-- Posted Tuesday, 28 April 2009 | Digg This Article
| Source: GoldSeek.com
June Gold: Open= 907.2 High=907.7 Low=884.6 Last= 894.1 -14.1
Swine, or Mexican, flu worries continued without abate today and certain commodity prices suffered due to those concerns. Notably, hog futures took another large loss as nations have imposed bans on pork products from the United States, despite no scientific fact that the influenza strain can be passed through the consumption of meat. Also declining, because of worries about less travel demand, was crude oil and gasoline.
Despite a decline in the US dollar index, gold suffered from concerns that the flu worries could hurt the ‘green shoots’ in the economy. Today’s Consumer Confidence figures showed the largest gain since 2005 and taken on its own is a good sign, but one must remember that these figures were taken last week before the flu worries popped up. Much of the short term direction of gold may depend on how the global response to this flu strain plays out.
Even if the flu worries subside, another wave of anxiety is quickly approaching, as the release of the bank stress-test results comes on May 4th. Word leaked out today that the government is telling Bank of America and Citigroup to raise more capital. It likely will not be the only two banks to get such messages. Citigroup reportedly will make its very best efforts to avoid taking more government money, which is no surprise. BofA CEO Ken Lewis is under mounting pressure, as CalPERS, the California Public Employees’ Retirement System, joins a list of institutions and individuals opposing his re-election. It certainly would make the market breathe easier to have shareholders oust the CEO than to have the government do so.
Gold bulls should continue to be patient and wait for prices to break the downward sloping trend-line. Aggressive bulls received their chance to buy weakness today on a dip below $890, but those lows must hold or the risk of another leg down would appear quite likely. Since the short-term trend in gold is down, and still can be defined as a correction, bulls ought to wait for confirmation of strength before getting long. If having a position is a must, then buying futures and selling calls is one type of strategy that could be employed.
Buyers should be looking for a close above $916 before getting long. A break below the double-bottom at $865 would suggest a leg down towards the $820 level.
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
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-- Posted Tuesday, 28 April 2009 | Digg This Article | Source: GoldSeek.com
