Daily Commentary

Markets Consolidate

by Joe Battaglia
Posted: October 9, 2008

Gold and silver are lower on some profit taking after more steadiness in the banking sector.  There is some perception that perhaps some of the actions being taken by the central banks will serve to mitigate the financial crisis.  It is probably too early to have that sentiment, but the equity market was overdue for a rally and the sellers needed to pause for a breath.  Similarly, gold has advanced aggressively and likewise was due for some profit taking and consolidation.  Gold is currently trading down $20 and silver is down $.06.  The equity market is higher with the Dow up 53 at 9,311.  The U.S. dollar has come back, up 9 basis points at 81.  Oil has again been fairly volatile and it is currently down $.15 at $88.79 a barrel.

 

The meeting of the IMF that just concluded indicated that in the view of the IMF, the bank crisis is even worse than they had forecast previously.  They expect the world will experience a significant recession for the next twelve to eighteen months.  Moreover, they say the problems in the financial sector are likely to worsen unless there is some global coordinated action taken to alleviate the seizure of the credit markets. 

 

With regard to the correction in the gold market, analysts commented that the market is thinly traded today.  Today is the Yom Kippur Jewish holiday and there are fewer people trading than would normally be the case in the New York markets.  Some analysts say people are looking at taking profits, where they have them, and stocking up some cash with the expectation that they may need that cash down the road for margin calls.  Most of that activity is by the "hot money" or "day traders" who are moving in and out of markets at a moments notice. 

 

Those who have acquired gold and silver as a safe haven asset and as a way of protecting and preserving wealth over the longer-term are simply holding onto their positions.  They are not influenced at all by today's correction other than seeing it as a buying opportunity.  When we look at the benefits of gold, I think most people come to the conclusion that it makes sense to have some gold as a safe, steady, secure asset that will always be there no matter what the emergency might be.  Therefore, those who have not acquired gold yet should be moving into the market as quickly as possible.  We are seeing that reflected in some of the gold ETF's, where week after week they set new record highs.  Even when there are corrections, the amount of gold held by these institutions does not seem to decline.

 

Analyst John Meyer told Dow Jones Wire Service that investor demand for gold and slow central bank sales should push gold through $1,000 an ounce this year.  Other analysts turn to the dollar and said once the credit markets are unclogged, the dollar is likely to resume its downtrend over the long term.  Another analyst, Ashraf Laidi, who is the chief strategist for CMC Markets said he expects gold to move up to $1,100 an ounce before year end.   As we know, Citibank has forecast that gold will rise above $1,000 over the coming year and that if the credit crisis continues it may rise to many multiples of that.  And today Barclays said gold could surpass $1,000 this year.

 

Goldline is providing quotes from Citibank in the free information package.  Investors should call Goldline and ask for the free information package so you can understand the many reasons why gold and silver are likely to continue moving upward.  There are also articles in the free information package that discuss the credit crisis.  Last Sunday, 60 Minutes did an excellent presentation on the real problem facing the financial markets the Credit Default Swaps (CDS).  They explained the CDS problem and confirmed, as I have been saying, it is at the heart of the financial crisis.  To understand the issues, you may wish to go online or obtain a copy of last Sunday's report.  Investors need more information in the current environment.  Being informed is the best way to be protected and successful.  Along those lines everyone who calls Goldline for the first time for a free information package, can receive a free copy of the American Advisor Newsletter, which has an annual subscription rate of $99.  If you are a client of Goldline or have obtained information before, be sure to call and ask how you can obtain a free one-year subscription to the Newsletter.  Call Goldline at 1-800-827-4653 to find out more details. 

 

Ask also how you can take advantage of the Price Guarantee Program and perhaps obtain some gold coins for free in conjunction with a transaction.  Call Goldline now 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 $6,000 of private gold, you will receive a free gold coin.  Investors may wish to consider a tube of these coins to obtain two free 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.  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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