Trading, Investing & Saving

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Current Trading Positions

Trading Comments, 7 June 2013 (posted 15h00 CET):

So far the low in gold and silver reached on May 20th is holding. The upside reversal that day showed real underlying strength, and may therefore have marked a selling climax. It will be interesting to see how today unfolds after the US jobs number just reported. If strength develops toward the end of the day, traders should buy.

Gold
1) Buy one position if the Comex spot gold price trades at $1,414.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

2) Buy one position on the first Comex close in New York above $1,420.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) Buy one position if the Comex spot silver price trades at $22.70.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades subsequently at $22.28.

2) Buy one position on the first Comex close in New York above $23.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York more than 50¢ below your purchase price.

Gold/Silver Ratio – On May 10, 2013 traders sold the ratio sold (they bought silver and sold an equal dollar amount of gold) at 60.8.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 63.2.

Comex options (options are high-risk and therefore not for everyone):

On May 10, 2013 traders bought the Comex gold 1500 call at $49.50. To reduce their cash outlay they sold at $22.60 the Dec’13 Comex gold 1600 call bought at $54.70 on April 4, 2013.

On May 10, 2013 traders bought the Dec’13 Comex silver 24 call at $1.654. To reduce their cash outlay they sold at $0.512 the Dec’13 Comex silver 28 call bought at $1.528 on April 4, 2013.

Hold these calls without any stop-out point.

Trading Comments, 10 May 2013 (posted 10h30 CET):

Traders have been on the sidelines because there is nothing to do from a trading perspective. But I assume that everyone continues to follow my longstanding strategy of buying physical metal through a regular monthly accumulation plan.  You are picking up some very undervalued metal here.

After the big price drop last month, I have been waiting to see whether the precious metals form a “V” or a “W” bottom. At the moment, gold looks like the former and silver the latter. We’ll see how it plays out, but in the meantime, I recommend buying a breakout from the current trading range.

It is a risky strategy in the price manipulated market in which we are trading. Note how the shorts and central planners gunned for stops above the market in early April before taking gold and silver prices lower. They may try the same thing now, but then again, this time they may not be successful in their price manipulations. As I always say, no one can predict the future.

Gold
1) The position bought on the Comex close in New York on April 9, 2013 at $1586.20 was sold at $1556.20 on April 10, 2013, which was its stop-out point. Loss: $30.00

2) The position bought on April 5, 2013 at $1,562.00 was sold at $1564.00 on April 10, 2013, which was its stop-out point. Profit: $2.00
 
3) The position bought on April 4, 2013 at $1578.00 was sold at $1564.00 on April 10, 2013, which was its stop-out point. Loss: $14.00

4) The position bought on April 4, 2013 at $1546.00 was sold at $1548.00 on April 12, 2013, which was its stop-out point. Profit: $2.00

5) Buy one position if the Comex spot gold price trades at $1,484.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

6) Buy one position on the first Comex close in New York above $1,478.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought on the Comex close in New York on April 9, 2013 at $27.866 was sold at $27.366 on April 12, 2013, which was its stop-out point. Loss: 50.0¢

2) The position bought on April 9, 2013 at $27.50 was sold at $27.18 on April 12, 2013, which was its stop-out point. Loss: 32.0¢

3) The position bought on April 5, 2013 at $27.15 was sold at $26.94 on April 12, 2013, which was its stop-out point. Loss: 21.0¢

4) The position bought on April 4, 2013 at $26.78 was sold at $26.80 on April 12, 2013, which was its stop-out point. Profit: 2.0¢

5) Buy one position if the Comex spot silver price trades at $24.45.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades subsequently at $24.18.

6) Buy one position on the first Comex close in New York above $24.14.  Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York more than 50¢ below your purchase price.

Gold/Silver Ratio – On April 18, 2013 traders unwound at 59.9 the ratio sold on April 4, 2013 at 58.0. The loss was 1.4 ticks, or 2.4%.

I recommend that traders sell the ratio (buy silver and sell an equal dollar amount of gold) at the market (I will use today’s Comex close for record keeping).  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 63.2.

Comex options (options are high-risk and therefore not for everyone):
I recommend that traders again roll down their calls to lower strikes. Sell the existing calls to reduce the purchase price of the new call being purchased. I’ll use today’s closing Comex prices in New York for record keeping.

Buy the Dec’13 Comex 1500 gold call at the market. Sell the Dec’13 Comex 1600 gold call.

Buy the Dec’13 Comex 24 silver call at the market. Sell the Dec’13 Comex 28 silver calls.

Hold these calls without any stop-out point.

Trading Comments, 6 April 2013 (posted 16h30 CET):

We got the downward spike just before the US unemployment report, which was quickly followed by an upside reversal in precious metal prices. All we need now is to see some upside follow-through.

Gold
1) Long one position bought on April 4, 2013 at $1546.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1548.00.

2) Long one position bought on April 5, 2013 at $1,562.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades subsequently at $1,564.00.

3) Long one position bought on April 5, 2013 at $1,578.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades subsequently at $1,564.00.

4) Buy one position on the first Comex close in New York above $1,584.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) Long one position bought on April 4, 2013 at $26.78.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $26.80.

2) Long one position bought on April 5, 2013 at $27.15.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades subsequently at $26.94.

3) Buy one position if the Comex spot silver price trades at $27.50.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades subsequently at $27.18.

4) Buy one position on the first Comex close in New York above $27.60.  Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York more than 50¢ below your purchase price.

Gold/Silver Ratio – On April 4, 2013 traders sold the ratio (bought silver and sold an equal dollar amount of gold) at 58.0.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 59.4.

Comex options (options are high-risk and therefore not for everyone):
On April 4, 2013 traders bought the Comex 1600 gold call at $54.70. To reduce their cash outlay they sold at $14.20 each the two Dec’13 Comex 1800 gold calls previously purchased, one of which was bought at $48.80 on January 31, 2013 and the other bought at $31.80 on February 15, 2013.

On April 4, 2013 traders bought the Dec’13 Comex 28 silver call at $1.528. To reduce their cash outlay they sold at $0.232 each the two Dec’13 Comex 35 silver calls previously purchased, one of which was bought at $1.603 on January 31, 2013 and the other bought at $1.046 on February 15, 2013.

Hold these calls without any stop-out point.

Trading Comments, 4 April 2013 (posted 14h15 CET):

Traders have been on the sidelines watching this carnage in the precious metals. Hopefully, long-term accumulators have been scooping up the precious metals at these cheap prices. Like so many other downdrafts in this 12-year precious metal bull market, this one too will eventually be history and forgotten.

Both gold and silver have now reached an extremely oversold condition. A bounce is long overdue, and traders should plan to participate in it. I recommend leaving the sidelines.

Gold and silver have held support around current levels for two years. Given that they remain undervalued and are useful because physical metal does not have counterparty risk, it is logical that support will hold again. So we may be at – or least near – an important bottom.

One word of warning to traders. The US unemployment report to be released tomorrow may create a lot of volatility. Any downward spike will likely mark the final low of this long correction if it is quickly followed by upside reversal in precious metal prices.

Gold
1) The position bought at $1584.00 on March 4, 2013 was sold on March 18, 2013 at $1567.00, which was its stop-out point. Loss: $17.00

2) The position bought at $1605.00 on March 17, 2013 was sold on March 18, 2013 at $1597.00, which was its stop-out point. Loss: $8.00

3) Buy one position at the market.  Gold is presently trading at $1546.00, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1532.00.

4) Buy one position if the Comex spot gold price trades at $1,562.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades subsequently at $1,546.00.

5) Buy one position if the Comex spot gold price trades at $1,578.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades subsequently at $1,564.00.

6) Buy one position on the first Comex close in New York above $1,584.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought on the Comex close at $29.10 on March 8, 2013 was sold on March 11, 2013 at $28.80, which was its stop-out point. Loss: 30¢

2) The position bought at $28.65 on March 1, 2013 was sold on March 28, 2013 at $28.20, which was its stop-out point. Loss: 45¢

3) Buy one position at the market.  Silver is presently trading at $26.78, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $26.57.

4) Buy one position if the Comex spot silver price trades at $27.15.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades subsequently at $26.80.

5) Buy one position if the Comex spot silver price trades at $27.50.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades subsequently at $27.18.

6) Buy one position on the first Comex close in New York above $27.60.  Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York more than 50¢ below your purchase price.

Gold/Silver Ratio – On March 22, 2013 traders unwound at 56.03 the ratio sold at 55.0 at February 21, 2013.  The loss was 1.03 points. I recommend putting this trade back on today.

Traders should sell the ratio (buy silver and sell an equal dollar amount of gold).  I’ll use today’s NY close for recordkeeping.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 59.4.

Comex options (options are high-risk and therefore not for everyone):
The Mar’13 Comex 32 silver call bought at $1.474, the November 5, 2012 expired out of the money.

Long the Dec’13 Comex 1800 gold call from $48.80, the January 31, 2013 Comex close.
Long the Dec’13 Comex 35 silver call from $1.603, the January 31, 2013 Comex close.

Long the Dec’13 Comex 1800 gold call from $31.80, the February 15, 2013 Comex close.
Long the Dec’13 Comex 35 silver call from $1.046, the February 15, 2013 Comex close.

Buy the Dec’13 Comex 1600 gold call at the market. Sell the two Dec’13 Comex 1800 gold calls, which will reduce the purchase price of this new call.

Buy the Dec’13 Comex 28 silver call at the market. Sell the two Dec’13 Comex 35 silver calls, which will reduce the purchase price of this new call.

I’ll use today’s NY close for recordkeeping for these option recommendations.

Trading Comments, 1 March 2013 (posted 10h45 CET):

Traders are again on the sidelines waiting for the elusive bottom to arrive. Gold and silver are selling at bargain basement prices. So today may be the day, but only time will tell. I recommend buying on strength as key technical levels are hurdled.

Gold
1) The position bought at $1582.0 on February 21, 2013 was sold on February 28, 2013 at $1592.00, which was its stop-out point. Profit: $10.00

2) The position bought at $1568.50 on February 21, 2013 was sold on February 28, 2013 at $1578.00, which was its stop-out point. Profit: $9.50

3) Buy one position if the Comex spot gold price trades at $1,584.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades subsequently at $1,567.00.

4) Buy one position if the Comex spot gold price trades at $1,605.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades subsequently at $1,597.00.

