Technical Correction Pushes Metals Lower
by Joe Battaglia
Posted: June 23, 2008
Gold and silver both sold off prior to the open as the dollar strengthened and oil fell. The dollar is up 53 basis points at $73.56. However, more than the dollar index, much of the gold trading was related to the decline of the Euro. Economic statistics out of Europe indicated that Germany's economy is slowing rapidly. This suggested that the ECB might not raise interest rates. Also, I think Ireland's rejection of a European parliament seemed also to have an impact on the Euro. Some are concerned that the Euro may not be able to survive unless the Europeans can develop a centralized government.
The combination of the strengthening dollar and weaker Euro put a lot of pressure on the gold market with gold trading down nearly $20 and silver down $.65. After about 30 minutes of trading, oil started to rebound from a loss. The loss was initially the result of Saudi Arabia agreeing to provide an additional 200,000 barrels a day of oil to the market. Many believe that will not be light sweet crude, but rather sour crude. The increase is about equal to the decline in supply from Nigeria. Therefore, there would be no net increase in the oil supplies. As the market truly digested this news, oil began to rally and is currently trading up $.85 at $136.21 a barrel. It has been as high as $137.50 this morning.
Equities are softer. In the precious metals sector I believe we may also be seeing some central bank gold sales in an effort to push gold down to diffuse inflationary worries. With lower gold the central banks will not have as much problem in holding interest rates steady. There has also been heavy hedge fund liquidation perhaps tied to the trading of currencies or perhaps the result of the need to raise cash as other types of assets are continuing to experience severe pressure. This is particularly true for credit derivative assets. There may also be some concern that gold failed to push above the $909 resistance level causing some technical traders to begin pushing the market down and then allowing that to accelerate. One other factor is that The Fed meets this week. There are still some concerns that The Fed may raise rates or indicate a tightening bias. As I've said many times, I do not believe that The Fed will risk jeopardizing the banking system to tighten interest rates and money supply.
Consequently, taking all of these factors into consideration, I view the correction that we're seeing today as a technical correction based upon dollar strength. As I've said many times, I believe that corrections such as we're seeing today create buying opportunities that investors should capitalize on. Take advantage of the correction to add gold and silver to your holdings or to initiate your first trade. Get started today by calling Goldline at 800-827-4653. Also you want to be sure to ask for the free information package. The article quoting Royal Bank of Scotland forecasting a stock market crash is a must read, along with Goldman-Sachs similar comments with regard to issues in the financial system. On top of that we are providing the free article from Bloomberg quoting Schroeder Investment forecasting that gold may rise to $5000 an ounce. This is a great opportunity to acquire some gold or silver at bargain basement prices.
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 special offers that may enable you to get free gold or silver coins.
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
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