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-- Posted Tuesday, 18 March 2003 | Digg This Article
April Gold: Close = $337.7, +$.50
As expected, Saddam and his sons flatly rejected Bush’s ultimatum to leave Iraq within 48-hours. With the hours ticking down until Saddam meets his fate, the gold market decided it would be best to sit on the sidelines and wait for a catalyst to bring something new to the party. The Fed left rates unchanged, with their stance largely due to the uncertainty of the global political situation. The assertive tone of the White House has finally put an end to the guesswork regarding the timing of a possible war, now we know a conflict will break out and we know the approximate timing. The US dollar and stocks are anticipating a short and decisive victory against Saddam as evidenced by the relief rally, but this also pulled the carpet out from under the energies. In the case of crude, one should have bought the rumor and sold the fact, and in the case of the US dollar and stocks, one should have sold the rumor and bought the fact! But, “shoulda’s” aren’t reflected in your account balance. Of course all hell could break lose from any angle, so the unexpected should continue to be anticipated. After all, the economy is a long way from being out of the woods, and recall that this downturn began before Iraq came to a boil, before 9/11, and before Bush took office!
And now I’m going to get a bit political, mostly to see if you’re paying attention. For all of you who have told me how despicable President Bush is for his position on Iraq. One simple question, what is your solution to disarming Iraq as per the Gulf War cease fire agreement mandated by the U.N. Security Council about twelve years ago? And, don’t say “more inspections”, because those don’t work unless there is full cooperation from those being inspected. After all, inspectors aren’t treasure hunters, and nobody can legitimately claim the U.N. inspectors ever received full cooperation. So, any ideas? With gold prices off about $50 from the recent high, are bulls now too scared to charge back in, or will these lower prices goad them back into the game? Market gyrations are driven by fear and greed, so will bulls be fearful of losing and scramble for the exits, or will they be so greedy that they just have to buy at any price so as not to miss a potential rally driven by some monumental and unexpected disastrous event? Once again the low near 334 held, but barely. Prices are below moving averages and appear choppy. Aggressive traders could enter longs in this area, but as always exit soon if you jumped the gun. We can forecast and assign all sorts of reasoning or rationale to market movement but what really matters is implementing a position with a favorable risk/reward ratio. Be sure to watch TradeScope daily. Remember, with futures and options one can be short or long, feel free to contact me to discuss trading strategies. Each contract/option = 100 ounces, a $1 move in a futures contract = $100.
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 = 446.3, -+1.3-cents
It appears that silver doesn’t want to make the first move and break away from gold’s lead. The bearish head and shoulders formation came to fruition, but now prices remain choppy, at best. Volatility is quite high as everyone is on edge over Iraq. Surely silver has loads of room to rally but only on the shoulders of a willing gold market. With prices now chugging along the low road, look to the 443 area as major support. As with gold, perhaps aggressive bulls might want to buy, maybe near 445 or so, but as always be sure to exit if wrong. On a close above 475 look for new highs. Finally, there is a bullish seasonal starting, where in 12 of the last 15 years May Silver has rallied from approximately March 18 to May 4 an average of about 11-cents. Of course, history isn’t guaranteed to repeat itself. 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 Tuesday, 18 March 2003 | Digg This Article
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