5) Buy one position on the first Comex close in New York above $1,622.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought on the Comex close at $28.983 on February 25, 2013 was sold on February 27, 2013 at $29.03, which was its stop-out point. Profit: 4.7¢

2) The position bought at $28.70 on February 21, 2013 was sold on February 27, 2013 at $28.86, which was its stop-out point. Profit: 16.0¢

3) The position bought at $28.51 on February 21, 2013 was sold on February 28, 2013 at $28.72, which was its stop-out point. Profit: 21.0¢

4) Buy one position if the Comex spot silver price trades at $28.65.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades subsequently at $28.20.

5) Buy one position if the Comex spot silver price trades at $29.10.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades subsequently at $28.80.

6) Buy one position on the first Comex close in New York above $29.32.  Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York more than 50¢ below your purchase price.

Trading Comments, 27 February 2013 (posted 11h30 CET):

It looks like the precious metals are turning the corner, but we are not quite there yet. There may be more backing-and-filling.

Whether the current rally is just a relief rally from oversold levels or something that will prove more long-lasting has yet to be determined. But given that gold and silver are selling at bargain basement prices as well as Mr Bernanke restating in Congressional testimony yesterday his love affair with QE, the odds are improving that the low is in place. Continue to buy on strength as key technical levels are hurdled.

Gold
1) Long one position bought at $1568.50 on February 21, 2013.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1578.00.

2) Long one position bought at $1582.0 on February 21, 2013.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1592.00.

3) Buy one position if the Comex spot gold price trades at $1,622.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades subsequently at $1,597.00.

4) Buy one position on the first Comex close in New York above $1,622.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

5) Buy one position on the first Comex close in New York above $1654.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) Long one position bought at $28.51 on February 21, 2013.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.72.

2) Long one position bought at $28.70 on February 21, 2013.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.86.

3) Long one position bought on the Comex close at $28.983 on February 25, 2013.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.03.

4) Buy one position if the Comex spot silver price trades at $29.48.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades subsequently at $29.10.

5) Buy one position on the first Comex close in New York above $29.32.  Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York more than 50¢ below your purchase price.

Gold/Silver Ratio – On February 21, 2013 traders sold the ratio (they bought silver and sold an equal dollar amount of gold) on the Comex close at 55.0.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 56.0.

Trading Comments, 21 February 2013 (posted 12h15 CET):

The metals are at bargain basement prices and due for a huge bounce. We were stopped out on a couple of attempts to pick a bottom. At these prices it is worth trying again. The more important point though is to load up on strength as key technical levels are hurdled.

Gold
1) The position bought at $1613.80 on February 19, 2013 was sold February 20, 2013 at $1597.00, which was its stop-out point. Loss: $16.80.

2) Buy one position at the market.  Gold is presently trading at $1568.50, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1554.00.

3) Buy one position if the Comex spot gold price trades at $1,582.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades subsequently at $1,563.00.

4) Buy one position if the Comex spot gold price trades at $1,622.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades subsequently at $1,597.00.

5) Buy one position on the first Comex close in New York above $1,622.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

6) Buy one position on the first Comex close in New York above $1654.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought at $30.001 on February 19, 2013 was sold the same day at $29.78, which was its stop-out point. Loss: 22.1¢

2) Buy one position at the market.  Silver is presently trading at $28.51, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.27.

3) Buy one position if the Comex spot silver price trades at $28.70.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades subsequently at $28.42.

4) Buy one position on the first Comex close in New York above $28.80.  Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York more than 50¢ below your purchase price.

Gold/Silver Ratio – On February 20, 2013 traders unwound the ratio sold at 53.0 at January 31, 2013.  The loss was 3.2 points. I recommend putting this trade back on today.

Traders should sell the ratio (buy silver and sell an equal dollar amount of gold).  I’ll use today’s NY close for recordkeeping.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 56.0.

Trading Comments, 19 February 2013 (posted 09h30 CET):

Friday capped a brutal week, but don't let that discourage you. It's time to buy.

Gold
1) The position bought at $1627.50 on February 15, 2013 was sold the same day at $1607.50, which was its stop-out point. Loss: $22.00.

2) Buy one position at the market.  Gold is presently trading at $1613.80, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1597.00.

3) Buy one position if the Comex spot gold price trades at $1,622.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades subsequently at $1,597.00.

4) Buy one position on the first Comex close in New York above $1,654.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

5) Buy one position on the first Comex close in New York above $1685.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought at $30.22 on February 15, 2013 was sold the same day at $29.95, which was its stop-out point. Loss: 24.0¢

2) Buy one position at the market.  Silver is presently trading at $30.01, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.78.

3) Buy one position if the Comex spot silver price trades at $30.20.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades subsequently at $29.92.

4) Buy one position on the first Comex close in New York above $31.10.  Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York more than 50¢ below your purchase price.

Gold/Silver Ratio – On January 31, 2013 traders sold the ratio (they bought silver and sold an equal dollar amount of gold) at 53.0.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 54.8.

Comex options (options are high-risk and therefore not for everyone):
Long one Mar’13 Comex 32 silver call from $1.474, the November 5, 2012 Comex close.

Long the Dec’13 Comex 1800 gold call from $48.80, the January 31, 2013 Comex close.
Long the Dec’13 Comex 35 silver call from $1.603, the January 31, 2013 Comex close.

Long the Dec’13 Comex 1800 gold call from $31.80, the February 15, 2013 Comex close.
Long the Dec’13 Comex 35 silver call from $1.046, the February 15, 2013 Comex close.

Hold all these calls without any stop-out point, but sell the Mar option on expiry if in the money.

Trading Comments, 15 February 2013 (posted 11h30 CET):

The metals are in another test of support, which is not only unexpected but frustrating. But with each passing day, we draw nearer to the upside breakout from the trading range in which the precious metals have been mired.

Gold
1) The position bought at $1670.60 on January 31, 2013 was sold on the Comex close on February 11, 2013 at $1648.20, which was its stop-out point. Loss: $22.40.

2) The position bought at $1669.40 on the Comex close on February 1, 2013 was sold on the Comex close on February 11, 2013 at $1648.20, which was its stop-out point. Loss: $21.20.

3) Buy one position at the market.  Gold is presently trading at $1627.50, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1607.50.

4) Buy one position if the Comex spot gold price trades at $1,654.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades subsequently at $1,622.00.

5) Buy one position on the first Comex close in New York above $1,685.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

6) Buy one position on the first Comex close in New York above $1702.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought at $31.942 on the Comex close on February 1, 2013 was sold on the Comex close on February 11, 2013 at $30.895, which was its stop-out point. Loss: $1.047.

2) The position bought at $31.58 on February 7, 2013 was sold on the Comex close on February 11, 2013 at $30.895, which was its stop-out point. Loss: 68.5¢

3) Buy one position at the market.  Silver is presently trading at $30.22, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.95.

4) Buy one position if the Comex spot silver price trades at $31.10.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades subsequently at $30.62.

5) Buy one position on the first Comex close in New York above $31.25.  Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York more than 50¢ below your purchase price.

Gold/Silver Ratio – On January 31, 2013 traders sold the ratio (they bought silver and sold an equal dollar amount of gold) at 53.0.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 56.0.

Comex options (options are high-risk and therefore not for everyone):
Long one Mar’13 Comex 32 silver call from $1.474, the November 5, 2012 Comex close.

Long the Dec’13 Comex 1800 gold call from $48.80, the January 31, 2013 Comex close.
Long the Dec’13 Comex 35 silver call from $1.603, the January 31, 2013 Comex close.

Buy the Dec’13 Comex 1800 gold call at the market. Buy the Dec’13 Comex 35 silver call at the market. I’ll use today’s NY close for recordkeeping.

Hold all these calls without any stop-out point, but sell the Mar option on expiry if in the money.

Trading Comments, 5 February 2013 (posted 11h15 CET):

The metals had a slow start to the year, but that is about to change. Central bank money printing is boosting stock markets, oil and other commodities. Note that the yield on the 10-year T-note is above 2%. Gold and silver are ready to start climbing higher.

Gold
1) Long one position bought at $1670.60 on January 31, 2013. Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York below $1657.50.

2) Long one position bought at $1669.40 bought on the Comex close on February 1, 2013. Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York below $1657.50.

3) Buy one position if the Comex spot gold price trades at $1,685.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $28.00 below your purchase price.

4) Buy one position on the first Comex close in New York above $1702.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) Long one position bought at $31.942 bought on the Comex close on February 1, 2013. Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York below $31.28.

2) Buy one position at $31.58.  Stop-out point: sell if Comex spot silver closes in New York below $31.28.

3) Buy one position if the Comex spot silver price trades at $32.25.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 55¢ below your purchase price.

4) Buy one position on the first Comex close in New York above $32.40.  Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York more than 50¢ below your purchase price.

Gold/Silver Ratio – On January 31, 2013 traders sold the ratio (they bought silver and sold an equal dollar amount of gold) at 53.0.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 56.0.

Trading Comments, 1 February 2013 (posted 11h00 CET):

I mentioned the possibility of one more test of support at $1650 and $31. We got it.

Today is the day to buy, but there are two possibilities – either around the time the unemployment number is released, or on the New York close. My guess is the former because I expect the gold cartel will gun for stops under $1650 with the volatility normally accompanying the release of the unemployment data. But the simplest thing to do is to buy strength if we get it during the day, or the NY close if we don’t.

Gold
1) Long one position bought at $1670.60 on January 31, 2013. Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York below $1657.50.

2) Buy one position at $1642.  Stop-out point: sell if Comex spot gold closes in New York below $1622.00. If not filled during the day, then buy today’s Comex close. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $28.00 below your purchase price.

3) Buy one position if the Comex spot gold price trades at $1,685.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $28.00 below your purchase price.

4) Buy one position on the first Comex close in New York above $1702.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought at $31.91 on January 31, 2013 was sold the same day at $31.62, which was its stop-out point. Loss: 29.0¢

2) Buy one position at $30.88.  Stop-out point: sell if Comex spot silver closes in New York below $30.40. If not filled during the day, then buy today’s Comex close. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price.

3) Buy one position if the Comex spot silver price trades at $32.25.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 55¢ below your purchase price.

4) Buy one position on the first Comex close in New York above $32.40.  Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York more than 50¢ below your purchase price.

