreover, we have Credit Suisse, Merrill Lynch and so many other
banks forecasting gold will be above $1,000 by the end of September.
As a result of
those forecasts and the underlying fundamentals of declining supply and
increasing demand, gold presents an excellent buying opportunity at these price
levels. Those who have utilized
Goldline's Price Guarantee Program enjoy the benefit of being able to re-price
their order and obtain more gold or silver for their money in the event of a
correction. Some may wish to look at
re-pricing their orders on this dip.
Call Goldline today to get started with some gold and silver investment
assets, 1-800-827-4653.
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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