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« Major Policy Shift Ahead | Main | 51 CONSECUTIVE WINNING TRADES from SK OptionTrader »

Gold prices nudge through $1500.00/oz

Gold futures closed at a record Tuesday after bouncing off $1,500 an ounce, getting a lift from a weaker dollar and longer-running worries about debt-strapped developed markets.

Copper and other metals, which started the day on firmer ground, held their gains after getting a boost from housing-starts data.

Gold for June delivery GCK11 +0.65% ended up $2.20 an ounce, or 0.2%, at $1,495.10 an ounce on the Comex division of the New York Mercantile Exchange.

Earlier, gold rallied as high as $1,500.50 an ounce, according to the CME Group website, an intraday record for the metal.

Prices had dipped in and out of the red before floor trading began and continued to waver early in the session.

But investors, particularly long-term buyers, have shown a tendency to take advantage of short-term pullbacks, noted Bill O’Neill, managing partner at Logic Advisors.

“On every dip, trade is consistently buying on weakness,” said O’Neill.

The session’s rise to a record came against a backdrop that’s proved nearly irresistible to gold buyers — threats against Europe’s shared currency as Portugal, Greece and Ireland seek financial aid; rising global inflation; and on Monday, Standard & Poor’s decision to cut its outlook on the U.S. sovereign rating.

For some buyers, a main reason to invest in gold is the fear that government debt is spinning out of control, lowering the value of the dollar or other major reserve currencies, such as the euro. On Monday, gold futures also closed at a record after S&P cut the U.S. credit-rating outlook, briefly weighing on the dollar.

“The dollar is vulnerable. It is in a precarious position. Oil is trading near $108 and the same worries over the economy are resurfacing,” said Charles Nedoss, a senior market strategist at Olympus Futures.

The dollar index DXY -0.58% , which measures the greenback against a basket of six currencies, fell to 75.078, down from 75.504 late Monday. Read about the dollar’s retreat weighing on the dollar, the euro recovered after sharp retreat Monday, when it was beset by speculation over a possible Greek restructuring and after an election in Finland showed strong support for an anti-euro political party.

Silver continued to rally to 31-year highs, with the May contract SIK11 +2.36% adding 96 cents, or 2.2%, to $43.913 an ounce.

Other metals traded higher Tuesday, helped by a Commerce Department report showing housing starts rising a more-than-expected 7.2% in March.

We didn't manage to hold above the $1500.00/oz level as gold prices slipped back a tad later in the trading session on the NYSE, but still another super day for gold bugs.


Over in the Options pit, our model portfolio has managed an average return of 40.51% per trade, 70 closed trades, 68 closed at a profit, or a 97.14% success rate. Average trade open for 42.21 days.

sk charts 19 April 2011.JPG

The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

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Stay on your toes and have a good one.

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