The volatility continues across the markets and is aptly demonstrated here by the USD which started the day heading south and then bounced to gain 1.39%. Gold prices drifted lower in Hong Kong and in London before heading higher in New York as the chart shows. We have warned about volatility increasing and becoming the order of the day, so hang on to your hard hats and your position in the gold and silver sector as they will reward you in time.
Going forward get used to the idea of $100/oz movements per day in gold prices and say $2.00/oz per day for silver prices, then you will not be taken by surprise and not shook out of your position. We are heading into the summer season which can be a little lacklustre in the precious metals space, however, with the European pantomime going from bad to worse this summer may be a tad more active than usual. The new government in the UK will no doubt open the books and shock horror, the financial skeletons in the cupboards will come life with alarming frequency having a knock on effect on the pound. The race to the bottom for currencies will gather pace and now appears to almost unstoppable, the pound, the Euro and the US Dollar are all in deep pooh.
In a missive from Jim Sinclair today he summarised the action as follows:
The euro below $1.20 would strongly suggest Chairman Volcker is right on the subject.
The euro below $1.10 would confirm that Volcker is correct.
Presently there is key support at $1.2150.
The euro today traded as high as 1.2448 and dropped below $1.2150 trading now at $1.2202. That is outrageous activity for a major currency
There is no central bank nor is there any intervention that can stand against the tool of credit default derivative swaps. Gold is you're only safe harbor.
Keep smiling its all falling into place for gold and silver bugs.
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.
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.
Dont forget to enter the competition to win a free subscription, click here.
Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more.
Silver-prices.net have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.
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 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.