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-- Posted Wednesday, 5 March 2003 | Digg This Article
April Gold: Close = $353.2, -$.10
Gold found reason to bask in positive territory during most of the day, perhaps due to the terrorist bombings in the Philippines, Israel and Colombia. Also, with the US dollar down almost as much as a cent earlier in the session, and with stocks slumping, gold investors had added cause to bid the yellow metal higher early in the session. Apparently however, gold has seen such chaotic influence before, and by the close gold was indifferent. It seems gold investors will need more to feed on in order to coax the metal through the roof. Also, usually volatile markets such as crude, stocks, and the precious metals became a bit tepid as the session wore on. Perhaps the real possibility of the UN not passing another resolution wore a bit heavy on these markets. Powell stated that regardless of a few recent concessions by Iraq, they are not disarming, but instead deceiving and remain in material breach of U.N. resolutions. Regardless of a U.N. vote, a clash of heads seems all but certain with Saddam. In spite of occasional setbacks, it’s likely gold will remain well supported with so much turmoil as a backdrop. The rumors that Warren Buffett has been buying gold did not find their target today, and gold ended in lackluster fashion. Mr. Buffett didn’t even mention gold in his annual letter to shareholders of Berkshire Hathaway, but people are apparently reading into it whatever fits their agenda. He did say however, that he predicts some woe filled times for worldwide economies. With so much bad press regarding equities and traditional investments, perhaps gold will garner even more favor from investors looking for alternatives. With the economy and stocks floundering, with higher energy prices bound to strangle growth, where are investors to stash their wealth? As equities have plummeted gold has garnered newfound attention as evidenced by the run to the $390 area. Will gold finally become a popular financial alternative among retail speculators and investors? Gold prices do appear to have recently found a floor in the $345 to $355 region, and any unexpected events are likely to drive prices higher, not lower. But if tensions with Iraq and North Korea temporarily abate, and if terrorist attacks remain quiet, market sentiment could become impatient and bears could momentarily take charge of gold. On consecutive closes below $343 the bulls might consider bailing out and waiting for prices to ripen before charging back. The trend in gold remains up, and there’s no reason why we can’t be back near $400 shortly, and beyond. By now we’re probably all a bit tired of seeing gold hover around the 350 region, but bulls might consider this a positive omen. Many times periods of consolidation in the midst of a larger uptrend will result in the market picking up steam once again. Nearby action on the chart appears sloppy but the trend for the year is up. A close over $360 during consecutive sessions is likely to target $400. Support is the recent low near $343. Meanwhile, hang onto those gold puts as a hedge to the long futures. 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 = $463.7, -3.5-cents
After a stab to 470, the silver market slid lower on the back of gold prices jumping ship. Recall in 1999 the frenzy Mr. Buffett created when it was discovered he had been purchasing silver. I suppose if facts surface that he’s doing the same with gold, we’ll see silver bulls rejoice. The silver market can sometimes act on fundamentals relating to its industrial use, and other times more like an investment or speculative metal. In either case, lately it as followed gold higher, but has not rallied with the same degree of enthusiasm. Silver didn’t quite make it to the 450 area yet, but those of you long in the 460 area as per TradeScope should be able to lock in profits. On a close above 475 look for new highs. 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, 5 March 2003 | Digg This Article
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