As we mentioned yesterday gold got off to a good start which carried through to New York where it traded above $1170/oz before the session turned sour and the shine was taken off gold as trading came to a close.
Not to worry, the week started with a gain and most of it remains in place.
But, the above chart for gold shows that the technical indicators are banging their heads on the ceiling, in particular the RSI is sitting at 79.29 today which is a cause for concern as we usually regard '70' as sell signal. However, gold fever is building and the dollar is hanging onto the '75' foothold, but only just.
Our strategy remains the same in that we are holding onto our core positions in the belief that both gold and silver will go higher. On the other hand our Call Options on Agnico-Eagle (AEM), Randgold (GOLD) and Silver Standard (SSRI) will need to be watched carefully as time erosion can be devastating if the metals go sideways or down. We have placed sell orders on both Agnico-Eagle and Randgold at twice the price we paid for them in the event that we get a spike in prices, but have not placed an order on Silver Standard as yet, still stewing on it.
Thanks Giving Day in the USA comes up on Thursday so we may see that trading turnover could well be thin over this period. For the rest of the world it will be business as usual and we could see the dollar dip below '75' with '72' being the next support level. It could all happen fairly quickly so stay awake.
Enjoy the week and please add any comments that you have as they all add balance to our cavalier stance on this subject.
We apologize if we have not answered your email, but there are only so many hours in a day, so please use the site to get your point across.
To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.
For those readers who are new to this site and are interested in the nuclear power sector that is currently coming back to life, you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.
For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.