Gold Prices Update 06 June 2010

A crazy end to the day with the DOW losing 323 points, the S&P 500 down 38 points, Silver down $0.55/oz, the USD up 1.05, gold prices up $13.00/oz and the HUI down 9.89. So we have gold and the dollar heading north arm in arm, but the associated mining stocks headed south arm in arm with the DOW. Silver managed to ignored gold and fell out of bed all by itself.

Worse than expected jobs numbers out the States were credited with the fall in the broader markets, Hungary joined the list of European countries requiring life support, so the euro continues to oscillate, as though looking for a final resting place. A number of countries came in to support the euro, including China, the support being based on the premise that there is nowhere else to go! Well Iran thinks otherwise as the Iranian central bank has announced that it will sell 45 billion euros from its foreign exchange reserves to buy dollars and gold, China's official Xinhua news agency reported on Wednesday, citing unspecified Iranian media reports. Xinhua said that the sales would be conducted in three stages and that the first had already begun, citing unnamed sources. It also said that other Gulf states had also started cutting their euro holdings. So, not everyone is sticking around in the hope that all will come right in eurozone.



It appears to us that more and more governments will recognize that gold prices are heading higher and that they in turn will want more and more of their wealth placed in the sector that is outperforming all others. As gold challenges and overcomes its previous historic high we hope to see the stocks catch fire and move ahead with some gusto. We are still of the opinion that the USD is a flawed currency, however, at the moment it is considered to be the best of a bad bunch and is enjoying its moment in the sunshine. When the dollar turns down there will be little in the way of choice left for any government officials with half a brain and the metals will sparkle beyond belief.



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.

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.





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.

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Comments

[S]

I would be grareful if you could tell us what the tax consequences of selling the new Eric Sprott (ETF) PHYS are. I understand that you can if you choose request the bullion even though it is taxed like an equity. I imagine if one obtained the bullion it would then be taxed as bullion? How could one learn the true atax specifics of this? (Someone told me Eric Sprott worked out some kind of special with the government. It does not seem likely) Thanks,

[Gold Prices]

S,

Sorry, but we cannot help you with this one as we are not financial advisers and certainly not experts on the tax regime in the United states. You could contact Eric Sprott and put your questions to him and also consult with a qualified financial advisor in your locality.

[Di]

yes, gold might test 1250 again, after friday's up candle. but this is very strong resistance. i was thinking to put a very small short on gold next week. maybe i will, we'll see.

[Roger Levinson]

Yes, wonderful idea to go short of gold, quickest way to bankruptcy imaginable. The facts are that awareness that fiat paper currencies are little better than wall paper are becoming increasingly apparent. A rush for gold is just beginning so anyone who wants to go short, well good luck. Anyone remember those old films when the rich fellow lit up his cigar with dollar bills in order to show off his wealth? Well, soon everyone who is still foolish enough to smoke will be doing that with Dollars, Euros and Sterling since there will be nothing better to do with these soon to become worthless bits of paper.

[Warren]

I read more than one article a day. I read both sides of the coin,so to speak. I am not a crazy, nor do I panic when crap happens. I am not rich in a monetary sense, yet have friends who are. I am not broke, (house and property paid for) yet have friends who have little. I think I'm fairly average. So why do I have this feeling that the world's economic future is not going to be salvaged? I don't think I'm a pessimist but, I don't see a cure or recovery for a long, long time, and I think it will get a lot worse in years to come.
I believe this is meant to happen. Sorry to ruin your,I can fix anything mood, but, no matter how smart mankind thinks itself to be; there will always be one more hurdle, and many will flag before the end of the course. I wonder what the G8, G20, or whatever it is, will come up with. I'm sure it will be a message of inspiration for some. However, ask yourself this question. When has any politician ever told the complete truth? Bye for now.

[K]

Indigestion in all of the markets, even PM's. Yikes!