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« Fronteer Developments Group: A Gold Prices/Uranium Play | Main | Agnico-Eagle Mines Limited Acquires High Grade Meliadine Property »
Tuesday
Apr062010

Gold Prices Update 07 April 2010

Gold chart 24 hour 07 April 2010.JPG


We are pleased to see gold prices taking a peak at the $1140/oz level today despite the US Dollar also showing strength, touching 81.6, which we view as being positive for gold prices going forward. Silver prices flirted with $18.00/oz but slipped back to $17.92 just after the close on the NYSE.

A missive from Jim Sinclair this morning entitled: Gold Shares - Lemmings over the cliff, in which he had the following warning for holders of precious metals stocks:


Negative spin and disinformation in its various forms (en masse downgrades - quietly followed by upgrades and negative articles on gold shares with solid management, valuable reserves, and excellent financing) are no accident. Organized interests want your quality gold shares and will herd you like lemmings over the cliff to acquire them. You must stand strong with your gold - January 06 2010 and quality gold shares. Ignore the spin. The gold shares stand on the cusp of a major breakout. Three taps and out is nearly complete.



So there we have it, hang on to your favourite gold and silver stocks as the future looks bright according to Jim. We are holding firm to our stocks although, as we have written in the past, we are a little disappointed at the stocks inability to set this sector on fire. Maybe we are just not patient enough and the best is still to come, go gold go!

Got a comment then please add it to this article, all opinions are welcome and appreciated.


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Reader Comments (7)

You guys are playing with fire if you buy gold right now. The extension of the stock market rally was the only excuse for gold to do not plunge below 1000 level. I was waiting it to happen in march, but i guess i will be wrong by a week or two. 1144 is my top barrier for gold, makes it a good short right now. It looks like we are going to see the euro dropping to 1.2000 area and this will make gold to fall below 1000 quickly. You are going to need a lot of strength if you are planing to stay strong enough to withstand the coming selling avalanche, keep your account liquid so you can hold up to 80% of drawdown in your portfolio, this would be my best advice. Ohh, by the way, do you know in which month the 1930 stock market rebound was over? Yeah, it was early april. Regards

April 7, 2010 | Unregistered CommenterDi

By a week or two? Is that a joke? You've been calling for a break under $1,000 for at least a couple of months. I'd be glad to provide the direct quotes if you like. It's okay to be wrong. It's not okay to disclaim responsibility for getting it wrong. Anyone who followed your advice to date is pretty seriously under water.

A few points:

1) Maybe gold will crack below $1,000 with the dollar rising and the stock market getting crushed. Maybe it won't. Who knows for sure? No one. I sure don't, although this sure looks like an upside breakout to me.

Here's what I do know. Being early is a whole lot like being wrong. This calling of absolute price levels where the gold or silver price must do this or that is puerile.

I recall, according to your comments in February, silver couldn't rise above $16.50. It's $18.50 now. I point this out not to disparage you personally. I do it to try to dissuade people from making or listening to these silly line-in-the-sand prediction. I'll pay attention to someone like Ackerman, who has an impressive track record and knows how to manage risk, but most who set hard targets are just making stuff up. Guesswork and gambling will not make you money long term.

We all would love to have certainty, so these haruspications are appealing. But your time is better spent understanding history than drawing 30 lines on a chart and playing the role of Haruspex.

ANYTHING can happen in the short term It's a game of probablities. Very inexact. Longer term, the trend is clear to anyone with eyes.

2) You assume that the euro dropping / dollar rising is necessarily gold negative. Maybe. Maybe not.

3) Anytime you buy gold for anything other than insurance, you're playing with fire. That doesn't mean you shouldn't buy it for a short or intermediate term trade. It means you have to learn how to handle fire. Anyone who shorts a bull market is really playing with fire. It can work out, of course, but so can a game of Russian roulette.

So, even if you have a winning trade here, your short looks amateurish to me. Not that I wish you bad luck. I've been lighter than usual waiting for a selloff. I've been wrong. And markets that won't selloff when they "should", typically do what? Add on another leg.

4) If you want to play it safe from a long term perspective, buy some gold for insurance and forget it. If you want safety from a shorter term perspective, don't enter the firepit.

5) Speaking of drawdowns. what are you gonna do if you're wrong and gold spikes up from here? I suspect you'll cover your shorts. Why do you assume someone who went long and was wrong wouldn't simply set a stop loss and get out? "80% drawdown." Please. Anyone who's on this site isn't that stupid. Any trade is okay, as long as you practice some basic money management discipline and limit your loss.

6) The 1930 rebound ended in early April. Hmmmmm. So &#$*@&% what?

Couldn't help but notice as I was typing this that your "top barrier" for gold was just blown away. Don't you feel at least a little bit stupid now for the assurance with which you made the comments above?

Please spare us further bold predictions.

April 7, 2010 | Unregistered Commenterfallingman

Di has a good point. But the big question is will the mining stocks decouple and buck the trend? If the market does plunge this time, will there be a flight to quality (the PMs) rather than the dollar? Maybe we are seeing the decoupling just starting because both gold and the dollar are moving up together. And remember, the USDX is in relation to a basket of other currencies, so Gold does not necessarily have to be the inverse of the dollar! My two cents.

April 7, 2010 | Unregistered CommenterMark

HUH?? a chart of gold and the gold stocks shows many broken downtrend lines...with volume on the way up!! THAT is when to BUY!! I was surprised to see DI wrote that at 12.32 p.m. on april 7th...I was 70% invested last week..now ready to ride this rocket.....UP! Look at EGO..volume spike...we may retest a trendline someday, but this is quality buying.

I guess thats what makes a market...someone sells for their opinion and someone else is greatful for the buying opportunity :)

gold~prices...yothanks for your updates!!

thx

Robert

April 7, 2010 | Unregistered CommenterRobert

Just tell me ... shld I buy gold or not rite now....just Yes or No. thank You

April 8, 2010 | Unregistered Commenterasma

If the market does plunge why would anyone move into an asset that has been diluted, and will continue to be diluted by the current admin.Look at the aussie dol. why such performance. GOLD BACKING so why not skip over the paper BS and go straight into what backs it. JMHO

April 8, 2010 | Unregistered CommenterVincent

asma,

We are not financial advisers and cannot give advice on an individual basis, we do not know your circumstances, aversion to risk, etc, however your question on this site should prompt our readership into offering their thoughts and they have a myriad of ideas depending on your tax jurisdiction, security, objectives, etc.

Best wishes,

Bob

April 8, 2010 | Unregistered CommenterGold Prices

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