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-- Posted Thursday, 6 March 2003 | Digg This Article
April Gold: Close = $356.9, +$3.7
With stocks heading lower, with the US dollar taking a back seat to the Euro, with the recent terrorist bombings, with the hunt for Bin Laden and his kind continuing, with Saddam cleverly yanking the chains of the U.N., and with plans to take Saddam down moving ahead, is it any wonder that gold has been able to hold its turf?
The very real possibility of the UN not passing another resolution was in the cards but Britain is suggesting a new resolution with some compromises. Saddam has clearly not complied and disarmed as instructed. President Bush will speak to reporters this evening and Blix is set to make a presentation tomorrow. It’s very predictable what they’ll both have to say, so don’t expect dramatic revelations. The interrogation of the captured Al Qaeda seems to be yielding results, and it’s only a matter of time before all the leadership of such horrendous organizations is eliminated. Nonetheless, the process will take time and markets will continue to be volatile, especially considering that with our without agreement on a new U.N. resolution it’s almost a certainty that Saddam will be under attack within the next month. All this chaos could certainly favor investments like gold.
Rumors of Warren Buffett buying gold have not sent shockwaves through the market. Perhaps it’s because of the realization that Mr. Buffett didn’t even mention gold in his annual letter to shareholders of Berkshire Hathaway. Mr. Buffett, along with other pundits, most notable those of Elliott Wave fame, are predicting further dire straights for the US financial markets. With the economy and stocks floundering, with higher energy prices bound to strangle growth, where are investors to stash their wealth? Perhaps gold will garner even more favor from investors looking for alternatives?
The trend in gold remains up, and there’s no reason why we can’t be back near $400 shortly, and beyond. 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. 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. On consecutive closes below $343 the bulls might consider bailing out and waiting for prices to ripen before charging back. 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 = $467.3, +3.6-cents
Yesterday we made a stab to 470, today we made it to 471 and on the shoulders of gold, closed in the black by almost 4-cents. There is plenty of potential for this market to rally, but don’t expect fireworks unless gold can make a new high. 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. 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 Thursday, 6 March 2003 | Digg This Article
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