|
April Gold: Close = $357.8, -$1.3
Bulls had a fairly good week, with their precious metal ending $2 higher from last, and in the process hitting a fresh contract high. As heated rhetoric out of Iraq and North Korea continually flowed this week, gold was predictably driven to another fresh contract high near $360, a level not seen since early 1997. Along with geopolitical strife, the US dollar index is near a three year low, the stock market is floundering, and energy prices are relentlessly moving higher and higher. Energy markets were also quite active during the week, and their strength may have somewhat spilled over into the precious metals. Gold bulls seem to have the luxury of having all their ducks lined up and they are reaping the rewards. The multitude of bullish variables supporting gold prices are not likely to make a one-eighty anytime soon, so expect gold to trudge higher. Gold bulls should consider using the inevitable dips as buying points. Overall, gold technicals and fundamentals indicate further buoyancy. In fact, corrective dips in the price of gold could be looked upon as buying opportunities. The geopolitical, financial and sentiment factors propelling the market higher are not going to evaporate anytime soon. The longer-term bullish scenario appears intact and it’s highly probable that $400 will be hit early this year. Be sure to watch TradeScope daily for order adjustments. Remember, futures and options offer much flexibility as one can just as easily be short or long any market. Each contract/option = 100 ounces, a $1 move in a futures contract = $100. Contact me anytime to discuss strategies to fit your needs. To open an account and receive trading recommendations on gold futures or options contracts (also stock indices, energies, currencies, etc.), or to use PaperTrader Online contact me at erik@altavest.com. Visit www.altavest.com to request a Free Starter Kit. Keep in mind that there is risk of loss in all trading. March Silver: Close = 481, -2.1-cents The uptrend in this market cannot be dismissed, but silver still lags behind gold a bit in terms of flexing its muscle. A recent Barron’s Online article “Silver Duller” by Gavin Maguire makes the point that silver has lagged a bit behind gold mostly because it’s an industrial metal.
“At this point, silver's identity crisis is at the fore. Is it going to continue climbing with gold to the levels seen last summer and beyond, or will it remain tarnished by economic anemia and lumped with copper and other sluggish industrial metals?
Jim Steel, director of research at futures brokers Refco LLC, argues that the answer lies somewhere in between.
"Silver's recent strength is, of course, to some degree a matter of catching up with gold, but there are also independent reasons for moving higher" suggesting prices could continue climbing in the months ahead.
"Global inventories have been drawn down steadily over recent years and demand has exceeded mine supply for even longer," he says, adding that, any increase in industrial demand will probably lift prices as well, though at the moment there's no clear sign of any real pick-up in that demand.
As a result, Steel says silver will likely struggle to move decisively higher over the short term, and he expects the $5-per-ounce area to offer stern resistance in coming weeks.”
Last week we came within 5-cents of the $5.00 mark and we’re still anticipating a run to the 500 area soon. We’ve pulled back about 20-cents from highs and prices have formed a bull flag. Always maintain your perspective by keeping an eye on daily, weekly and monthly charts as opposed to intra-day charts. Each contract/option = 5,000 ounces, a 1-cent move in a futures contract = $50. Contact me anytime to discuss strategies to fit your needs.
To open an account and receive trading recommendations on silver futures or options contracts (also stock indices, energies, currencies, etc.), or to use PaperTrader Online contact me at erik@altavest.com. Visit www.altavest.com to request a Free Starter Kit. Keep in mind that there is risk of loss in all trading.
-- Posted Friday, January 17 2003
Previous Articles by Erik Gebhard
|
Gold & Silver Review of 1/17/03
