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-- Posted Wednesday, 4 March 2009 | Digg This Article | Source: GoldSeek.com
April Gold: Open= 912.8 High=923.7 Low=900.4 Last= 906.6 -6.2 Today, the only major currency the US dollar index advanced against was the Japanese yen. Despite the move lower by the dollar, gold still faced unrelenting selling pressure and closed lower for the eighth straight session. Prices briefly trading at the $900 level late in today’s session before bargain hunting came in to stop the bleeding and gold closed about $6 off the lows of the day.
Gold is trading in its own environment right now. Physical buying has slackened, the dollar has been rising, the stock market is collapsing, and yet even when those pressures are removed, gold cannot manage a positive close. It became clear last week that gold, although not overbought by any measure of the COT, the market was running out of fresh buyers and it was crowded with stale long positions that wanted out. The market is in price discovery mode and one should stay clear until others, wiser and with deeper pockets, take stabs at the market. Prices have now fallen back into the last real consolidation range on the charts, when prices chopped between $890 and $928 from Jan 26 to Feb 10. If prices hold $890-900, then traders should wait until prices close back above $928 before becoming comfortably long again. If prices fall to the support then the next downside objective is near $850. Market bears should take note, that according to a Bloomberg article, Steve Leuthold, whose Grizzly Short Fund gave a 74% return last year, said that investors are too fearful of the economy and he is turning bullish. He stated that economic conditions still are not as bad as 1974 yet the cries in the public and media are that the next Great Depression is upon us. Jim Rogers was interviewed recently about his thoughts on what to invest in and his answer was quite simple, that he was sitting on the sidelines. The dollar looks awful, “seriously flawed” according to him, and the only thing he might invest in the near future is commodities. How could one of the biggest names in trading be sitting on the sideline? Perhaps there is too much turmoil and not enough reliable information. With the government churning out rescue plan after rescue plan, it is difficult to speculate what might be around the corner and which sectors will be impacted and how. Rogers’s longer term outlook is that the US dollar is seriously flawed and sees some sort of currency crisis in the next few years. He is looking to sell out of the dollar by the end of 2009. As Dennis Gartman keeps repeating, he is holding gold not because he believes in an imminent collapse in the dollar or of the world as we know it, but because it’s a good insurance policy just in case he is wrong. Over time, gold has shown to be a good place holder of value. Its return in the past 200 years has roughly been 0%, but in times of panic and turmoil, staying pat is far better than losing big.
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 Online contact us at info@altavest.com. Visit www.altavest.com to request a Free Trading Kit. Keep in mind that there is risk of loss in all trading.
Thank you, Thomas Hartmann Altavest Worldwide Trading, Inc. 800 994 9566 x109 949 488 0545 x109 Fax 949 488 7625
-- Posted Wednesday, 4 March 2009 | Digg This Article | Source: GoldSeek.com
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