American Bullion -- Pullbacks In Gold Price Are Buying Opportunities

Monday, July 12, 2010 at 04:37am

July 12, 2010, Los Angeles – The price of Gold ended last week on the plus side after erasing a mid week loss of over 2 per cent. Investors used the most recent pullback as an opportunity to add to their Gold and Silver holdings.

Gold has gained 8.3 per cent in 2010. Gold bullion has lead advances in precious metals as investors have sought a safe haven for their assets. Jim Rogers, chairman of Rogers Holdings predicted last week that Gold prices will rise to more than $2,000 per ounce, but gave no timeframe for the advance.

The European Central Bank decided to leave interest rates unchanged at 1 per cent when policy makers met last Thursday. The euro currency advanced to an eight week high against the dollar as European Central Bank President Jean Claude Trichet said the economic recovery is beginning to gather momentum. Since the beginning of December the euro has lost 16 per cent against the dollar due to investor concerns that Europe’s sovereign debt crisis could derail the economic recovery.

Trichet said the ECB was expecting a moderate but uneven recovery after interest rates were held at their record low rate. Shaun Osborne, chief currency strategist at Toronto Dominion Bank said, “Trichet was quite upbeat in his comments this week, which gave the euro a little more support.”

A media report released on Saturday reported that the German government is working on an insolvency plan for bankrupt euro zone states, in an effort to shift a share of the burden of the debt rescue of governments from taxpayers to investors.

The proposal, prepared by Germany's finance and justice ministries, was prompted by Greece's well publicized debt problems. Holders of sovereign bonds, while taking a so-called haircut, would agree to longer repayment terms, lower interest payments, or they could receive less than the original value of the bonds as an incentive for taking part in the debt restructuring.

The U.S. Treasury report stopped short of branding China a currency manipulator on Thursday and said instead that the yuan “remains undervalued” after China ended its two year peg to the U.S. dollar on June 19.

“China’s trade number was pretty positive and there might be a bit of pressure from Washington for the yuan to appreciate at a faster pace,” said Brian Jackson, an emerging markets strategist at Royal Bank of Canada in Hong Kong.

"The administration is correct in calling the renminbi undervalued," said Leo W. Gerard, international president of the United Steelworkers (USW) union. "The next crucial step is to do something about it," he added.

According to a leading economist, more than half of America’s current money supply has been created in just four years. This fact is leading Gold bugs to argue that even the slightest pullback in Gold bullion prices represents a buying opportunity. Buy Gold and Silver today and protect you wealth.