-- Posted Thursday, 20 February 2003 | Digg This Article
April Gold: Close = $353.1, +$3.1
Getting a boost from uninspiring economic data, gold found support as the US dollar and equity markets hit the skids. Regarding today’s economic data, the Wall St. Journal Reported:
“The Labor Department announced that producer prices rose 1.6% in January,
their biggest increase in 13 years and much higher than the 0.5% increase
economists had expected. Core producer prices, which exclude the more volatile food and energy components, rose 0.9%, the biggest increase in four years, suggesting that the soft economic recovery hasn't quite banished the risk of inflation. Economists had expected an increase of 0.2%.
Separately, the Labor Department said the number of people filing initial
claims for unemployment insurance surged to a seven-week high of 402,000 last
week, up 21,000, after a decline of 18,000 a week earlier. Economists had
expected a more moderate increase of 6,000 claims.
The Commerce Department, meanwhile, reported that the U.S.'s trade deficit
reached another monthly record in December, coming in at $44.24 billion,
compared to November's $40 billion. The November figure was revised down
slightly from an earlier report of $40.10 billion. Economists had forecast a
deficit of $38.5 billion for December. Exports fell by $2.13 billion, or 2.6%,
and imports rose by $2.11 billion, or 1.7%.
With so much poor economic news to digest, the Euro pounded the dollar once again and stocks reeled in pain. Upon further equity and dollar weakness it may be that gold could end up as one of a few alternate viable investment ideas in the spotlight. It’s also interesting to note that our rhetorical musings about personal incomes not likely keeping up with the double-digit gains in home values were somewhat substantiated by the fact that unemployment claims hit a 7-week high. How and who continue to press home values through the roof? Yes, rates are low, but one still needs a well paying job to meet those fat mortgage payments. Anyway, just an interesting side note.
Bears dominated energies today, but prices still remain near two-year highs, and unleaded prices are now near 19-month highs. One has to wonder how much more prices can move up before economic growth is truly stifled by the higher costs of this energy “tax.” The anticipation of war has built in a war premium to energy prices. The question is how much more premium remains and if a conflict does arise, will supplies actually be interrupted. If energies find good cause to remain buoyant, gold too will likely remain well supported.
The discord between the US and Turkey persists, with Turkey wanting more aid in return for use of their land. The momentum towards disarming Iraq has apparently stalled a bit, and some are now targeting mid March as the earliest date for an attempt to forcibly remove and/or disarm Saddam. However, dark clouds still loom over the Iraq situation, likely keeping gold nervously supported. Look for the $400 area as a target. RSI levels are no longer overbought. Meanwhile, thank goodness we have those gold puts as a hedge to our futures contracts. Be sure to watch TradeScope daily, and remember, futures and options offer 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.
May Silver: Close = $467.2, +3.7-cents
Silver has trailed gold but relationships between markets aren’t always perfect correlated. Overall however, with few fresh internal fundamentals surfacing to press the silver market one way or another, silver is finding direction from gold. The dip in gold that we expected was deeper than we thought, but such was also the case in gold. The dip in both metals seems to have attracted buyers. Also notice the bullish engulfing line candlestick from a couple of sessions back. Indicators such as slow stochastics are in oversold territory and have now turned higher. 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, 20 February 2003 | Digg This Article
