-- Posted Wednesday, 21 February 2007 | Digg This Article
Gold and silver closed at 9 month highs today, fueled by a government C.P.I. report that indicated price inflation in January was higher than anticipated.
Gold had already moved above resistance at 660.00 a few weeks ago, but silver kept bumping up against resistance at 14.00.
Today the silver price closed firmly above 14.00. The next target is 16.00 and it will likely be achieved soon. For gold the next target is the May 2006 highs at 725.00.
Charts courtesy of www.stockcharts.com
Featured is the SLV (silver ETF). The blue arrow indicates where the next target for silver is expected to be. 160 for SLV = 16.00 for silver bullion.
In our last report we drew your attention to the fact that the commercial gold traders were ‘net short’ 166,000 contracts, and that this number is fairly high. Due to the fact that we saw some weakness in the gold price early this week, we can anticipate that at least some of these contracts were covered. Some more short positions may well have been covered during today’s rally, by traders with stop loss orders in place.
The various mining indexes all turned up today, led by the 22.00 rise in the POG.
Featured is the HUI index of unhedged gold and silver stocks.
Featured is the XAU Philadelphia gold and silver index.
Featured is the broadly based AMEX Gold Miners Index.
The bullish fundamentals for gold and silver can be expected to continue to move this rally along, albeit with fits and starts. The ideal approach is to treat this bull market as if it were a ‘live bull’, bucking and kicking, therefore let’s hold on and enjoy the ride!
The oil and gas sector continue to look positive as well.
Featured is the AMEX Oil Stocks Index, with a well-defined channel.
Ditto for the AMEX Natural Gas Index.
DISCLAIMER:
Please do your own diligence. I am not responsible for your trading decisions.
Peter Degraaf is an on-line stock trader. He issues a weekly Email alert for his many subscribers. For a 60 day free trial simply contact him: ITISWELL@COGECO.CA
-- Posted Wednesday, 21 February 2007 | Digg This Article