Gold/Silver Ratio – On January 31, 2013 traders sold the ratio (they bought silver and sold an equal dollar amount of gold) at 53.0.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 56.0.

Comex options (options are high-risk and therefore not for everyone):
Long one Mar’13 Comex 32 silver call from $1.474, the November 5, 2012 Comex close.

Long the Dec’13 Comex 1800 gold call from $48.80, the January 31, 2013 Comex close.
Long the Dec’13 Comex 35 silver call from $1.603, the January 31, 2013 Comex close.

Hold all these calls without any stop-out point, but sell the Mar option on expiry if in the money.

Trading Comments, 31 January 2013 (posted 15h00 CET):

The last several weeks have been good ones for everyone who has a long-term cost-averaging plan for accumulating the precious metals because prices over this period have been exceptionally low. And the bull market in gold and silver (and bear market in fiat currencies) remains intact. I therefore continue to recommend that everyone save money by accumulating physical precious metals.

Traders have been on the sidelines. But traders can again look to start building a position. This year is starting off like last year, with the low in prices made early in January. But one more test of support at $1650 and $31 is possible.

Gold
1) The position bought at $1,714.10 on the Comex close on November 6, 2012 was sold on December 4, 2012 at $1693.90, which was its stop-out point. Loss: $20.20

2) The position bought at $1,692.00 on November 6, 2012 was sold on December 4, 2012 at $1693.90, which was its stop-out point. Profit: $1.90

3) The position bought at $1,679.50 on November 6, 2012 was sold on December 5, 2012 at $1687.90, which was its stop-out point. Profit: $8.40

4) Buy one position at the market.  Gold is presently trading at $1670.60, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1657.50.

5) Buy one position if the Comex spot gold price trades at $1,685.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $28.00 below your purchase price.

6) Buy one position on the first Comex close in New York above $1702.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought at $30.945 on November 5, 2012 was sold December 18, 2012 at $31.799, which was its stop-out point. Profit: 85.4¢

2) The position bought at $31.25 on November 6, 2012 was sold December 18, 2012 at $31.799, which was its stop-out point. Profit: 54.9¢

3) Buy one position at the market.  Silver is presently trading at $31.91, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.62.

4) Buy one position if the Comex spot silver price trades at $32.25.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 55¢ below your purchase price.

5) Buy one position on the first Comex close in New York above $32.40.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 50¢ below your purchase price.

Gold/Silver Ratio – Traders unwound at 55.5 on December 20, 2012 the ratio they sold at 54.1 on November 5, 2012. The loss was 1.4 ticks, or 2.6%.

Traders should sell the ratio (buy silver and sell an equal dollar amount of gold).  I’ll use today’s NY close for recordkeeping.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 56.0.

Comex options (options are high-risk and therefore not for everyone):
The Dec’12 Comex 1800 and 2000 gold calls and the Feb’13 Comex 1800 gold call expired out of the money. The Dec’12 Comex 40 silver calls expired out of the money.

The Dec’12 Comex 32 silver call bought at $1.527 on the May 11, 2012 Comex close was sold at expiry at $1.981. Profit: 45.4¢

Long one Mar’13 Comex 32 silver call from $1.474, the November 5, 2012 Comex close.

Buy the Dec’13 Comex 1800 gold call at the market. Buy the Dec’13 Comex 35 silver call at the market. I’ll use today’s NY close for recordkeeping.

Hold all these calls without any stop-out point, but sell the Mar option on expiry if in the money.

Trading Comments, 18 November 2012 (posted 15h30 CET):

There may be an opportunity to add to our trading positions this week or next by buying any dips that may develop as we approach the expiration of December options.  For now, I just recommend watching and waiting.

1) Long one position bought at $1679.50 on November 5, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1688.00.

2) Long one position bought at $1,692.00 on November 6, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1694.00.

3) Long one position bought at $1,714.10 on the Comex close on November 6, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1694.00.

Silver
1) The position bought at $32.019 on the Comex close in New York on November 6, 2012 was sold the next day at $31.519. Loss: 50.0¢

2) Long one position bought at $30.945 on November 5, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $31.80.

3) Long one position bought at $31.25 on November 6, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $31.80.

Gold/Silver Ratio – Traders sold the ratio (they bought silver and sold an equal dollar amount of gold) at 54.1 on the Comex close on November 5, 2012.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 54.6.

Comex options (options are high-risk and therefore not for everyone):
On the Comex close on November 5, 2012, traders bought the Feb’13 Comex 1800 gold call at $13.60 and the Mar’13 Comex 32 silver call at $1.474.

Long one Dec’12 Comex 2000 gold call from $54.00, the January 3, 2012 Comex close.
Long one Dec’12 Comex 1800 gold call from $59.70, the March 15, 2012 Comex close.
Long one Feb’13 Comex 1800 gold call from $44.20, the May 11, 2012 Comex close.

Long one Dec’12 Comex 40 silver call from $1.761, the January 3, 2012 Comex close.
Long one Dec’12 Comex 40 silver call from $1.635, the March 15, 2012 Comex close.
Long one Dec’12 Comex 32 silver call from $1.527, the May 11, 2012 Comex close.

Hold all these calls without any stop-out point, but sell the Dec options on expiry if in the money.

Trading Comments, 5 November 2012 (posted 08h15 CET):

The black-box trend followers, which have had their pockets picked time and again, look like they are going to be chopped up with another whip-saw. The precious metals are probably at a low, meaning they will soon reverse and head higher from here. So it’s time to buy to again to start re-building a position.

We have been stopped out of all of our positions. We’ve taken some good profits on both gold and silver that will more than compensate us for the losses that we are likely to take on the Dec’12 options. But I do not recommend selling these options – at least not yet.

Gold
1) The position bought at $1794.10 on the Comex close on October 4, 2012 was sold on October 9, 2012 at $1764.00, which was its stop-out point.  Loss: $30.10

2) The position bought at $1639.90 Comex close in New York on August 21, 2012 was sold at $1731.90 on October 19, 2012, which was its stop-out point. Profit: $92.00

3) The position bought at $1669.60 Comex close in New York on August 23, 2012 was sold at $1731.90 on October 19, 2012, which was its stop-out point. Profit: $62.30

4) The position bought at $1598.00 on July 25, 2012 was sold at $1711.90 on October 23, 2012, which was its stop-out point. Profit: $113.90

5) The position bought at $1592.00 on August 3, 2012 was sold at $1711.90 on October 23, 2012, which was its stop-out point. Profit: $119.90

6) The position bought at $1612.00 on August 7, 2012 was sold at $1711.90 on October 23, 2012, which was its stop-out point. Profit: $99.90

7) Buy one position at the market.  Gold is presently trading at $1679.50, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1657.00.

8) Buy one position if the Comex spot gold price trades at $1,692.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $38.00 below your purchase price.

9) Buy one position on the first Comex close in New York above $1712.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought at $29.421 on the Comex close in New York on August 21, 2012 was sold at $32.799 on October 15, 2012, which was its stop-out point. Profit: $3.378

2) The position bought at $27.60 on August 3, 2012 was sold at $31.799 on October 23, 2012, which was its stop-out point. Profit: $4.199

3) The position bought at $28.586 on the Comex close in New York on August 20, 2012 was sold at $31.799 on October 23, 2012, which was its stop-out point. Profit: $3.213

4) Buy one position at the market.  Silver is presently trading at $30.945, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $30.60.

5) Buy one position if the Comex spot silver price trades at $31.25.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 55¢ below your purchase price.

6) Buy one position on the first Comex close in New York above $31.40.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 50¢ below your purchase price.

Gold/Silver Ratio – Traders unwound at 53.1 on October 15, 2012 the short ratio position (they bought silver and sold an equal dollar amount of gold) sold at 57.8, which was the Comex close on August 3, 2012. Profit: 4.7 ticks, or 8.1%

Traders should sell the ratio (buy silver and sell an equal dollar amount of gold).  I’ll use today’s NY close for recordkeeping.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 56.0.

Comex options (options are high-risk and therefore not for everyone):
Buy the Feb’13 Comex 1800 gold call at the market. Buy the Mar’13 Comex 32 silver call at the market. I’ll use today’s NY close for recordkeeping.

Long one Dec’12 Comex 2000 gold call from $54.00, the January 3, 2012 Comex close.
Long one Dec’12 Comex 1800 gold call from $59.70, the March 15, 2012 Comex close.
Long one Feb’13 Comex 1800 gold call from $44.20, the May 11, 2012 Comex close.

Long one Dec’12 Comex 40 silver call from $1.761, the January 3, 2012 Comex close.
Long one Dec’12 Comex 40 silver call from $1.635, the March 15, 2012 Comex close.
Long one Dec’12 Comex 32 silver call from $1.527, the May 11, 2012 Comex close.

Hold all these calls without any stop-out point.

Trading Comments, 1 October 2012 (posted 11h00 CET):

No change from before, except we need to raise our stop-out points and also consider adding if we get a breakout. I do not recommend adding to our option positions.

I expect the precious metals to rally through the end of the year, with a new record high in gold coming soon – possibly in October. The new all-time record in silver depends on when it clears resistance in the $36-$37 area. Once it does, as I have been saying for nearly a year now, look for silver to reach $68-$70 within 2-to-3 months after the breakout.

Gold

1) Long one position bought at $1598.00 on July 25, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1712.00.

2) Long one position bought at $1592.00 on August 3, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1712.00.

3) Long one position bought at $1612.00 on August 7, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1712.00.

4) Long one position bought at $1639.90 Comex close in New York on August 21, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1732.00.

5) Long one position bought at $1669.60 Comex close in New York on August 23, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1732.00.

6) Buy one position if the Comex spot gold price trades at $1,812.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $38.00 below your purchase price.

7) Buy one position on the first Comex close in New York above $1782.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver

1) Long one position bought at $27.60 on August 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $31.80.

2) Long one position bought at $28.586 on the Comex close in New York on August 20, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $31.80.

3) Long one position bought at $29.421 on the Comex close in New York on August 21, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $32.80.

4) Buy one position if the Comex spot silver price trades at $37.25.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 55¢ below your purchase price.

5) Buy one position on the first Comex close in New York above $36.40.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 50¢ below your purchase price.

Gold/Silver Ratio – Traders are short the ratio (they bought silver and sold an equal dollar amount of gold) at 57.8, which was the Comex close on August 3, 2012.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 52.6.

