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-- Posted Thursday, 27 March 2003 | Digg This Article
Battles in Iraq have obviously captured the attention of investors. This is beginning to sound like a cliché as everyone is saying the same thing, but either directly or indirectly, the major influence on gold at the moment is the war. Of course there are other considerations besides war-related psychology, such as economic fundamentals and supply/demand issues, all eyes and ears appear glued to Iraq-related news. Today, employment and economic data were uncontroversial, with Q4 GDP growth in line with expectations and weekly labor stats showing an insignificant dip in jobless claims. However, stocks, financials, currencies, and gold are mostly taking their marching orders from the hour-by-hour headlines. Any news that infers a protracted conflict in Iraq will burden equities and the US dollar, causing gold to bounce. Conversely, news of surrender will press stocks up in a relief rally and gold will have almost no choice but to play second fiddle and slump. The trading environment is choppy as investors are nervously pacing the sidelines, unable to make a strong commitment in either direction. The economy is chugging along, but the dark cloud of terrorism continues to temper the enthusiasm of consumers. Nobody can accurately predict the daily machinations of the war effort. To trade gold right now one must be quick and flexible, not hesitating to get in or out at a moments notice. For longer-term investors, these hourly gyrations should be of little consequence. In fact, with much of the war premium having been chased out of gold, there are many gold bugs chomping at the bit to buy at these levels.
Is gold in the $320’s a great value? Whether or not a wave of buyers will press prices higher is somewhat dependent on whether or not a vicious and protracted battle in Iraq takes shape. If so, it's safe to assume stocks and the dollar will slump, energies will find strength, and gold will make bulls wealthier. Only highly speculative traders would want to consider unhedged futures positions. Buyers should look to exit on a close below $327, or look to futures options as a way to be on board. Prices are below moving averages and sloppy. 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 = 439.3, -.50-cents
Technical action remains choppy, bit indicators are a bit oversold. Bulls may want to hop back on the horse and give it another go, but as always, if prices don’t rally be prepared to take a small lump and exit on a close below 434. The next resistance area is now 451 or so. Certainly there is room to rally but only on the shoulders of a willing gold market. Finally, take note of the bullish seasonal, where in 12 of the last 15 years May Silver has rallied from approximately March 18 to April 4 an average of about 11-cents. So far this seasonal has played out, but there is still some time left. 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, 27 March 2003 | Digg This Article
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