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-- Posted Friday, 24 January 2003 | Digg This Article
April Gold: Close = $369.5, +$3.7
With enthusiasm, the gold market charged to end the week over $12 higher from where it began and hit a new 6-year high. The dollar index was hammered once again and the Dow was off almost 250 points when gold closed. Obviously this had a lot to do with why gold hit another contract high today. Next week there are a slough of potentially volatile events to keep your eyes on: The U.N. deadline to review the Iraqi arms inspections, the State of the Union address from Bush, an FOMC meeting, and who knows what other surprises may be in the pipeline. President Bush continues to hold firm in his resolve to disarm Saddam as per the original cease-fire resolutions while Germany, France and China decide to bypass the whole ordeal. There seems to be no stopping this bullish party, and who can blame bulls for bidding up prices. 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. With mainstream investments such as equities and bonds out of favor, gold is sopping up the gravy. Many investors feel comfortable with the notion of buying gold as they contend they "understand" something tangible. To many, gold also has an alluring mystique and carries with it an aura of safety.
Technicals are a bit overbought and in most circumstances the odds would favor a corrective dip soon. Besides, traders should never get too cocky or confident but instead should have contingency plans. If you have tons of profit, peel some positions off and protect what remains. Keep in mind there is nothing that says gold can’t open $20 lower on any given day! Having said that, 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 = 488.5, +10.0-cents After the head fake yesterday, the bulls came back with a vengeance and prices hit a fresh 7-month high. 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. The bearish engulfing line candlestick that formed yesterday was steamrolled today as the bulls snatched back the reigns. We’re still anticipating a run to the 500 area soon. 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, 24 January 2003 | Digg This Article
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