Powell’s convincing presentation to the U.N. is behind us, and now that all those who will never be convinced of the need to disarm Iraq are stewing on even higher heat, the gold market has found cause to take a breather.Many long positions have climbed into this market over the last few weeks, and plenty of air has escaped from the sails of the good ship “Gold Bull” in the last couple of sessions.The damning evidence Powell unleashed had obviously been discounted somewhat by the gold market over the last couple of weeks, leaving a situation ripe for some profit-taking going.However, the tension regarding the Middle East continues on the forefront of investor’s minds and will likely offer a floor or support.
The dollar and stocks continue to flounder in such an uncertain environment.Energy markets remain on high alert as well, with heating oil up over 300 points today.Over the year however, gold has attracted newfound attention and will likely continue so.
For instance, there is a Reuters article, “FUND VIEW-Gold, oil stocks still undervalued, says JPMF”, by Justine Trueman, that has some interesting comments…here are a few excerpts: "It's only over the past few weeks that people have begun to pay attention to the fact that this area is doing very well," Ian Henderson, manager of the 34.1 million pounds ($56.4 million) JPMF Natural Resources Fund, told Reuters.
"We're so far away from (the end of the run in gold prices). I can find companies on PEs (price to earnings multiples) of four times in the mining sector. As long as I can find these companies hopelessly undervalued, (prices) will keep going up," he said.
Henderson, who has been investing in commodities for JPMF -- which has about $500 billion of assets under management worldwide -- for the past 10 years, believes gold has broken firmly out of a bear market range and could rise further.
"People had become very set in their opinions and it takes a long time for them to change their minds. That is the plus as far as I'm concerned, that people haven't recognised that this has been a bull market and therein lies the opportunity," he said.
On that same bullish note, there is another terrific article in Forbes, “Gold Bugs Look to History” by Robert Lenzner, in which a comparison with gold and equity prices are evaluated:(If you’d like the full copy of these articles let me know)…
“Christopher Wood, emerging markets analyst for CLSA, a unit of Credit Lyonnais, who supplied us with the numbers, believes strongly that "gold is at the very beginning of a multiyear bull market that will take the yellow metal many times higher than its present level." The reason Wood gives: "Gold is the only real hedge against the massive financial excesses that still prevail in the western world." To many, gold remains one of the few viable investment alternatives.Until the war on terror and the issue with Iraq quiets down a bit, it’s not likely consumer confidence will strengthen enough to breathe new life to stocks.We’ve been looking at the $400 area as a target, and we’re still anticipating such a thing by the end of the month.Perhaps one should look for pullbacks of $10 or so as buying opportunities, and after today we’re about ready to consider buying again.Be sure to watch TradeScope daily for order adjustments on those April calls that have appreciated tremendously.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.
Gold sold off and dragged silver down.There has been a lack of fresh internal fundamental news for some time; action has been led by gold.After another $5 to $10 dip in gold, I’d still anticipate the uptrend in gold will persist and carry silver to the 500 area, but there is a bearish seasonal around the corner wherein from approximately 2/5 to 2/25 silver has fallen an average of about 18 cents.Should we look to buy pullbacks, just as with gold, maybe buying shoes could be laced up in the mid 450 area?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, 6 February 2003 | Digg This Article
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