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-- Posted Wednesday, 23 April 2003 | Digg This Article
June Gold: Close = $331.9, -$2.9
After running to a three-week high, gold backed off a bit and settled near session lows. Action in the equity indices was barely favorable, and such was the case with the US dollar. The Fed’s Beige Book assessment of the state of the US economy basically said economic growth is tepid, partly due to cold weather and the war in Iraq. The big question is, will consumers surge back with their buying shoes on or remain on the sidelines. Investors appear reticent to commit and make a move. Now that war in Iraq is essentially over, a trickle of optimism and relief could flow into the markets. However, there are now other issues surfacing to act as a potential anchor on the global economy and conversely influence gold. One also might deliberate how the threat of SARS spreading could influence investment behavior. If SARS were to dramatically propagate we'd certainly be in uncharted territory in regards to many issues, with the financial and economic landscape included. One could argue an escalation of the outbreak could only exacerbate the woes of a struggling global economy, especially if SARS continues to grab front-page headlines. Perhaps investors now have another reason to worry, another excuse not to travel, not to spend, and to avoid equities. If the situation escalates, it’s possible that paper-based intangible assets will be neglected further and tangible assets such as gold could emerge as the beneficiary of newfound attention. One should keep in mind that pre-war tensions drove gold to over $390, so it's not difficult to imagine gold getting jittery due to such a global reaching epidemic. On the other hand, SARS could cause many to simply coil up in a shell and not do much or think much about investing. The foreign affairs landscape is assuredly going to remain chaotic, to say the least, and gold is cautiously edging up from recent lows. Energy prices sank again today, and you’ve probably already noticing lower prices at the pump. If crude revisits the $12 area, this would be a dramatic boost to our economic potential, and I’d have to guess that even with the war on terror, etc., continuing, cheap energy would bring about a tremendous boost to the economy. Be sure to only initiate positions with a favorable risk/reward ratio and try to filter out the static. Prices are still above the 5, 10 and 20 period moving averages, but if you bought the other week along with TradeScope, were sure stops are tightly in place. The 347 area would be the next target on the high side, 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 = 463.9, +2.8-cents
Prices hit a four-week high today and even closed in the black when gold didn’t. Silver bulls have taken charge the last couple of weeks, but one has to wonder if were seeing new buyers entering and the market in strong hands, or perhaps short covering or even small speculative buyers bidding up prices in light volume? The chart shows technical indicators are now bullish but approaching overbought levels, and prices are also over moving averages. If long be sure to try and lock in profits and exit on a close below 456. The gap in the 464 area that we mentioned was filled in, so maybe a setback is due. 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 Wednesday, 23 April 2003 | Digg This Article
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