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-- Posted Tuesday, 28 January 2003 | Digg This Article
April Gold: Close = $371.1, +$.60
The White House is suggesting that hard evidence against Iraq will not be revealed during the State of the Union address, but perhaps next week. Gold bugs appeared disappointed as the yellow metal vacillated sluggishly in negative territory most of the session, but gold did clamor back into the black by the close.
It seems gold investors will need fresh ingredients to spice up the market, but the uptrend is still in place as prices remain buoyant over a floor of worry. What’s there to worry about? Well, how about an ongoing war on terrorism, the inevitability of a Middle East conflict, stale domestic economic conditions, energy prices hovering near contract highs, and 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.”
Perhaps a rest for the bulls will be healthy for prices in the longer run. Technicals are a bit overbought and in most circumstances the odds would favor a corrective dip soon. Aggressive traders might want to keep their buying shoes handy as dips of $10 or so could be great opportunities. 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 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 = 487.5, +4.0-cents It hasn’t been quite as exciting as gold, but we did just hit a 7-month high last week and prices did approach the 500 barrier. The market remains tied to gold in many ways and is in an uptrend, but still lags behind gold 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 Tuesday, 28 January 2003 | Digg This Article
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