-- Posted Thursday, 23 January 2003 | Digg This Article
April Gold: Close = $365.8, +$4.8
Up, up, up and away it goes! Gold gapped open and spiked to another fresh contract high, a level not seen on the weekly charts since early 1997! We’re mulling about near 6-year highs, and buoyancy in the yellow metal appears not to have waned.
The political and economic landscape is providing ammunition for gold bugs. With the ongoing war on terrorism, with the inevitability of a Middle East conflict erupting soon, with domestic economic conditions stagnant at best, with little room left for the Fed to lower rates in an attempt to stimulate the economy, with energy prices hitting contract highs, and with the US dollar near 3-year lows, it's clear why gold has rallied about $100 in just over a year. It's doubtful that any of the above variables will shift 180 degrees soon, so overall, gold should continue to shine brightly for bulls. A peek above $400 within the next month or two is highly likely.
Gold seems to rise to prominence when more mainstream and traditional investments such as equities and bonds fall out of favor. Right or wrong, gold bugs claim they "understand" gold and develop an attachment to something tangible. To many, gold also has an alluring mystique and carries with it an aura of safety.
France and Germany are now stating that they won’t force Iraq to comply with the 12-year-old U.N. cease-fire resolution. Rumsfeld commented that “old Europe” isn’t necessarily the nucleus of that region anymore, and this really setoff the French. China also sided with France and Germany (strange bedfellows?) in expressing their plans to remain on the bench if a military conflict arises in Iraq. All the while, President Bush continues to hold firm in his resolve to disarm Saddam as per the original cease-fire resolutions. This multi-country bickering sure makes markets nervous, and if you’ve been a gold bug and have had your money where your mouth was over the last year, you should be grinning from ear to ear!
Technicals and fundamentals indicate further buoyancy. Yes, technicals are a bit overbought and prices are due for a corrective dip, but dips could be viewed as buying opportunities. The geopolitical, financial and sentiment factors propelling the market higher will be with us awhile. 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 = 478.5, -6.3-cents
All the glory for metals bulls was to be found in the gold pits, not silver. Lately, silver has tagged along behind gold, but bears asserted themselves and took charge today. Or, perhaps with so much attention on gold, silver was neglected and was therefore easily coaxed lower? Silver remains in an uptrend but still lags behind gold a bit in terms of flexing its muscle, mostly because it’s an industrial metal. Prices also formed a bearish engulfing line candlestick. We’re still anticipating a run to the 500 area soon, but today’s action may have delayed that a bit. 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 Thursday, 23 January 2003 | Digg This Article