Comex options (options are high-risk and therefore not for everyone):

Long one Dec’12 Comex 2000 gold call from $54.00, the January 3, 2012 Comex close.

Long one Dec’12 Comex 1800 gold call from $59.70, the March 15, 2012 Comex close.

Long one Feb’13 Comex 1800 gold call from $44.20, the May 11, 2012 Comex close.

Long one Dec’12 Comex 40 silver call from $1.761, the January 3, 2012 Comex close.

Long one Dec’12 Comex 40 silver call from $1.635, the March 15, 2012 Comex close.

Long one Dec’12 Comex 32 silver call from $1.527, the May 11, 2012 Comex close.

Hold all these calls without any stop-out point.

Trading Comments, 9 September 2012 (posted 10h45 CET):

The rally unfolded pretty much as expected, so we were only stopped out on one of the nine recommended trades. The only thing to do now is sit back and watch developments, while being mindful of the new stop-out levels to protect our profits.

The Fed did not announce a new QE program in August, but the precious metals markets are clearly anticipating one this week. I placed the stops well below current levels to allow for a setback in case the Fed disappoints. But regardless what the Fed announces later this week, it is important to remember that we do not need more QE for gold and silver to move higher.

Gold
1) Long one position bought at $1598.00 on July 25, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1642.00.

2) Long one position bought at $1592.00 on August 3, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1642.00.

3) Long one position bought at $1612.00 on August 7, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1642.00.

4) Long one position bought at $1639.90 Comex close in New York on August 21, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1642.00.

5) Long one position bought at $1669.60 Comex close in New York on August 23, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1683.00.

Silver
1) The position bought at $28.25 on August 8, 2012 was sold on August 10, 2012 at $27.70, which was its stop-out point.  Loss: 55¢

2) Long one position bought at $27.60 on August 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $30.05.

3) Long one position bought at $28.586 on the Comex close in New York on August 20, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $30.05.

4) Long one position bought at $29.421 on the Comex close in New York on August 21, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $30.05.

Gold/Silver Ratio – Traders are short the ratio (they bought silver and sold an equal dollar amount of gold) at 57.8, which was the Comex close on August 3, 2012.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 54.6.

Trading Comments, 3 August 2012 (posted 16h45 CET):

There were no updates while I was on my summer holiday.  I was watching developments, but there was nothing to do from a trading perspective.  But I assume everyone continues to follow my longstanding strategy of buying physical metal through a regular monthly accumulation plan.  Over the last couple of months, you have picked up some undervalued metal.

The metals are still undervalued of course, which is one reason whyI expect a big rally here.

The summer rally I have been patiently waiting for probably has already started.  The ongoing and interrelated bank solvency and sovereign debt crises continue to wreak havoc on the global monetary and financial scene. These crises will drive precious metal prices higher.

Support here is solid. It’s time to jump back onboard.  The summer rally I am expecting means up-days will outnumber down-days.  Pullbacks will be quick and shallow, like today.

Fed didn’t announce a QE this week.  But we do not need more QE for the metals to move higher.

Gold
1) The position bought at $1594.00 on June 29, 2012 was sold on July 12, 2012 at $1562.00, which was its stop-out point.  Loss: $32.00

2) The position bought at $1598.00 on June 29, 2012 was sold on July 12, 2012 at $1558.00, which was its stop-out point.  Loss: $40.00

3) Long one position bought at $1598.00 on July 25, 2012. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1572.00.

4) Buy one position if the Comex spot gold price trades at $1,592.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $24.00 below your purchase price.

5) Buy one position if the Comex spot gold price trades at $1,612.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $34.00 below your purchase price.

6) Buy one position on the first Comex close in New York above $1627.50.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

7) Buy one position on the first Comex close in New York above $1650.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought at $27.76 on June 29, 2012 was sold on July 6, 2012 at $27.10, which was its stop-out point.  Loss: 66¢

2) The position bought at $28.25 on July 3, 2012 was sold on July 5, 2012 at $27.70, which was its stop-out point.  Loss: 55¢

3) Buy one position at the market.  Silver is presently trading at $27.60, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $27.10.

4) Buy one position if the Comex spot silver price trades at $28.25.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 55¢ below your purchase price.

5) Buy one position on the first Comex close in New York above $28.40.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

6) Buy one position on the first Comex close in New York above $28.85.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Gold/Silver Ratio – Traders should sell the ratio (buy silver and sell an equal dollar amount of gold).  I’ll use today’s NY close for recordkeeping.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 59.8.

Comex options (options are high-risk and therefore not for everyone):
Long one Dec’12 Comex 2000 gold call from $54.00, the January 3, 2012 Comex close.
Long one Dec’12 Comex 1800 gold call from $59.70, the March 15, 2012 Comex close.
Long one Feb’13 Comex 1800 gold call from $44.20, the May 11, 2012 Comex close.

Long one Dec’12 Comex 40 silver call from $1.761, the January 3, 2012 Comex close.
Long one Dec’12 Comex 40 silver call from $1.635, the March 15, 2012 Comex close.
Long one Dec’12 Comex 32 silver call from $1.527, the May 11, 2012 Comex close.

Hold all these calls without any stop-out point.

Trading Comments, 29 June 2012 (posted 14h30 CET):

The Fed didn’t announce a QE program last week as I expected. More money printing is the last tool in their kit, so they are probably saving it for a banking crisis. The precious metals again tested the May low, which itself was a test of the December low.  So support here looks solid. The precious metals are ready to move higher.

Today’s rally is an indication of both the oversold condition of the precious metals as well as their underlying strength. There is a lot of money on the sidelines waiting for a pull-back to buy. Therefore, I do not expect much of a pull-back, and in fact, it would not be unreasonable to see gold and silver rocket higher from here, leaving a lot of money on the sidelines.

I am on my summer holiday next month. So my updates will be less frequent.

Gold
1) The position bought at $1580.00 on June 7, 2012 was sold on June 21, 2012 at $1584.00, which was its stop-out point.  Profit: $4.00

2) The position bought at $1602.00 on June 20, 2012 was sold later the same day at $1591.00, which was its stop-out point.  Loss: $11.00

3) Buy one position at the market.  Gold is presently trading at $1594.00, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1562.00.

4) Buy one position if the Comex spot gold price trades at $1,598.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $40.00 below your purchase price. If stopped out, re-enter this exact trade.

5) Buy one position on the first Comex close in New York above $1627.50.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

6) Buy one position on the first Comex close in New York above $1650.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought at $27.95 on June 20, 2012 was sold on June 21, 2012 at $27.40, which was its stop-out point.  Loss: 55¢

2) Buy one position at the market.  Silver is presently trading at $27.76, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $27.10.

3) Buy one position if the Comex spot silver price trades at $28.25.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 55¢ below your purchase price.

4) Buy one position on the first Comex close in New York above $28.62.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

5) Buy one position on the first Comex close in New York above $29.20.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Trading Comments, 20 June 2012 (posted 17h15 CET):

Guesses about what the Fed will do today are wide and varied. The weak dollar over the past several days suggests to me that the market is setting up for another QE program.  If so, today’s take-down in the precious metals is the last clean-out of stops and weak hands before gold and silver head higher.

The precious metals may drop to the day’s lows one more time just before the Fed announcement. Be prepared for this dip, just in case.

Gold
1) Long one position bought on June 7, 2012 at $1,580.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1,584.00.

2) Long one position bought today, June 20, 2012 at $1,602.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1,591.00.

3) Buy one position if the Comex spot gold price trades at $1,627.50.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $40.00 below your purchase price. If stopped out, re-enter this exact trade.

4) Buy one position on the first Comex close in New York above $1650.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought on the Comex close in New York at $28.943 on June 12, 2012 was sold on June 19, 2012 at $28.67, which was its stop-out point.  Loss: 27.3¢

2) Long one position bought today, June 20, 2012 at $28.45 was sold today at $28.10, which was its stop-out point.  Loss: 35¢.

3) Buy one position if the Comex spot silver price trades at $27.95.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 55¢ below your purchase price.

4) Buy one position if the Comex spot silver price trades at $28.62.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 35¢ below your purchase price. If stopped out, re-enter this exact trade.

5) Buy one position on the first Comex close in New York above $29.20.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Trading Comments, 13 June 2012 (posted 08h45 CET):

Monday was another day when the precious metals showed independent strength. The Dow, S&P, crude oil and many commodities were lower, but the price of gold and silver rose. We are still moving into a “fear event” as I discussed on King World News.

We got the pullback in the precious metals that I expected. My gold recommendation was filled, but silver was not.

That pullback was probably the final test of support. So the key resistance and support levels are $1650/$1580 and $30/$28. Gold and silver may trade within these ranges for a while, but once these resistance points are hurdled, the next upside leg of this decade-long bull market begins. And I expect it will be spectacular, given that prices will be rising in a fear event.

Gold
1) The position bought at $1602.00 on June 1, 2012 was sold on June 7, 2012 at $1604.00, which was its stop-out point.  Profit: $2.00

2) The position bought at $1620.50 on June 1, 2012 was sold on June 7, 2012 at $1597.00, which was its stop-out point.  Loss: $23.50

3) Long one position bought on June 7, 2012 at $1,580.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1,584.00.

4) Buy one position if the Comex spot gold price trades at $1,602.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $27.00 below your purchase price.

5) Buy one position on the first Comex close in New York above $1650.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought at $29.476 on June 6, 2012 was sold on June 7, 2012 at $28.17, which was its stop-out point.  Loss: 35¢

2) Long one position bought on the Comex close in New York on June 12, 2012 at $28.943.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $28.67.

3) Buy one position if the Comex spot silver price trades at $28.45.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 35¢ below your purchase price.

4) Buy one position if the Comex spot silver price trades at $29.20.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 35¢ below your purchase price.

5) Buy one position on the first Comex close in New York above $30.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Trading Comments, 4 June 2012 (posted 10h00 CET):

There may be more backing-and-filling, but it is looking increasingly likely that the bottom is in place for the precious metals. Friday’s big gain was very rare, and last seen when the precious metals started climbing again after the Lehman Brothers collapse.

Gold
1) The position bought at $1592.00 on May 21, 2012 was sold on May 23, 2012 at $1561.90, which was its stop-out point.  Loss: $30.10

2) Long one position bought on June 1, 2012 at $1,602.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1,604.00.

