Every picture tells a story and for gold bugs the above chart is a pretty nice one.
Gold prices jumped $30.00 bursting through the $1200/oz level as the broader markets hit the wall with the DOW dropping 997 points before recovering to close 347 points down.
Silver prices gained 13 points to trade at $17.63/oz and the gold bugs index, the HUI put on 7 points. It looks as though the stocks have been caught by the surprise as gold prices rocked up and left the stocks waiting at the station, tomorrow may see them playing catch up should gold prices hold at these levels. Oil also dropped around 3%.
The reasons vary for the fall in the DOW from a glitch in the system, programmed selling, etc, however, we tend to lean towards the fear factor emanating out of the financial mess that is now eurozone. Can the Greeks meet the austerity measures being imposed on them? In a word NO! And this situation is spreading like a virus, which in posh circles is now called contagion. One thing that it has brought home to us is that the European administrators are incapable of acting with speed and have dithered with this dilemma. They are now victims of their own inability to act and are no longer in the driving seat, in that they are reactive instead of being proactive and putting some of these problems to bed. The worst of this sovereign debt fiasco is not behind us, it is still to come so hold on to your hard hats and your hard assets.
The break up of the European Union is not far away.
Meanwhile back at the ranch our recently held competition has been won. On the 23rd February 2010 we posed this question: Will gold prices reach $1000/oz or $1200/oz first?
This competition was loosely based on the challenge made by Peter Grandich when we wrote:
We are conducting a poll on where gold will go next, to $1000/oz or to $1200/oz.
As you are probably aware Peter Grandich has recently doubled his bet with this release:
Posted by Peter Grandich at 8:25 PM on Sunday, February 21st, 2010
Hello Perma Bears!!! I’m doubling my wager to $100,000 and its good for the next 72 hours.
I hope they can learn of my offer before they head for the hills.
Well, our readership voted 75% in favour of gold prices reaching $1200/oz first and so they are the victors, which is pleasing to us as it shows that our readership is well and truly switched on to just what is going on, well done to you, the team.
Stay on your toes as things are really warming up and opportunities will arrive thick and fast so we must be wide awake and ready to move once they have been identified.
As for today, well have a truly sparkling time.
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.
Over on our sister site, silver-prices.net we 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.
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For the analysis of a recent options trade that we have just closed please click this link.
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