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For the first time since December, the precious metal markets have become frothy. That suggests a correction is possible. But the upside breakaway gap in silver here in Europe this morning suggests there is still a lot of buying power underneath the market. So will there be a correction in the metals? No one knows, so the only thing we need to do for now is tighten up our stops to protect profits and watch to see what unfolds.
Gold
1) Long two positions from $1339.60 bought on the Comex spot gold close on February 1, 2011. Stop-out point: sell both positions at an intraday stop-out point if Comex spot gold trades at $1388.00. (updated 7 March 2011)
2) Long from $1352.30 bought on the Comex spot gold close on February 3, 2011. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1396.00. (updated 7 March 2011)
3) Long from $1372.25 bought on the London AM fix on February 15, 2011. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1404.00. If stopped out, then re-buy this position on the first Comex spot price close above $1412.00. (updated 7 March 2011)
Silver
1) Long from $28.45 bought on February 3, 2011. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $33.88. (updated 7 March 2011)
2) Long from $28.91 bought on the February 4th London silver fix. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $35.02. (updated 7 March 2011)
3) Long from $33.804 bought on the February 28th Comex spot silver close. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $35.86. If stopped out, then re-buy if the Comex spot price the same day trades above $36.50. (updated 7 March 2011)
Gold/Silver Ratio – traders are short the ratio (i.e., long silver and short an equal dollar value of gold) from 67.4, the June 11, 2010 close in New York. Stop-out point: unwind this position if the ratio closes in New York above 45.2. (updated 7 March 2011) View all Trading Comments >>
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