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-- Posted Monday, 27 January 2003 | Digg This Article
April Gold: Close = $370.5, +$1.0
Equities and the dollar nervously slid lower in anticipation of Blix's report, and conversely gold put in its third consecutive contract high. It appears there weren't any dramatic revelations from Blix and that the energy markets anticipated a neutral report, with crude slipping over 50-cents. On a lack of compelling fresh news during the day, gold gave back much of the earlier gains but still held above the “floor of worry.” Gold could remain quiet until it absorbs the State of the Union address.
With the ongoing war on terrorism, with the inevitability of a Middle East conflict erupting, with domestic economic conditions stagnant at best, with little room left for the Fed to lower rates, with energy prices hovering near contract highs, and with the US dollar near three-year lows, it's clear why gold has rallied about $100 in just over a year. With mainstream investments such as equities and bonds out of favor, gold is sopping up the gravy. In fact, Kevin Morrison in a recent Financial Times article “Hedge funds turn from shares to commodities” talks about how gold, and commodities in general have gained in popularity:
“Hedge fund managers have been switching from falling equity markets and taking a fresh look at commodities, pushing gold, platinum and nickel prices to highs not seen for years.
Hugh Hendry, fund manager at London-based Odey Asset Mangement, said central banks have contributed to the increasing interest in commodities. "They are able to print money to keep the economy going and that money always finds its way to the fastest rising asset class," he said. "In the 1990s that was Nasdaq and now it looks like commodities."
Metals are not the only class of commodities to benefit. Products such as cocoa, wool, soybeans, palm oil, wheat and corn have risen by between 13 per cent and almost 60 per cent since the start of last year.
This and stronger metal prices have helped push the Commodity Research Bureau index, a global basket of commodity prices, up more than 30 per cent since the end of 2001.”
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. 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 in the next month or two. 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 = 483.5, -5.0-cents After hitting a fresh 7-month high last week, silver bulls took a respite from the action and allowed bears to press prices lower. Yes, as with gold, silver was also higher intra-day, but it soon became bored without dramatic developments to feed upon. The market remains in an uptrend but still lags behind gold a bit in terms of flexing its muscle, mostly because it’s an industrial metal. 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 Monday, 27 January 2003 | Digg This Article
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