Daily Commentary

Gold Surges Above $900 - Bloomberg Analyst Forecasts $5,000 Gold

Gold is sharply higher rising $12 in early trading, while silver is up $.16.  Silver had been up over $.30 but has eased back in the last few minutes of trading as oil has fallen back.  Oil has moved from a high of $137.82, down to $134.40 a barrel, down $2.28.  The US dollar firmed, up 10 basis points at 73.54.  Silver has felt the pressure of lower oil more than gold, although gold has also given back $4 of its gains.

There is a great deal of nervousness in the markets prompting safe haven demand for gold.  The situation in Nigeria where there was a threatened strike that may now be avoided, was offset by an attack on some oil installations and the threat that Nigerian rebels may start stopping oil tankers on the open seas.  The Dow Industrials are also quite weak, down 46 points at 11,982, which represents a significant breakdown below the 12,000 support level.  Moreover, worse than expected results in the financial sector have weighed on the dollar over the last couple of days and have given rise to safe haven demand for gold.

An interesting story on the Dow Jones New Wire indicates that China has become much more assertive when it comes to inflation.  They are concerned about the weak dollar and analysts believe if commodity and oil prices remain high, the U.S. is likely to find itself a more frequent subject of attack, along the lines that a relatively weaker dollar has been a major culprit in pushing prices higher.  That seems to be a key theme from the Chinese side at the talks in the U.S. this week.  Paulson is t rying to work a deal to expedite Chinese investment in U.S. Banks.

While everyone seems to believe a weak dollar is in no one's interest, the fact of the matter is the efforts to support the banking system naturally result in a weaker dollar.  Consequently, the policy makers are on the horns of a dilemma where tightening interest rates to support the dollar will be negative for the financial system and conversely providing ample money supply and low rates to help the financial system is not good for the dollar.  No one at this point knows how this will be resolved.  However, both long-term and short-term history suggests the dollar is in a declining state and cannot be rescued from the fundamental problems that it faces.  The dollar is in the process of being abandoned as the world's sole reserve currency.  That in and of itself will continue to push the dollar lower.  When you have a choice between rising inflation or increasing risks of depression the choice seems to be simple and straightforward.  You choose the path of least resistance, which is short-term inflation.

In the labor sector unemployment claims dropped by 5,000 however, overall unemployment levels remain at a level showing strains of a weak economy.  Some of the reduction in jobless claims was probably due to teenagers out of school obtaining low paying service industry jobs.

Yesterday the Royal Bank of Scotland came out with absolutely explosive news indicating they believe there is a potential for a stock market and credit market crash, within the next three months.  That was augmented by a report from Goldman Sachs saying banks face increasing problems from the credit markets and will need to raise at least $65 billion in new capital in the near term.  Over and above that, we had a report from the President of the Dallas Fed, Richard Fisher, pointing out that the fiscal problems of the U.S. Government are leading to problems that will be "unimaginably more devastating to our economic prosperity than the sub-prime debacle and the recent debauching of credit markets that we are now working so hard to correct."  Because of these many serious issues a prominent analyst and money manager is forecasting gold to sour to $5,000.  We are giving away a free copy of this Bloomberg report.

These are four different reports that every single American needs to read.  Most of this information is not available to working people.  However, it can significantly affect the decisions that you make with regard to your 401(k) investments, IRA investments, and personal investments.  Each individual has to decide the amount of exposure they want to have to falling stocks and stock mutual funds, the potential for bond and bond funds to fall as inflation rises, and the falling dollar.  When you become better informed, some may choose to protect themselves by diversifying into precious metal assets, which can benefit in this kind of an environment.  That is proven by the fact that gold has substantially outperformed almost all stock market indices.  Investors can choose to stay with assets that are losing money or move to assets that are in a bull market and making money.  However, you cannot make choices like that unless you are better informed. 

Secondly, even investors who choose not to invest in precious metals, will be helped by information in deciding whether to move out of riskier equity and bond type assets and into safer income producing assets such as treasury bills, treasury notes, CD's or money market funds.  Regardless, of your overall opinions I think this information is absolutely vital if you hope to financially survive the developing crisis we are in.  To receive these articles and other free information call Goldline today at 1-800-827-4653.  Goldline can also assist you in getting started with precious metal assets.  Call them today, 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 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 four articles on the dollar, the economy and gold call Goldline at 1-800-827-4653.  Goldline also provides several other helpful articles.  There are 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.}

Back to Daily Commentary