Investors Should Accumulate Gold On The Dip
by Joe Battaglia
Posted: July 8, 2008
Gold and silver are
both down but off the lows in the first half-hour of trading. The metals are reacting to two key factors.
1.
The sharp drop in oil prices, down $3.55 to $137.83. Some question whether the bull market in oil
and other commodities has ended. That
is highly unlikely. However, all
markets go through periods of rally and correction. If you look at the technical aspects of the oil market and other
commodities, they still remain in a very bullish mode. Moreover, they continue to hold within a
well-defined trading range indicating that they are simply working off
overbought conditions.
2.
The dollar strengthened again today, up 25 basis points at
72.92. The dollar strengthening as Fed
Chairman Bernanke said the Fed will extend its lending facilities to brokerage
firms into 2009. This indicates that
the Fed is going to continue to be extremely accommodative in trying to help
the banks to work out their severe problems.
The fact that the Fed is willing to go to such extraordinary lengths as
to make lending facilities available to brokerage firms for a such a lengthily
period of time suggests that the crisis is far from over.
Ted Forstmann told the
Wall Street Journal that we are in only the second inning of this credit
crisis. Moreover, the Fed is able to
read the technical indicators in the equity markets and they read the
commentary in the financial publications.
As Barron's Magazine reports, the equity market has given what is
referred to as a "Hindenburg Omen" which is a particularly good signal of a
market crash dead ahead. That signal
coincides with the warnings by Royal Bank of Scotland, Barclay's, Fortis, BIS,
IMF and others that the equity market is on the verge of breaking down
dramatically.
Yesterday,
a bank analyst reported that Fannie Mae and Freddie Mac would need to raise $75
billion to meet their capital requirements, when they are required to use the
new Federal accounting standards. At
this point, the politicians and the Fed are trying to secure an exemption from
those standards for these two lenders.
However, this information reveals that they are in very serious
financial condition themselves. This is
really not a secret. However, it is now
being once again brought into the spotlight.
Remember these are the institutions that your Congress is hoping will be
able to bailout the banks. I think this
mess can only get worse. In this very
troubled environment, I cannot help but believe that safe haven demand for gold
will continue to increase. Mean while,
there are also significant inflationary pressures in the economy both
domestically and globally. Perhaps the
greatest inflation pressures come from developing nations. Bernanke yesterday, urged them to cut off
their growth by dramatically increasing interest rates to stop the inflation
pressures in their economies. It is
unlikely they will be willing to take this pain to help out the U.S. Central
Bank.
Barron's published an
article listing twenty-five reasons to be very cautious about equities. We have included a free copy in the
information package. They are warning
again that there could be a dramatic drop in equities dead ahead. All of these indicators gave the Fed a good
reason to take extraordinary action.
However, never before has the Fed "pre-announced" that it would lend
money to non-banks. This is an
extraordinary measure and is indicative of an enormous problem with financials.
Given all of these
factors it is my belief that gold presents an excellent buying opportunity at
these levels. Investors should
accumulate gold on this dip. Clearly,
looking at the trading action the Dow Jones Wire Service observes there is a
big buyer of gold on these dips. You
too should be a buyer taking advantage of the correction. Call Goldline today to get started at
1-800-827-4653. Be sure you ask for the
free information package, which includes the articles from Royal Bank of
Scotland and others warning of a stock market crash, along with the information
from Merrill Lynch, Citibank and others forecasting gold to rise to $1,000 an
ounce this year and perhaps to triple in price over the next three years. Call now to receive this information at
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 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 Client Account Agreement, a company
brochure and a Coin Facts Risk Disclosure Booklet, read these 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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