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-- Posted Friday, 28 March 2003 | Digg This Article
June Gold: Close = $332.4, $3.1
On the week, gold ended about $2 higher, hardly representative of the chaotic action one might expect during the outbreak of a war. On the other hand, perhaps that is proof of the uncertainty regarding the duration and monetary, human and political cost of the war. The full attention of the world is on Iraq. Stocks, financials, currencies, and gold continue to feel the impact of war as they dance one way or another depending on the headlines. Any news that infers a protracted conflict in Iraq will burden equities and the US dollar, causing gold to bounce. It now seems that Syria was caught aiding Iraq by providing them with night vision equipment and other military equipment. Rumsfeld issued a stern warning to Syria to cease trafficking such items and the coalition considers it a hostile act. British intelligence says they have now established a clear link between Al Qeada and Saddam. None of these developments were encouraging to stocks or the US dollar, and gold therefore received an injection of buoyancy.
This week on the Australian stock market open-end gold funds began trading. Each share in the fund is backed by gold. Perhaps the World Gold Council will watch this play out and if it’s successful maybe something similar will be promoted in the U.S.? Here are a few details from a marketwatch.com article by Thom Calandra:
”The open-end fund trades like a stock on the Australian Stock Exchange. Because it is backed by real gold stored in a London vault and trades in real time, the down-under product, called Gold Bullion Securities, may be the first exchange-traded fund of a commodity.
Each share of the new fund, which began trading Friday, is entitled to one tenth of one fine troy ounce of gold.
Several mining professionals tell me the gold council is working feverishly with North American regulators in an effort to start a gold exchange-traded fund, managed by one of the large index asset management firms, among them State Street Advisors or Barclays Global Investors.
The gold industry has long lamented - and done little about - the difficult path individuals must travel in order to buy gold for investment purposes. The new Australian fund is a joint initiative of the World Gold Council and Investor Resources Ltd., which created a new Australian company called Gold Bullion Ltd. The Australia Gold Council also played a part.
There are several efforts to launch a gold ETF that would trade like the Nasdaq 100 Trust's QQQs or the S&P 500's Spyders. One of them under development involves GoldMoney.com, a transaction service that is investigating such a security for a Canada listing. The World Gold Council is also pursuing such a product, for possible listing in the United States.”
It seems that the low near $326 earlier this week was a good value, but isn’t hindsight always crystal clear? Higher prices will occur if a vicious and protracted battle in Iraq takes shape. Prices still remain below moving averages and are choppy, but one might sense an inclination for support near $326 to hold. If you must be in on the action, a lower risk method is to use futures options. 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 = 443.3, +4.0-cents
Technical action remains choppy and indicators are a bit oversold. If long be prepared to take a small lump and exit on a close below 438. 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 Friday, 28 March 2003 | Digg This Article
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