-- Posted Monday, 17 September 2007 | Digg This Article
December Gold - Open: 715.8 High: 728.9 Low: 714.8 Close: 726.1
Gold has put on quite a show this past month with a $70 streak higher in prices, from $653 to $726. Although a rather weak close on Friday left the short term trend in doubt, the potential for a further push from the bull camp is a likely after finally breaking through resistance at the $700 level, which had stymied the bulls this whole year. Speculation ahead of tomorrows FOMC meeting led today's $8+ gain as traders sense the Fed will be more concerned with inflation than the ongoing housing market troubles. In terms of monetary policy, the Fed is distinctly charged with fighting inflation, not so much dodging a recession. However, this hasn't stopped the Fed in the past from using its tools to tinker with rates to control general economic conditions.
From a technical standpoint, a distinct ceiling has formed since July of ‘06 and prices are finally breaking through the topside. Fundamentally, commodities, as an asset class, are in a bull market, gold included. From a supply demand perspective, production of gold has not increased substantially over the past 3 years of this bull market. With ETF’s pulling physical stock off the market in large quantities, its no wonder that bids have been steady. From a financial outlook, worries about the stability of the dollar are giving gold a flight to quality boost. If the Chinese economy is going to overheat at some point post-Olympics and the US is facing a credit crunch/housing slump, investors are looking for a safe place to store capital. Those investors are diversifying their currency assets and buying gold.
Looking at outside market developments, it’s interesting to note that while there has been some fear of an economic slowdown, energy prices, most notably crude oil, are surging and seeking new highs. Even with last Tuesday’s news of a production increase from OPEC, crude oil prices still rose on concerns of increasing global demand. We lived with a decade of cheap goods during the 90’s and commodity prices are being revalued in light of global economic expansion and the lack of increased production capacity.
Establishing long positions in the gold market on a pullback to the $697-701 range would be a good play for traders looking to profit from positive moves ahead. 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
tom@altavest.com
www.altavest.com
Risk Disclosure:
The risk of loss in trading commodity futures and options can be substantial. Before trading, you should carefully consider your financial position to determine if futures trading is appropriate. When trading futures and/or options, it is possible to lose the full balance of your account. It is also possible to lose more than your initial deposit when trading futures and/or granting/writing options. As a result, selling/writing "naked" options exposes the seller/writer to the possibility of margin calls and virtually unlimited risk. All funds committed should be purely risk capital. Past performance is no guarantee of future trading results.
-- Posted Monday, 17 September 2007 | Digg This Article
