-- Posted Tuesday, 12 May 2009 | Digg This Article
| | Source: GoldSeek.com
June Gold: Open= 917.0 High= 924.9 Low= 912.4 Last= 923.3 +9.8
Following three straight sessions of a narrow trading range, the gold market appears to gaining some bullish momentum to the upside today. Having broken the downward trend-line last week, the market has consolidated sideways, which caused some concern amongst bulls that the market did not have enough fresh buyers to move the market higher.
Flight-to-quality buying may be shifting from the US dollar index and back to gold as fears of a global economic collapse have subsided, being replaced now by a general distaste for the financial situation of the United States. There are few pundits that are short of gold but many are neutral as they see gold expensive relative to other commodities, like grains and some energies. Therefore, some see future inflation benefiting these other markets more so than gold.
While this may be true, it would be hard to argue that gold would not benefit from inflation and a declining dollar. However, it was only yesterday that Chinese economic data was still signaling deflation; therefore traders must remain patient as the market struggles to move past deflation. Only then can growth take hold and inflation begin to show up more prominently in the PPI and CPI data. The good news is that gold remained well supported in the past few weeks while the traders juggled mixed economic data.
Today’s close in June gold is the highest in approximately six weeks, and may pull in fresh buyers from the side lines. It should be hard for those neutral to ignore the break in the downward trend and now a small breakout. For those that get long, stops ought to be set below the most recent lows around $885. The next upside objective is $935 and the longer-term one is up at $998. It could be a slow grind, so traders could consider selling calls against their futures positions.
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 our online paper trading service BriteTrak, contact me at tom@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 Tuesday, 12 May 2009 | Digg This Article | Source: GoldSeek.com