3) Long one position bought on the Comex close in New York on June 1, 2012 at $1620.50.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1597.00.

4) Buy one position if the Comex spot gold price trades at $1,580.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $27.00 below your purchase price.

Silver
1) The position bought at $28.44 on May 22, 2012 was sold later the same day at $28.17, which was its stop-out point.  Loss: 27¢

2) Buy one position if the Comex spot silver price trades at $27.85.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 35¢ below your purchase price.

3) Buy one position on the first Comex close in New York above $28.90.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Gold/Silver Ratio – On June 1, 2012 traders unwound at 56.9, the ratio sold (they bought silver and sold an equal dollar amount of gold) on May 21, 2012 at 56.1.  The loss was 0.8 ticks, or 1.4%.

Trading Comments, 22 May 2012 (posted 08h00 CET):

The evidence continues to build that last week was an important low. I was a few days too early in trying to pick a bottom. The strong bounce in both precious metals at the end of the week makes it even more likely that we have a low-risk entry point. 

Gold
1) Long one position from $1592.00 bought on May 21, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1562.00.

2) Buy one position on an intraday stop-buy if the Comex gold spot price trades at $1,602.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

3) Buy one position on the first Comex close in New York above $1,618.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought at $28.48 on May 21, 2012 was sold later the same day at $28.23, which was its stop-out point.  Loss: 25¢

2) Buy one position at the market.  Silver is presently trading at $28.44, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $28.17.

3) Buy one position on the first Comex close in New York above $28.90.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Gold/Silver Ratio – On May 21, 2012 traders sold the ratio (they bought silver and sold an equal dollar amount of gold) at 56.1.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 56.8.

Comex options (options are high-risk and therefore not for everyone):
Long one Dec’12 Comex 2000 gold call from $54.00, the January 3, 2012 Comex close.
Long one Dec’12 Comex 1800 gold call from $59.70, the March 15, 2012 Comex close.
Long one Feb’13 Comex 1800 gold call from $44.20, the May 11, 2012 Comex close.

Long one Dec’12 Comex 40 silver call from $1.761, the January 3, 2012 Comex close.
Long one Dec’12 Comex 40 silver call from $1.635, the March 15, 2012 Comex close.
Long one Dec’12 Comex 32 silver call from $1.527, the May 11, 2012 Comex close.

Hold all these calls without any stop-out point.

Trading Comments, 21 May 2012 (posted 13h45 CET):

I was a few days too early in trying to pick a bottom. The strong bounce in both precious metals at the end of the week makes it even more likely that we have a low-risk entry point. 

Gold
1) The position bought at $1,585.00 on May 11, 2012 was sold on May 13, 2012 at $1562.00, which was its stop-out point.  Loss: $23.00

2) Buy one position at the market.  Gold is presently trading at $1592.00, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1562.00.

3) Buy one position on the first Comex close in New York above $1,602.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought at $28.98 on May 11, 2012 was sold later the same day at $28.63, which was its stop-out point.  Loss: 35¢

2) Buy one position at the market.  Silver is presently trading at $28.48, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $28.23.

3) Buy one position on the first Comex close in New York above $28.90.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Gold/Silver Ratio – On May 16, 2012 traders unwound at 56.5 the ratio trade (long silver and short an equal dollar value of gold) from 54.9 on May 11, 2012. The loss was 1.6 pips, or 2.9%.  Traders should again short the ratio (buy silver and sell an equal dollar amount of gold).  I’ll use today’s Comex close for recordkeeping.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 56.8.

Comex options (options are high-risk and therefore not for everyone):
Traders bought one Feb’13 Comex 1800 gold call at $44.20 and one Dec’12 Comex 32 silver call at $1.527 on May 11, 2012, the closing price in New York.

Long one Dec’12 Comex 2000 gold call from $54.00, the January 3, 2012 Comex close.
Long one Dec’12 Comex 1800 gold call from $59.70, the March 15, 2012 Comex close.

Long one Dec’12 Comex 40 silver call from $1.761, the January 3, 2012 Comex close.
Long one Dec’12 Comex 40 silver call from $1.635, the March 15, 2012 Comex close.

Hold all these calls without any stop-out point.

Trading Comments, 11 May 2012 (posted 18h30 CET):

It’s been nearly a month since my last post.  I haven’t been recommending any trades lately because there was nothing to do except sell short, but I never recommend going against any primary trend.  The major trend for gold and silver is still rising, notwithstanding the beating they have taken in this current correction, particularly over the past few weeks. So we have been on the sidelines, but of course we are still accumulating physical gold and silver in our ongoing dollar-cost averaging program.

The precious metals remain in the correction that began one year ago for silver and last summer for gold. But this correction will eventually end, and more to the point, I think we again have a low-risk entry point. 

Gold
1) The position bought at $1,654.50 on April 16, 2012 was sold on April 23, 2012 at $1630.50, which was its stop-out point.  Loss: $24.00

2) Buy one position at the market.  Gold is presently trading at $1585.00, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1562.00.

3) Buy one position on the first Comex close in New York above $1,602.0.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought at $31.38 on April 16, 2012 was sold on April 23, 2012 at $30.98, which was its stop-out point.  Loss: 40¢

2) Buy one position at the market.  Silver is presently trading at $28.98, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $28.63.

3) Buy one position on the first Comex close in New York above $29.25.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Gold/Silver Ratio – On April 25, 2012 traders unwound at 54.1 the ratio trade (long silver and short an equal dollar value of gold) from 52.4 on March 22, 2012. The loss was 1.7 pips, or 3.2%.  Traders should again short the ratio (buy silver and sell an equal dollar amount of gold).  I’ll use today’s Comex close for recordkeeping.  Stop-out point: Unwind this trade on the ratio’s first Comex close in New York more than 2% above your entry price.

Comex options (options are high-risk and therefore not for everyone):
The Apr’12 Comex 2000 gold call bought at $27.70 on November 28, 2011, the Apr’12 Comex 1800 gold bought at $63.20, and the May’12 Comex 40 silver bought at $1.812 on October 21, 2011 expired out of the money.

Buy one Feb’13 Comex 1800 gold call and one Dec’12 Comex 32 silver call at the market.  I’ll use today’s closing price in New York for record keeping.

Long one Dec’12 Comex 2000 gold call from $54.00, the January 3, 2012 Comex close.
Long one Dec’12 Comex 1800 gold call from $59.70, the March 15, 2012 Comex close.

Long one Dec’12 Comex 40 silver call from $1.761, the January 3, 2012 Comex close.
Long one Dec’12 Comex 40 silver call from $1.635, the March 15, 2012 Comex close.

Hold all these calls without any stop-out point.

Trading Comments, 14 April 2012 (posted 22h45 CET):

Gold and silver have done little over the past two weeks. The short-term volatility is noise that can be ignored. The positive news is that both precious metals have completed two more weeks of base building. Maybe the base being built is finally big enough to launch the metals higher.

Gold
1) The position bought at $1,636.50 on March 22, 2012 was sold on April 3, 2012 at $1642.00, which was its stop-out point.  Profit: $5.50

2) The position bought at $1,660.00 on April 3, 2012 was sold late the same day at $1647.50, which was its stop-out point.  Loss: $12.50

3) Buy one position on the open in Asia on Monday morning.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades more than $24 below your purchase price.

4) Buy one position on the first Comex close in New York above $1,680.0.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought at $32.58 on April 2, 2012 was sold on April 4, 2012 at $32.22, which was its stop-out point.  Loss: 36¢

2) The position bought at $33.083 on the Comex NY close on April 2, 2012 was sold on April 3, 2012 at $32.733, which was its stop-out point.  Loss: 35¢

3) Buy one position on the open in Asia on Monday morning.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 40¢ below your purchase price.

4) Buy one position on the first Comex close in New York above $31.85.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Trading Comments, 2 April 2012 (posted 08h45 CET):

Support for gold at $1650 and silver at $32 has been now tested many times and held each time. Therefore, these support levels appear solid. One can only conclude that the precious metals will start heading higher from here.

Gold
1) The position bought at $1,685.50 on the March 26, 2012 Comex close in New York was sold on March 28, 2012 at $1660.50, which was its stop-out point.  Loss: $25.00

2) Long one position from $1,636.50 purchased on March 22, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1642.00.

3) Buy one position if gold trades at $1660.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1647.50.

4) Buy one position on the first Comex close in New York above $1,685.50.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought at $31.84 on March 22, 2012 was sold later the same day at $31.66, which was its stop-out point.  Loss: 18¢

2) Buy one position at the market.  Silver is presently $32.58 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $32.22.

3) Buy one position on the first Comex close in New York above $32.75 comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Gold/Silver Ratio – Long the ratio (long silver and short an equal dollar value of gold) at 52.4, the March 22, 2012 New York Comex close. Stop-out point: Unwind this trade if the ratio closes on the Comex in New York above 54.

Trading Comments, 22 March 2012 (posted 11h00 CET):

The precious metals are testing support this morning. With the weekend approaching, the shorts will probably be looking for an opportunity to buy. We should use this opportunity as well to begin building a trading position.

Are the metals at a bottom? Only time will tell, but that is the risk one takes when trying to ‘bottom fish’.

Keep in mind too that next week is option expiry. There may be an effort here to press prices lower into the weekend, to set up lower prices next week. But maybe the shorts have overstretched themselves already and can’t push prices any lower. Note how silver at the moment is holding up better than gold. It may be a clue that the precious metals are oversold and due for a rally.

Gold
1) The position bought at $1,647.00 on March 15, 2012 was sold on March 22, 2012 at $1644.00, which was its stop-out point.  Loss: $3.00

2) Buy one position at the market.  Gold is presently $1,636.50 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1628.00.

3) Buy one position if gold trades at $1608.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1592.00.

4) Buy one position on the first Comex close in New York above $1,665.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) Buy one position at the market.  Silver is presently $31.84 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.66.

2) Buy one position on the first Comex close in New York above $32.75 comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Gold/Silver Ratio – Sell the ratio (buy silver and sell an equal dollar value of gold) at today’s New York Comex close.

Trading Comments, 21 March 2012 (posted 009h45 CET):

The precious metals are still testing support. So far gold has held $1650 and silver has held $32, which are important support levels. That is positive.

