It is always very tough to stay long during these sharp corrective periods in the PM complex. This is why very few futures traders make money in PM bull markets because the bull kicks them off at every sharp turn. The main reason why I try to maintain focus and confidence in the trend is that no other futures market in the US offers the type of upside potential in the coming months as gold and silver does. So yes, if I suffer some drawdown for the time being then I can handle it as I have done before in the past. When gold is trading over $1000 early next year for the ZGG8, then it really won't matter. If one trys to trade this phase of the bull market, then I would expect sub-par results compared to taking a position and just sticking with it. In this environment, I just can't imagine significantly lower PM prices. The DX would have to stage a very solid upside rally and I don't believe that this is in the offing especially since the Fed has embarked on a new rate cutting campaign this year...
So what happens if gold falls to 700, are yo u gonna buy more, or do you have emergency stops higher than that?
John Embry of Sprott Asset on junior gold miners: "I can’t think of a better time to buy juniors; it is one of the very best times. I think the best time was at the bottom in 2000 and 2001. But given where the gold price has come and the way some of these juniors are trading, I think we’re being presented with another unbelievable opportunity. I’d be really shocked if my fund didn’t at least double over the next 12 months. And I think it’s going to be good in all currencies in the next 12 months. That will be my final word. (11/29/07)" Embry's fund is one of the best performing PM fund mangers for several years now and he predicts a further 100% increase in the NAV... http://silverstrategies.com/story.aspx?local=0&id=10063
Both gold and silver have higher Asian bids and is going stronger into Europe. Near-term support looks pegged at 780 on gold and 13.80-14.00 on silver. Resistance is 795-800 on gold now as well. 76 on the DX looks like resistance as the UAE peg situation becomes noticed more now...
Well, for the record, I'm long gold, too. I thought it might hit the 50 MA, there, but looks like it got close enough and buyers stepped in. There are just too many people/central bankers trying to exit dollars quietly anymore. As each of the pegs fall, gold will be the benefactor because the other currencies can't be allowed to rise without having a negative effect on the economies involved.
I think Gold will gain this week as it tested support, and bounced. Furthermore, it could gain by default if a few more central banks cut rates a la BOC today.
What I anticipated to happen is actually happening now. Both gold and silver are holding very solidly right at the 50DMA on the cash charts. Per my comment the other night, 780 on gold and 13.90 is now strong support on the metals and I plan to stay in as long as the metals do not have a NY close under these levels.. A metals bull is not an easy market to trade and therefore traders need to look for strong support areas to build positions upon. I believe that we will see one more opportunity in late Feb./early March before the final leg tops out in the early Summer. Prepare yourselves accordingly if want to win big....
BTW, I also entered into a few platinum contracts as well (PLF8) which technically looks even better than gold/silver but of course will have less upside potential. Investment and jewelry demand continues to outstrip supply and the SA situation with NUM continues unabated. I believe PL will close out the year over 1500 imo...
Damn gold fell $10 today, on ADP figures and general dollar strength. Downside looks inevitable here.