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« No Way Out | Main | Day 2 - Casey’s Gold & Resource Summit »

Gold Prices Trend Ever Higher

Gold Chart 06 October 2010.JPG

Gold prices moved higher today to trade at around $1340.00/oz, hitting another new all time high, which, hopefully puts a smile on the faces of all of our readership. Silver prices also came to the party with a gain of around $1.00/oz, to trade at around $22.87/oz.

Taking a quick look at the above chart we can see that gold prices have made a new high today once again putting more heat on the short sellers, some of whom may cover their positions and take a small loss now, while others will hang on a little longer before capitulating with a greater loss later on.

The chart shows that the moving averages are moving upwards in support of gold prices which bodes well for future increases as we do not want to see gold opening a large gap between its price and the 200dma thus tempting a sharp correction.

The technical indicators, the STO, RSI and the MACD suggest that gold is overbought, so we would normally prepare for gold to take a rest at this point and this may well happen. However, as we keep banging on about it, the world of pretend money is in turmoil with one country after another devaluing their own currency rather face the truth about their own economic mess, for which they are largely responsible.

Just take a quick look at what is going on across the globe at the moment and the following important factors pop up:

Australia decided to hold rates for now. Helicopter Ben sells us the virtues of Quantitative Easing. Across the pond the EU worries about a strong euro stifling the recovery, so I guess we can expect some sort of action there in order to prevent it going higher. Japan moves again by cutting its official lending rates.

No-one wants to be holding the strong currency baby when the music stops, so the spiral down continues for most currencies, hence silver and gold prices will also continue to spiral upwards. This current state of affairs leads us towards thinking that the fundamentals will override the technical analysis, at least for now. Thus we arrived at the conclusion that we must focus and invest aggressively in the physical metals, along with the associated mining stocks, boosting profits with some well timed options plays.

Talking of profits, over in our options trading den they closed a trade last night with a profit of 82% which follows their recent success of closing a trade which generated a profit of 50% in 30 days on GLD Call Options, so they now need update their progress chart, yet again, which will probably be done this weekend as things are a little hectic at the moment. However, to see exactly how it is going, please click this link.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

On Friday, 27th August 2010, we closed another successful trade banking a profit of 79.46% on Call Options on Silver Wheaton.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09. On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days, with more positions opened yesterday. Drop by and take a look.

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. (Winners of the GoldDrivers Stock Picking Competition 2007)

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.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

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Reader Comments (2)

A Possible Model for the Price of Gold?

For the past 5 or 6 years I have been looking for a model that correlates with price of gold. Interest rates? Inflation? USD????

This article at looks at Gibson’s Paradox and the work of a couple of economists. He offers a model that looks good on the surface.

Time to break out the number crunching machine and work them up myself. Any of you out there with an econometric bent want to jump in?

October 6, 2010 | Unregistered CommenterBC

We'll be interested in what you come with and our readers will also be interested in your conclusions.

October 7, 2010 | Unregistered CommenterGold Prices

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