Gold
1) The position bought at $1,659.10 on the Comex New York close on March 15, 2012 was sold on March 20, 2012 at $1647.50, which was its stop-out point.  Loss: $11.60

2) The position bought at $1,666.90 on the Comex New York close on March 19, 2012 was sold on March 20, 2012 at $1641.90, which was its stop-out point.  Loss: $25.00

3) Long one position from $1,647.00 bought on March 15, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1644.00.

4) Buy one position on the first Comex close in New York above $1,665.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought at $32.18 on March 15, 2012 was sold on March 20, 2012 at $32.26, which was its stop-out point.  Profit: 8.0¢

2) 1) The position bought at $32.926 on the Comex New York close on March 19, 2012 was sold on March 20, 2012 at $32.576, which was its stop-out point.  Loss: 35.0¢

3) Buy one position on the first Comex close in New York above $32.75 comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Gold/Silver Ratio – On March 20, 2012 traders unwound at 51.8 their short position in the ratio established at 54.2 on January 3, 2012.  The profit was 2.4 pips, or 4.4%.

Comex options (options are high-risk and therefore not for everyone):
Long one Apr’12 Comex 2000 gold call from $27.70, the November 28, 2011 Comex close.
Long one Apr’12 Comex 1800 gold call from $63.20, the October 21, 2011 Comex close.

Long one May’12 Comex 40 silver call from $1.812, the October 21, 2011 Comex close. 

Long one Dec’12 Comex 2000 gold call from $54.00, the January 3, 2012 Comex close.
Long one Dec’12 Comex 1800 gold call from $59.70, the March 15, 2012 Comex close.

Long one Dec’12 Comex 40 silver call from $1.761, the January 3, 2012 Comex close.
Long one Dec’12 Comex 40 silver call from $1.635, the March 15, 2012 Comex close.

Trading Comments, 19 March 2012 (posted 010h00 CET):

The precious metals are still trying to re-group after being dealt two smashdowns, one at the end of February and the one last week. With the important April option contracts expiring next week, the shorts will probably try to keep the downward pressure on gold and silver. It will be an important show of strength if gold holds $1650 and silver holds $32.

Gold
1) Long one position from $1,647.00 bought on March 15, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1636.00.

2) Long one position from $1,659.10 bought on the Comex New York close on March 15, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1647.50.

3) Buy one position at $1608.00 or on the first Comex close in New York above $1,665.00, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought on the Comex New York close at $32.693 on March 15, 2012 was sold the same day at $32.343, which was its stop-out point.  Loss: 35.0¢

2) Long one position from $32.18 bought on March 15, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $32.26.

3) Buy one position if the Comex spot silver price trades at $31.88 or on the first Comex close in New York above $32.75, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Gold/Silver Ratio – Traders are short the ratio (long silver and short an equal dollar value of gold) from 54.2 on January 3, 2012.  Stop-out point: Unwind this trade on the first New York Comex close in the ratio above 51.6.

Comex options (options are high-risk and therefore not for everyone):
On the March 15th Comex close bought one Dec’12 Comex 1800 gold call at $59.70.

On the March 15th Comex close bought one Dec’12 Comex 40 silver call at $1.635.

Long one Apr’12 Comex 2000 gold call from $27.70, the November 28, 2011 Comex close.
Long one Apr’12 Comex 1800 gold call from $63.20, the October 21, 2011 Comex close.

Long one May’12 Comex 40 silver call from $1.812, the October 21, 2011 Comex close. 

Long one Dec’12 Comex 2000 gold call from $54.00, the January 3, 2012 Comex close.
Long one Dec’12 Comex 40 silver call from $1.761, the January 3, 2012 Comex close.

Trading Comments, 15 March 2012 (posted 08h15 CET):

The shorts have managed a replay of the smash they engineered at the end of Feb. We’ve been on the sidelines waiting to step back in. Now is the time to buy once again.

Gold
1) The position bought at $1,701.90 on March 6, 2012 was sold the same day at $1696.00, which was its stop-out point.  Loss: $5.90

2) The position bought at $1,688.00 on March 6, 2012 was sold the same day at $1663.00, which was its stop-out point.  Loss: $25.00

3) Buy one position at the market.  Gold is presently $1,647.00 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1628.00.

4) Buy one position at $1608.00 or on the first Comex close in New York above $1,650.00, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought on March 6, 2012 at $33.85 was sold the same day at $33.74, which was its stop-out point.  Loss: 11.0¢

2) The position bought on March 6, 2012 at $33.55 was sold the same day at $33.00, which was its stop-out point.  Loss: 55.0¢

3) Buy one position at the market.  Silver is presently $32.18 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.88.

4) Buy one position if the Comex spot silver price trades at $31.55 or on the first Comex close in New York above $32.30, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 35¢ below your purchase price.

Gold/Silver Ratio – Traders are short the ratio (long silver and short an equal dollar value of gold) from 54.2 on January 3, 2012.  Stop-out point: Unwind this trade on the first New York Comex close in the ratio above 51.8.

Comex options (options are high-risk and therefore not for everyone):
Buy one Dec’12 Comex 1800 gold call at the market. I will use today’s Comex closing price for record keeping.

Buy one Dec’12 Comex 40 silver call at the market. I will use today’s Comex closing price for record keeping.

Long one Apr’12 Comex 2000 gold call from $27.70, the November 28, 2011 Comex close.
Long one Apr’12 Comex 1800 gold call from $63.20, the October 21, 2011 Comex close.

Long one May’12 Comex 40 silver call from $1.812, the October 21, 2011 Comex close. 

Long one Dec’12 Comex 2000 gold call from $54.00, the January 3, 2012 Comex close.
Long one Dec’12 Comex 40 silver call from $1.761, the January 3, 2012 Comex close.

Trading Comments, 6 March 2012 (posted 08h30 CET):

Both gold and silver are going through the process of re-testing support. This process may take a couple of days, or maybe a couple of weeks.  I do not expect support to break.  I recommend re-building new trading positions.

Gold
1) The position bought at $1,714.50 on March 1, 2012 was sold on March 5, 2012 at $1702.00, which was its stop-out point.  Loss: $12.50

2) Buy one position at the market.  Gold is presently $1,701.90 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1696.00.

3) Buy one position at $1688.00 or on the first Comex close in New York above $1,712.00, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought on March 1, 2012 at $34.805 was sold on March 2, 2012 at $34.55, which was its stop-out point.  Loss: 25.5¢

2) The position bought on March 1, 2012 on the Comex close at $35.611 was sold on March 2, 2012 at $35.061, which was its stop-out point.  Loss: 55.0¢

3) Buy one position at the market.  Silver is presently $33.85 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $33.74.

4) Buy one position if the Comex spot silver price trades at $33.55 or on the first Comex close in New York above $33.90, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 55¢ below your purchase price.

Gold/Silver Ratio – Traders are short the ratio (long silver and short an equal dollar value of gold) from 54.2 on January 3, 2012.  Stop-out point: Unwind this trade on the first New York Comex close in the ratio above 51.8.

Trading Comments, 1 March 2012 (posted 08h30 CET):

The metals got whacked by the paper traders and shorts.  We were stopped out with good profits.  I recommend re-building new trading positions from these levels.

Gold
1) The position bought at $1,757.10 on the Comex NY close on February 21, 2012 was sold on February 29, 2012 at $1748.00, which was its stop-out point.  Loss: $9.10

2) The position bought at $1,655.20 on the Comex NY close on January 17, 2012 was sold on February 29, 2012 at $1726.00, which was its stop-out point.  Profit: $70.80

3) The position bought at $$1,586.00 bought on January 3, 2012 was sold on February 29, 2012 at $1714.00, which was its stop-out point.  Profit: $128.00

4) Buy one position at the market.  Gold is presently $1,714.50 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1702.00.

5) Buy one position at $1688.00 or on the first Comex close in New York above $1,732.00, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought at February 21, 2012 at $34.20 was sold on February 29, 2012 at $35.08, which was its stop-out point.  Profit: 88.0¢

2) The position bought at February 21, 2012 at $33.75 was sold on February 29, 2012 at $34.22, which was its stop-out point.  Profit: 47.0¢

3) The position bought on the Comex close in New York on January 18, 2012 at $30.514 was sold on February 29, 2012 at $33.78, which was its stop-out point.  Profit: $3.26

4) Buy one position at the market.  Silver is presently $34.805 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $34.55.

5) Buy one position if the Comex spot silver price trades at $34.00 or on the first Comex close in New York above $35.20, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 55¢ below your purchase price.

Gold/Silver Ratio – Traders are short the ratio (long silver and short an equal dollar value of gold) from 54.2 on January 3, 2012.  Stop-out point: Unwind this trade on the first New York Comex close in the ratio above 52.0.

Trading Comments, 27 February 2012 (posted 08h30 CET):

Both gold and silver had a great week, with gold rising 2.9% while silver soared 6.4%.  Silver is now in the process of breaking through resistance at $35.  I expect it will be tough going for silver until it hurdles above $36.  When it does, the silver price will begin to accelerate higher.

Gold
1) Long one position from $1,586.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1714.00.

2) Long one position from $1,655.20 bought on the Comex NY close on January 17, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1726.00.

3) Long one position from $1,757.10 bought on the Comex NY close on February 21, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1748.00 or has a Comex close in New York below $1765.00, whichever comes first.

Silver
1) The position bought at $34.413 on the Comex close in New York on February 21, 2012 was sold on February 22, 2012 at $33.963, which was its stop-out point.  Loss: 45.0¢

2) Long one position bought on the Comex close in New York on January 18, 2012 at $30.514.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $33.78.

3) Long one position bought on February 21, 2012 at $33.75.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $34.22.

4) Long one position bought on February 21, 2012 at $34.20.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $35.08.

Gold/Silver Ratio – Traders are short ratio (long silver and short an equal dollar value of gold) from 54.2 on January 3, 2012.  Stop-out point: Unwind this trade on the first New York Comex close above 52.3.

Comex options (options are high-risk and therefore not for everyone):
The Mar’12 Comex 40 silver call bought at $0.66 on the November 28, 2011 Comex close expired out of the money.

Long one Apr’12 Comex 2000 gold call from $27.70, the November 28, 2011 Comex close.
Long one Apr’12 Comex 1800 gold call from $63.20, the October 21, 2011 Comex close.

Long one May’12 Comex 40 silver call from $1.812, the October 21, 2011 Comex close. 

