Daily Commentary

Oil Has Biggest Drop In History

Gold and silver are mixed in the first half-hour after the open.  Gold started higher, then began to ease back currently trading down $3.  Silver is remaining in positive territory up $.06.  Yesterday, oil had the biggest drop in history, at one point dropping as much as $10.  This morning it has continued to move lower, even though inflation is rising pretty aggressively. 

The June consumer price index is the second highest rise since 1982.  It jumped 1.1%, which would annualize out to 13.2%.  Year on year the CPI is up 5%.  Inflation in Europe is also very high coming in around 5%.  This raises the question as to whether the Fed will be forced to raise interest rates in an effort to choke off inflation.  However, Fed Chairman Bernanke's comments yesterday indicated that while inflation would be rising, that it is a temporary situation and will ultimately moderate.  That was an indicator that they are probably going to leave interest rates on hold because they are more worried about the banking system than they are about inflation.  In short, the Fed has no good choices. 

After a big drop yesterday, oil continues to move lower, down $1.12 at $137.62 a barrel.  Equities have rebounded with the Dow up 65 points on the basis of a number of financial stocks that showed better than expected earnings.  Some of the financial stocks and banks showed some improvement this morning.  However, their problems are deep and severe.  I would expect they will have continuing problems going forward.  The SEC has taken action to curb short selling on financial stocks.  This indicates severe concern.  UBS Bank's analyst John Reade says he sees gold at $1,000 within a month and $1,050 within three months.  A number of analysts think gold can go even higher than that by year-end.  These banks are very conservative.  Reade says that gold is attracting buying from investors who are looking to protect themselves from systemic financial risk. 

It is interesting that gold and silver are showing such excellent strength as industrial commodities and agriculture commodities are down this morning.  In fact, yesterday's performance in the gold market was spectacular.  Given the fact that oil fell as much as it did and the dollar was reasonably steady, one would have thought gold would have been down yesterday, but in fact it was up $5 at the close.  This is an exceptionally strong gold market that is pointing to much higher levels ahead.  With consumer price inflation running at 5% year over year, gold should be well supported and see excellent demand from those looking for not only a hedge against inflation, but also an asset that can protect purchasing power and provide a safe haven from the financial and geopolitical crises that confront us today. 

Investors should acquire gold and silver today at bargain basement prices.  Call Goldline and have them assist you in getting started.  Ask them about the Price Guarantee Program and be sure you ask for the free information package, which contains several articles from major banks warning of a potential stock market crash directly ahead.  Read this information carefully.  It may provide you with a great deal of assistance and benefit in determining your investing decisions.  Call Goldline 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 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 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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