-- Posted Tuesday, 21 January 2003 | Digg This Article
April Gold: Close = $358.6, +$.80
From the outset it appeared as if gold bulls were going to get the short end of the stick this session as prices slumped by over $3. However, bulls fought gallantly late in the session and prices surged out of the red and into the black. What was responsible for the last minute bullish heroics?
The US dollar index dropped again today and is still hovering around three-year lows and looks poised to dip further. The stock market is floundering and sold off further late in the session. Energy markets were lower during most of today’s session but surged late to end above water. We’re still near highs not seen since 1997 and the trend remains up.
One thing is certain; Iraq remains in the limelight, tensions continue to escalate, and markets are reacting. This environment is ripe for gold to rally, and as we’ve seen it has done so by about $90 this year. It’s highly improbable the geopolitical fuel that is feeding the bullish gold cause will burn off anytime soon, and that should be enough to keep prices buoyant. The multitude of bullish variables supporting gold prices are not likely to make a one-eighty anytime soon, so expect gold to trudge higher. An article “Gold gain is imminent, forecaster says” by Thom Calandra of marketwatch.com references someone who feels we’ll approach $1,000 an ounce within a year or two.
“Cut to the chase: Turk (James Turk, Editor of Freemarket Gold & Money Report) sees gold, currently at $355 an ounce, rising to $366 by the end of January, which is just 10 days away. The price of the metal will reach $934 an ounce by February 2004, he says.”
But not everyone is so unabashedly bullish:
“Most of the professional analysts are in a tight range of $330 to $390 an ounce or so for 2003. None of the pros breathes a syllable of support for a 2003-2004 gold price that is substantially above $400.
Technical analysts are somewhat more convinced that gold will have a lasting benefit from economic turmoil, Middle East war and a declining dollar. Technical analyst Jordan Kotick at the investment bank JP Morgan Chase says gold could approach $430 per ounce in coming years. “
Regardless, 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.
The uptrend in this market cannot be dismissed, but silver still lags behind gold a bit in terms of flexing its muscle. Silver has lagged a bit behind gold mostly because it’s an industrial metal. 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 Tuesday, 21 January 2003 | Digg This Article
