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-- Posted Tuesday, 15 April 2003 | Digg This Article
June Gold: Close = $325.4, +$.50
With everyone in the good ole US of A scurrying around to complete tax forms is it any wonder the markets mostly flat lined today? Perhaps you political junkies will get a kick out of these articles below, and if not a kick, perhaps a nauseous stomach or an ulcer! So, in the spirit of the tax season, check this out, and this too! My goodness our tax system convoluted, and that is an understatement!
Now, back to trying to figure out where gold is headed. With the major combat in Iraq now apparently over, Bush is focusing on economic stimulus and tax reform. On this auspicious of days, tax day, Bush gave a speech outlining his tax relief policy. The timing of such couldn’t be better as hundreds of millions are starting at those 1040’s, as who other than a socialist wouldn’t want to hear about relief today? Politically speaking however, Bush has a long road and tough sell, as Democrats are predictably going to fight against eliminating the double taxation on dividends, among other new tax reduction policies intended to stimulate job, investment capital creation and economic growth. However, perhaps Bush will surprise everyone again and get what he wants. In any case, the results of the tax battle won’t surface for a while, and the implementation of such is even further away. An instantaneous injection of stimulus isn’t a political reality, but the anticipation of such could have an impact on public psychology and their investment decisions. Gold prices are consolidating and awaiting fresh news, it’s having a difficult time acting on its own accord; it only seems to be moving in correlation with the US dollar and equities. Just when it attempts to make a break the influence of equities or currencies thwarts the advance. Clearly traders are indecisive regarding the yellow metal, with neither bulls nor bears confident enough to jump in headfirst. And, let’s not forget how choppy stocks are too. Momentum needs to develop to entice gold players on the sidelines into the game. Bulls will argue that prices have stabilized above $320 and a launch pad for another rally is forming. Bears would argue that geopolitical influences are now muted at best, and that the risk/war component of prices has further room to deteriorate. Do your best to follow the longer-term trends, initiate positions with a favorable risk/reward ratio and try to filter out the static. Monthly gold charts show gold still remains in a longer-term uptrend. With prices having fallen somewhat consistently over the last couple of months, is the correction over? Prices are not yet above the 5, 10 and 20 period moving averages, but when gold closes consecutively above those averages look for continued strength. Meanwhile, aggressive bulls that bought in the low 320’s are doing just fine, but should move stops to at least breakeven levels. 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.
July Silver: Close = 453.7, -1.5-cents
Prices appear to want to edge higher, as we’re now about 20-cents off of the lows from last month, and for the first time in a while, silver seems to be leading gold. We broke out through the 450 area but volume doesn’t appear to be huge. The chart shows technical indicators now headed higher. If long, exit on a close below 448.50 and look for the next resistance area near 464, which is the bottom of a recent gap. Certainly there is room to rally, but recent history has shown us that silver will be more apt to rally only on the tail of a gold rally. 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, 15 April 2003 | Digg This Article
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