Gold Review for 2/27/09 By: Thomas Hartmann, Altavest Worldwide Trading, Inc.
-- Posted Friday, 27 February 2009 | Digg This Article | Source: GoldSeek.com
April Gold: Open= 941.9 High=964.0 Low=927.0 Last= 942.7 +0.8
Gold traded in a wide range today, encompassing all of yesterdays, but the end result was a minimal gain on the day.Even another day lower in the stock markets could not help give gold much a lift.
Today’s big news came in the way of a massive revision in the 4th Quarter GDP, dropping 2.4 percentage points, to negative 6.2%.This is the worst performance since 1982.Another disturbing sign of the weakness in the economy was the third quarter in a row of falling consumer spending, the first time since 1947.
The bottom of this recession will come when consumers believe that the price of goods will be higher in the future than currently.That will prompt consumers to buy products they have been eyeing for months but didn’t have the wherewithal to pull the trigger.Many retailers are still trying to rid a backlog of inventory from the holiday season and it may be some time before prices can be raised.Consumer thinking is getting entrenched with “if it is not on sale now, wait a week.”
Next week will likely not start well for the equity markets as Personal Income, Construction Spending, and the Manufacturing Index figures are released Monday AM.As stocks take a beating will investors look to gold sales to help shore up shaky books?
Initial support comes in near today’s lows; in the low $930 range. Chart analysis shows that not only is $930 the top of the last consolidation range, but it was a price peak back in October of ’08, providing a horizontal support zone across the chart.However, given the volatility of gold, a pullback could encompass a price range to as low as $880.Buyers should view this correction as a buying opportunity but may want to include some sort of put protection.
Review charts on these markets here www.britefutures.com. Remember that futures and options can be used for bullish or bearish positions; 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 Onlinecontact us atinfo@altavest.com. Visit www.altavest.com to request a FreeTrading Kit. Keep in mind that there is risk of loss in all trading.
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