Inflationary Pressure Driving Investors to the Safe Haven of Gold - Is $5,000 Gold Ahead?
by Joe Battaglia
Posted: June 20, 2008
OPEC is meeting
this weekend ostensibly to discuss ways they can take action to relieve oil
prices. However, there seems to be a
great deal of opposition to that and oil is not reacting in a way that would
indicate positive developments. Oil is
up over $3 this morning in active dealings.
Gold rose to a high of $910.10 on the key futures contract but has since
pulled back $4, but remains up $1.80 in early trading. Silver has been volatile as well, reaching a
high of $17.65 before pulling back to $17.45 in the futures market, down about
$.01. Oil is trading up $3.76 at
$135.69 a barrel, after reaching a high of $136.08. Equities are under pressure as the banks and financials continue
to experience problems. Home
foreclosures are rising at an unprecedented rate; defaults and other forms of
loans such as auto, home equity loans, and others are on the increase as
well. This is a global problem, not
just a domestic one. In addition the
U.S. dollar is down 43 basis points at 73.06.
The Dow is trading down 153 points.
RBS warns of a potential for stock and financials to "crash".
Analysts are
reporting that gold seemed to experience significant volatility overnight, but
are seeing support from oil and the currency market, with the euro
stronger. Commerzbank says: "Mounting
inflationary pressure is driving many investors around the globe to the safe
haven of gold. As a traditional
asset it generally retains its value even in an inflationary environment."
(Emphasis added)
In addition there
is a report that suggests that the Nigerian Government is considering putting
its extensive foreign currency reserves into gold and other metals to avoid
further dollar losses according to the Dow Wire Service and UBS bank. More and more developing countries are
moving their reserves to gold because they cannot afford the losses being
suffered by the falling dollar.
The conditions that
prevail today suggest a more significant move to the upside for precious metal
assets. Gold needs to move above $910
in the spot market in order to confirm that a move back into the $935 to $950
trading range is ahead. This looks
likely. China's 17% increase in energy
prices, which caused a correction in oil yesterday, is unlikely to curb demand
ahead of the Olympics in August.
Moreover, the population is likely to be able to absorb those increases
with little difficulty. One thing those
energy hikes will do is to increase the demand for gold as an inflation hedge
in China.
In summary, the
outlook looks positive for gold.
Remember, Royal Bank of Scotland is warning of a potential stock and
financial market crash within the next three months. The President of the Dallas Fed, Mr. Fisher is also forecasting
severe financial problems ahead for our country. In addition, Bloomberg Wire Service has just published an article
forecasting that gold may rise to $5,000 an ounce. That is a forecast by one of the largest money management firms
in the world. This firm oversees $277
billion of assets globally.
You can receive all
of these special reports and special information by calling Goldline today at,
1-800-827-4653. It is also a perfect
time for you to get started with gold and silver. Ask Goldline about the Price Guarantee Program and about the
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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 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.
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