GOLD EXTENDS LOSSES

by Goldline.com | July 27, 2010

Gold prices are consolidating on the New York Spot Market as of 1:16 p.m. EST. Despite a weak consumer confidence index report, which could generally be bullish for gold, investor risk appetite appears to be on the upswing.

Stocks are treading water on the New York Stock Exchange as the decline in consumer confidence offset positive earnings data and Monday’s better-than-expected housing report. Consumer confidence fell to 50.4 in July from an upwardly revised 54.3 in June. "The consumer confidence index was below expectations but not surprising," said David Chalupnik head of equities at First American Funds. "We had a down market in May, June and early July and that weighs on consumer spending and confidence."
(CNN Money, 7/27/10)

Concerns about near-term deflation are long-term bullish for gold according to Peter Cooper of Arabian Money. Mr. Cooper feels the government’s response to our current financial crisis closely mimics the actions and policies seen in the 1970’s, which ultimately led to record highs in the price of gold. “It took time in the 70s too for inflation to gather speed, and we saw a big deflation of house prices in 74-75,” said Cooper. “It is no different this time. However, by 1977-8 inflation was picking up speed and it topped out in 1980 with gold at $800 an ounce – eight times higher than its correction in 1975. Adjusted for inflation then that would put gold at $5,000 an ounce by 2013.”
(Goldseek, 7/27/10)

† This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. You should review Goldline's Account and Storage Agreement along with our risk disclosure booklet, Coin Facts for Investors and Collectors to Consider ®, prior to making your purchase. Goldline's spread, which is the difference between the price we sell our products and the price we buy them back, generally ranges between 5% to 20% on our most common bullion products and 30% to 35% on all other products including our popular European francs, proof coins, silver dollars and half-dollars, and graded coins. The market must go up enough to overcome this spread before an actual profit is achieved. Precious metals and rare coins can increase or decrease in value. Past performance does not guarantee future results. Coins are a long-term, three- to five-year, preferably five- to ten-year investment. We believe precious metals are suitable for 5% to 20% of the average investment portfolio though others may recommend a different percentage. To receive free information package on gold and precious metals investing, call Goldline at 1-877-341-2646.
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