-- Posted Wednesday, 29 January 2003 | Digg This Article
April Gold: Close = $367.4, -$3.7
Recent patterns would dictate that with the dollar lower today, with equities struggling and with energies rallying, that gold would be higher. However, markets don't operate to please our notions of historical patterns or move how we feel they "should". The inverse correlation between gold and the US dollar does still exist, but it's not a perfect 1:1 ratio each and every day. Perhaps such a circumstance as today should not be questioned by gold bulls, but instead should be used as an opportunity to buy into the uptrend? After all, by the time you think you've realized the cause of the dip, gold is likely to be above water again.
Bush tightened the vice on Saddam, and his resolve to disarm him appears more resolute than ever. We’re told next week that Powell will submit evidence that ties Saddam to terrorism. The Iraq situation is certainly a wild card, it could end with a quick conflict, a drawn out conflict, Saddam in exile, Saddam dead, or perhaps something more ominous. Only time will tell, but it's fair to say that until the issue is resolved, the gold market will have legitimate cause to remain well supported and make a stab to $400.
The uptrend is still in place as prices remain buoyant over a floor of worry. 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, investors have thrown money at the gold market. As long as traditional “investments” remain out of favor, we’re going to see more and more money pour into gold.
As we’ve pointed out the last few sessions, technicals are a bit overbought so expect a corrective dip soon. There is also a bearish engulfing line candlestick that formed today. Aggressive traders might want to keep their buying shoes handy, as dips near $360 could be great opportunities. Hopefully you were able to take some profits over the last few days. 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 = 480.5, -7.0-cents
The technical action has been mostly choppy the last few days, mostly due to a lack of fresh internal fundamental news. The silver market continues to react to what gold is doing. Silver hit a 7-month high last week, and on the back of a spike above $370 in gold. The white metal came within shouting distance of the 500 barrier, but was held back by the struggling gold bulls. 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 Wednesday, 29 January 2003 | Digg This Article
