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-- Posted Tuesday, 13 May 2003 | Digg This Article
June Gold: Close = $350.2, -$1.7
Another suspected terrorist bombing, this time is Saudi Arabia, kept pressure on world financial markets and gold languished, and the revelation that our trade gap is widening certainly didn’t console investors. The US dollar gained just a few points, but it’s still hovering near four-year lows and the yellow metal is still near two-month highs.
Just the other day Treasury Secretary Snow commented that the recent devaluation of the US dollar was actually beneficial to our economy, as it would kick-start exports. Today however, he said that a “sound currency” is a benefit to an economy, and traders inferred that perhaps Greenspan and the Bush administration might react with an effort to support the dollar.
It’s also interesting to note that global investor and “Market Wizard” Jim Rogers recently said that Greenspan is making a terrible mistake (actually, I think he called him a fool!) by printing money, as no country as ever debased their currency and successfully sparked their economy into prosperity. His money is long Euros, but he also cautions that the recent spate of action mirrors that of a frenzy, and he wouldn’t be buying them now. So, for the near term, the inference is that he feels the DX is due for a correction, and that would infer gold is too! On the other hand, he’s not a short-term trader, and even though he may disagree with Greenspan’s current policies, perhaps the fact that he remains long Euros is proof that he feels those bearish dollar policies will stay in place. Technicals are overbought, with slow stochastics over the 90 area. Prices are clearly in a two-month uptrend, but near term they are top-heavy and odds would suggest we’re due for a pullback by the end of this week. Also be aware that any indicator is not foolproof and prices can persist in spite of overbought/sold conditions. If long with TradeScope, keep your stops close behind prices, don’t rest on your laurels, pull some profits off the table, prepare for a swing lower and get ready to add at better prices. The $346 area reveals some support, with $360 as resistance. With futures and options one can just as easily go 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 = 482.5, -4.7-cents
Silver action was clearly influenced by gold today, and in spite of the pullback in silver, prices remain near a three-month high. The latest Refco research regarding the World Silver Survey 2003 says that silver is likely going to remain in a wide range through the remainder of the year. Of course it doesn’t take much courage or brains to profess such an innocuous outlook, but that’s how we also see it. Silver has rallied alongside gold, all thanks to a weaker dollar. Look for 468 as the next support level and the nearby high as resistance. Volume and open interest both jumped higher yesterday, but offer little directional clues right now. 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, 13 May 2003 | Digg This Article
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