The dash from $1425/oz to $1563/oz came to a halt today on news that is perceived to be good for the USD. The technical indicators are firmly in the overbought zone so a breather was on the cards. Note that the RSI had peaked well above the '70' level and has now come back slightly, to sit at 73.50, still oversold, so this correction may continue for a few more days.
Apart from the chart status of gold prices there have also been not one, but two events that have played their part in capping golds progress. The first is the announcement by President Obama, that Osama Bin Laden has been killed. This initially gave the US Dollar a much needed boost with the oscillations continuing as we write. The bounce by the dollar had a negative effect in gold and so gold prices have corrected by around $20/oz, which is nothing to write home about. This news item is a one off event and will soon pass with the spotlight being re-focused on the plight of the dollar.
The second event was market intervention by the powers that came in the form of a rule change regarding the purchase of silver as follows:
Investors in the standard '5,000 Ounce Silver Futures Contract', had the initial deposit required to purchase a contract increase to $12,825 from $11,745.
This rule change is in effect a margin call for for those investors who own silver futures contracts, so they had to either put up more cash or reduce their exposure by selling some of their contracts. This is not a one time event as the rules can be changed at a moments notice as we have experienced in the past. However, the effect on silver prices, a $4.00/oz correction, also casts a shadow on gold prices as any market intervention creates an air of uncertainty for all concerned.
For now we will allow the dust to settle and look to see if there is a bargain of a buying opportunity out there somewhere.
Today we are pleased to report that www.skoptionstrading.com has closed another two trades for profits of 108.52% and 116.67% respectively.
Over in the Options pit, our model portfolio has achieved an average return of 42.10% per trade, 76 closed trades, 74 closed at a profit, or a 97.36% success rate. Average trade open for 45.30 days.
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So, the question is: Are you going to make the decision to join us today.
Stay on your toes and have a good one.
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