Long one Dec’12 Comex 2000 gold call from $54.00, the January 3, 2012 Comex close.
Long one Dec’12 Comex 40 silver call from $1.761, the January 3, 2012 Comex close.

Hold these calls without any stop-out point.

Trading Comments, 21 February 2012 (posted 10h30 CET):

The metals this morning are heading higher, but are still mired within their trading range.  With each passing day, we are getting closer to the upside breakout I am expecting.

Gold
1) The position bought at $1729.00 on February 13, 2012 was sold on February 16, 2012 at $1712.00, which was its stop-out point.  Loss: $17.00

2) Long one position from $1,586.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1702.00.

3) Long one position from $1,655.20 bought on the Comex NY close on January 17, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1714.00.

4) Buy one position on the first Comex close in New York above $1,732.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought at $33.27 on February 16, 2012 was sold later the same day at $33.08, which was its stop-out point.  Loss: 19.0¢

2) The position bought at $33.20 on February 16, 2012 was sold later the same day at $32.75, which was its stop-out point.  Loss: 45.0¢

3) Long one position bought on the Comex close in New York on January 18, 2012 at $30.514.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $32.52.

4) Buy one position at the market.  Silver is presently $33.75 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $33.55.

5) Buy one position if the Comex spot price trades at $33.20 or on the first Comex close in New York above $33.70, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 45¢ below your purchase price.

6) Buy one position if the Comex spot price trades at $34.20 or on the first Comex close in New York above $33.80, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 45¢ below your purchase price.

Gold/Silver Ratio – Traders are short ratio (long silver and short an equal dollar value of gold) from 54.2 on January 3, 2012.  Stop-out point: Unwind this trade on the first New York Comex close above 52.5.

Trading Comments, 16 February 2012 (posted 08h15 CET):

More consolidation, with both precious again testing support at their lows, which I assume will hold this time just like the previous times.  While this sideways trading action may be frustrating, we have to recognize it for what it really is, which is base-building.  And base-building is always constructive. 

Gold
1) Long one position from $1,586.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1696.00.

2) Long one position from $1,655.20 bought on the Comex NY close on January 17, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1702.00.

3) Long one position from $1,729.00 bought on February 13, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1712.00.

4) Buy one position on the first Comex close in New York above $1,732.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought at $33.85 on February 13, 2012 was sold on February 14, 2012 at $33.46, which was its stop-out point.  Loss: 39.0¢

2) The position bought at $33.02 on February 6, 2012 was sold on February 15, 2012 at $33.12, which was its stop-out point.  Profit: 10.0¢

3) Long one position bought on the Comex close in New York on January 18, 2012 at $30.514.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.92.

4) Buy one position at the market.  Silver is presently $33.27 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $33.08.

5) Buy one position if the Comex spot price trades at $33.20 or on the first Comex close in New York above $33.40, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 45¢ below your purchase price.

6) Buy one position if the Comex spot price trades at $34.20 or on the first Comex close in New York above $33.80, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 45¢ below your purchase price.

Gold/Silver Ratio – Traders are short ratio (long silver and short an equal dollar value of gold) from 54.2 on January 3, 2012.  Stop-out point: Unwind this trade on the first New York Comex close above 53.0.

Trading Comments, 13 February 2012 (posted 08h30 CET):

Gold and silver are still consolidating their gains from the January low.  The upside fireworks I am expecting should start soon. 

Gold
1) The position bought at $1,728.00 on February 3, 2012 was sold on February 10, 2012 at $1708.00, which was its stop-out point.  Loss: $20.00

2) Long one position from $1,586.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1696.00.

3) Long one position from $1,655.20 bought on the Comex NY close on January 17, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1702.00.

4) Buy one position at the market.  Gold is presently $1,729.00 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1712.00.

5) Buy one position on the first Comex close in New York above $1,752.50.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought at $33.56 on February 6, 2012 was sold the same day at $33.24, which was its stop-out point.  Loss: 32.0¢

2) Long one position bought on the Comex close in New York on January 18, 2012 at $30.514.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.48.

3) Long one position bought on February 6, 2012 at $33.02.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $33.12.

3) Buy one position at the market.  Silver is presently $33.85 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $33.46.

4) Buy one position if the Comex spot price trades at $34.20 or on the first Comex close in New York above $33.80, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 45¢ below your purchase price.

Gold/Silver Ratio – Traders are short ratio (long silver and short an equal dollar value of gold) from 54.2 on January 3, 2012.  Stop-out point: Unwind this trade on the first New York Comex close above 53.2.

Trading Comments, 6 February 2012 (posted 09h45 CET):

I am not sure the retracement that began on Friday is over yet.  So there may be more backing-and-filling.  But I expect the metals will end the week on strength. 

Gold
1) Long one position from $1,586.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1648.00.

2) Long one position from $1,655.20 bought on the Comex NY close on January 17, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1696.00.

3) Long one position from $1,728.00 bought on February 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1708.00.

4) Buy one position on the first Comex close in New York above $1,764.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought on the Comex NY close at $34.151 on February 2, 2012 was sold on February 3, 2012 at $33.701, which was its stop-out point.  Loss: 45.0¢

2) Long one position bought on the Comex close in New York on January 18, 2012 at $30.514.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.48.

3) Buy one position at the market.  Silver is presently $33.56 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $33.24.

4) Buy one position if the Comex spot price trades at $33.02 or on the first Comex close in New York above $33.80, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 45¢ below your purchase price.

Gold/Silver Ratio – Traders are short ratio (long silver and short an equal dollar value of gold) from 54.2 on January 3, 2012.  Stop-out point: Unwind this trade on the first New York Comex close above 53.8.

Trading Comments, 2 February 2012 (posted 10h00 CET):

I’ve been travelling which explains the absence of posts the past couple of weeks.  I assume you have been following my interviews on King World News, Korelin Economics Report and many other sites so that you can keep up-to-date with my thinking.  You may also find my interview with The AU Report to be useful.  But there should be no surprises in any case because I have not changed my bullish long-term view on gold and silver.

January was a great month, with gold up 11.0% and silver up 19.2%.  February looks like it too will be a great month, and has the same potential as January to generate significant appreciation.

Gold
1) The position bought at $1,639.20 on the Comex close in New York on January 11, 2012 was sold on January 13, 2012 at $1641.50, which was its stop-out point.  Profit: $2.30

2) The position bought at $1,616.00 on January 5, 2012 was sold on January 13, 2012 at $1632.00, which was its stop-out point.  Profit: $16.00

3) The position bought at $1,602.00 on January 3, 2012 was sold on January 13, 2012 at $1628.00, which was its stop-out point.  Profit: $26.00

4) Long one position from $1,586.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1648.00.

5) Long one position from $1,655.20 bought on the Comex NY close on January 17, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1696.00.

6) Buy one position if the Comex spot price trades at $1,728.00 or on the first Comex close in New York above $1,764.00, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price.

Silver
1) The position bought at $30.07 on January 12, 2012 was sold on January 13, 2012 at $29.84, which was its stop-out point.  Loss: 23.0¢

2) The position bought at $28.80 on January 9, 2012 was sold on January 13, 2012 at $29.72, which was its stop-out point.  Profit: 92.0¢

3) Long one position bought on the Comex close in New York on January 18, 2012 at $30.514.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.48.

4) Buy one position if the Comex spot price trades at $33.25 or on the first Comex close in New York above $34.00, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 45¢ below your purchase price.

Gold/Silver Ratio – Traders are short ratio (long silver and short an equal dollar value of gold) from 54.2 on January 3, 2012.  Stop-out point: Unwind this trade on the first New York Comex close above 54.4.

Trading Comments, 12 January 2012 (posted 10h00 CET):

The “backing & filling” yesterday was not out of the ordinary.  There may be more re-tests of support.  Nevertheless, with each passing day the odds improve that the low in the precious metals is behind us.

Gold
1) The position bought at $1,631.00 bought on the Comex close in New York on January 10, 2012 was sold on January 11, 2012 at $1634.00, which was its stop-out point.  Profit: $3.00

2) Long one position from $1,586.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1622.00. (12 January 2011)

3) Long one position from $1,602.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1628.00. (12 January 2011)

4) Long one position from $1,616.00 bought on January 5, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1632.00. (12 January 2011)

5) Long one position from $1,639.20 bought on the Comex close in New York on January 11, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1641.50. (12 January 2011)

6) Buy one position on the first Comex close in New York above $1648.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (12 January 2011)

Silver
1) The position bought at $30.04 on January 11, 2012 was sold later the same day at $28.94, which was its stop-out point.  Loss: 10.0¢

2) One position bought at $29.780 bought on the Comex close in New York on January 10, 2012 was sold on January 11, 2012 at $29.92, which was its stop-out point.  Profit: 14.0¢

3) One position bought at $29.780 bought on the Comex close in New York on January 10, 2012 was sold on January 11, 2012 at $29.86, which was its stop-out point.  Profit: 12.0¢

4) Long one position from $28.80 bought on January 9, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.72. (updated 12 January 2012)

5) Buy one position at the market.  Silver is presently $30.07 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.84. (updated 12 January 2012)

6) Buy one position on the first Comex close in New York above $30.20.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 12 January 2012)

Trading Comments, 11 January 2012 (posted 08h45 CET):

Both precious metals are starting to build upside momentum.  I expect some spectacular fireworks in both gold and silver before the end of this month.

Gold
1) Long one position from $1,586.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1612.00. (11 January 2011)

2) Long one position from $1,602.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1622.00. (11 January 2011)

3) Long one position from $1,616.00 bought on January 5, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1628.00. (11 January 2011)

4) Long one position from $1,631.00 bought on the Comex close in New York on January 10, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1634.00. (11 January 2011)

5) Buy one position on the first Comex close in New York above $1632.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (11 January 2011)

Silver
1) The position bought at $29.10 on January 9, 2012 was sold later the same day at $28.92, which was its stop-out point.  Loss: 18¢

2) Long one position from $28.80 bought on January 9, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.52. (updated 11 January 2012)

3) Long two positions from $29.780 bought on the Comex close in New York on January 10, 2012.  Stop-out point: sell one position at an intraday stop-out point if Comex spot silver trades at $29.92; sell one position at an intraday stop-out point if Comex spot silver trades at $29.86. (updated 11 January 2012)

4) Buy one position if the Comex spot price trades at $30.04.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $29.94. (updated 11 January 2012)

5) Buy one position on the first Comex close in New York above $30.20.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 11 January 2012)

Trading Comments, 9 January 2012 (posted 08h15 CET):

Both precious metals had a good week, but silver did not do as well as I expected.  So we are seeing some re-testing of support in both metals.  We need to assume that support will again hold, and as a consequence, gold and silver will end the week higher.

Gold
1) Long one position from $1,586.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1587.50. (9 January 2011)

2) Long one position from $1,602.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1596.00. (9 January 2011)

3) Long one position from $1,616.00 bought on January 5, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1602.00. (9 January 2011)

4) Buy one position on the first Comex close in New York above $1618.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (9 January 2011)

5) Buy one position on the first Comex close in New York above $1632.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (9 January 2011)

Silver
1) The position bought at $29.38 on January 6, 2012 was sold later the same day at $29.22, which was its stop-out point.  Loss: 16¢

2) The position bought at $29.10 on January 6, 2012 was sold later the same day at $28.88, which was its stop-out point.  Loss: 22¢

3) Buy one position at the market.  Silver is presently $28.80 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.48. (updated 9 January 2012)

4) Buy one position if the Comex spot price trades at $28.60.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $28.375. (updated 9 January 2012)

5) Buy one position if the Comex spot price trades at $29.10.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $28.92. (updated 9 January 2012)

6) Buy one position on the first Comex close in New York above $28.90.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 9 January 2012)

6) Buy one position on the first Comex close in New York above $29.24.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 9 January 2012)

Gold/Silver Ratio – Traders are short ratio (long silver and short an equal dollar value of gold) from 54.2 on January 3, 2012.  Stop-out point: Unwind this trade on the first New York Comex close above 56.4 (Friday’s close was “at” but not “above” this level). (updated 9 January 2012)

Trading Comments, 6 January 2012 (posted 10h30 CET):

Now that the September lows have been tested and held, both gold and silver are forming a double-bottom.  There is considerable support for gold under $1600 and silver under $29.  The momentum has begun shifting in favor of the precious metals and bodes well for higher prices in the days and weeks ahead.

Gold
1) Long one position from $1,586.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1582.00. (6 January 2011)

2) Long one position from $1,602.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1587.50. (6 January 2011)

3) Long one position from $1,616.00 bought on January 5, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1596.00. (6 January 2011)

4) Buy one position on the first Comex close in New York above $1620.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (6 January 2011)

5) Buy one position on the first Comex close in New York above $1644.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (6 January 2011)

Silver
1) The position bought at $29.533 on January 4, 2012 was sold on January 5, 2012 at $28.98, which was its stop-out point.  Loss: 55.3¢

2) The position bought at $28.80 on January 3, 2012 was sold on January 5, 2012 at $28.92, which was its stop-out point.  Profit: 12¢

3) The position bought at $28.48 on January 3, 2012 was sold on January 5, 2012 at $28.70, which was its stop-out point.  Profit: 22¢

4) Buy one position at the market.  Silver is presently $29.38 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.22. (updated 6 January 2012)

5) Buy one position if the Comex spot price trades at $29.10.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $28.88. (updated 6 January 2012)

6) Buy one position if the Comex spot price trades at $29.60.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $29.32. (updated 6 January 2012)

7) Buy one position on the first Comex close in New York above $29.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 6 January 2012)

Gold/Silver Ratio – Traders are short ratio (long silver and short an equal dollar value of gold) from 54.2 on January 3, 2012.  Stop-out point: Unwind this trade on the first New York Comex close above 56.4. (updated 6 January 2012)

Comex options (options are high-risk and therefore not for everyone):
Long one Apr’12 Comex 2000 gold call from $27.70, the November 28, 2011 Comex close.
Long one Mar’12 Comex 40 silver call from $0.66, the November 28, 2011 Comex close. 

Long one Apr’12 Comex 1800 gold call from $63.20, the October 21, 2011 Comex close.
Long one May’12 Comex 40 silver call from $1.812, the October 21, 2011 Comex close. 

Long one Dec’12 Comex 2000 gold call from $54.00, the January 3, 2012 Comex close.
Long one Dec’12 Comex 40 silver call from $1.761, the January 3, 2012 Comex close.

Hold these calls without any stop-out point. (updated 6 January 2012)

Trading Comments, 4 January 2012 (posted 12h30 CET):

With yesterday’s jump in the precious metals, one couldn’t ask for a better way to start the new year. The question now is what kind of upward pace will the metals follow? 

Given that the metals remain so oversold, that the problems with national currencies are not being solved and that so much money is waiting on the sidelines, it is reasonable to conclude that gold and silver will continue to climb rapidly.  I will be very surprised if silver finishes this week below $30.  I expect gold to clear $1620 this week, which would be a very positive technical development.

Gold
1) Long $1,586.00 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1582.00. (4 January 2011)

2) Long $1,602 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1587.50. (4 January 2011)

3) Buy one position if the Comex spot price trades at $1616.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1596.00. (updated 4 January 2011)

4) Buy one position on the first Comex close in New York above $1620.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (4 January 2011)

5) Buy one position on the first Comex close in New York above $1644.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (4 January 2011)

Silver
1) Long from $28.48 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.70. (updated 4 January 2012)

2) Long from $28.80 bought on January 3, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.92. (updated 4 January 2012)

3) Long from $29.533 bought on the Comex close on January 4, 2012.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.98. (updated 4 January 2012)

4) Buy one position on the first Comex close in New York above $29.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 3 January 2012)

Gold/Silver Ratio – Traders are short ratio (long silver and short an equal dollar value of gold) from 54.2 on January 3, 2012.  Stop-out point: Unwind this trade on the first New York Comex close above 56.5. (updated 4 January 2012)

Comex options (options are high-risk and therefore not for everyone):
Bought the Dec’12 Comex 2000 gold call at $54.00 on January 3, 2012.
Bought the Dec’12 Comex 40 silver call at $1.761 on January 3, 2012.

Long one Apr’12 Comex 2000 gold call from $27.70, the November 28, 2011 Comex close.
Long one Mar’12 Comex 40 silver call from $0.66, the November 28, 2011 Comex close. 

Long one Apr’12 Comex 1800 gold call from $63.20, the October 21, 2011 Comex close.
Long one May’12 Comex 40 silver call from $1.812, the October 21, 2011 Comex close. 

Hold these calls without any stop-out point. (updated 4 January 2012)

Trading Comments, 3 January 2012 (posted 10h30 CET):

It was a cheerless way for the precious metals to end last year.  Nevertheless, even though gold dropped -10.3% in December, it still managed to appreciate 10.2% in 2012, the 11th consecutive year of higher prices measured in US dollars.  Silver dropped -14.8% in December, and ended the year -9.8% lower.

I have been recommending to “get ready to buy on strength when it finally arrives”.  That strength is likely to start appearing this week.

Gold
1) The position bought at $1,612.00 on December 22, 2011 was sold on December 28, 2011 at $1582.00, which was its stop-out point.  Loss: $30.00

2) Buy one position at the market.  Gold is presently $1,586.00 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1558.00. (updated 3 January 2011)

3) Buy one position if the Comex spot price trades at $1602.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1572.00. (3 January 2011)

4) Buy one position if the Comex spot price trades at $1620.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1596.00. (updated 3 January 2011)

5) Buy one position on the first Comex close in New York above $1620.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (3 January 2011)

6) Buy one position on the first Comex close in New York above $1644.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (3 January 2011)

Silver
1) The position bought at $29.32 on December 22, 2011 was sold later the same day at $29.08, which was its stop-out point.  Loss: 24¢

2) ) The position bought at $29.60 on December 22, 2011 was sold later the same day at $29.18, which was its stop-out point.  Loss: 42¢

3) Buy one position at the market.  Silver is presently $28.48 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.22. (updated 3 January 2012)

4) Buy one position if the Comex spot price trades at $28.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $28.42. (updated 3 January 2012)

5) Buy one position on the first Comex close in New York above $28.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at more than 55¢ below your purchase price. (updated 3 January 2012)

6) Buy one position on the first Comex close in New York above $30.00.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 3 January 2012)

Gold/Silver Ratio – On the December 27th close in New York, traders unwound at 55.6 their short position in the ratio (long silver and short an equal dollar value of gold) from 53.2 on December 15, 2011 for a loss of 4.5%.  Re-establish this trade (buy silver and sell an equal dollar value of gold) at today’s New York Comex close. (updated 3 January 2012)

Comex options (options are high-risk and therefore not for everyone):
Long one Apr’12 Comex 2000 gold call from $27.70, the November 28, 2011 Comex close.
Long one Mar’12 Comex 40 silver call from $0.66, the November 28, 2011 Comex close. 

Long one Apr’12 Comex 1800 gold call from $63.20, the October 21, 2011 Comex close.
Long one May’12 Comex 40 silver call from $1.812, the October 21, 2011 Comex close. 

Buy the Dec’12 Comex 2000 gold call at the market.  But the Dec’12 Comex 40 silver call at the market.  I’ll use today’s closing price in New York for record keeping.

Hold these calls without any stop-out point. (updated 3 January 2012)

Trading Comments, 22 December 2011 (posted 08h30 CET):

Market liquidity normally dries up around year-end holidays, so this year will probably not be any different.  The lack of liquidity means volatility increases, so that may happen this year too for the next couple of weeks. Regardless, get ready to buy on strength when it finally arrives.

Gold
1) The position bought at $1,631.00 on December 21, 2011 was sold later the same day at $1620.00, which was its stop-out point.  Loss: $11.00

2) Buy one position at the market.  Gold is presently $1,612.00 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $1582.00. (updated 22 December 2011)

3) Buy one position if the Comex spot price trades at $1620.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1598.00. (updated 22 December 2011)

4) Buy one position if the Comex spot price trades at $1642.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1618.00. (updated 22 December 2011)

5) Buy one position on the first Comex close in New York above $1644.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (updated 22 December 2011)

6) Buy one position on the first Comex close in New York above $1715.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (updated 22 December 2011)

Silver
1) The position bought at $29.75 on December 21, 2011 was sold later the same day at $29.42, which was its stop-out point.  Loss: 33¢

2) ) The position bought at $29.08 on December 15, 2011 was sold on December 21, 2011 at $29.28, which was its stop-out point.  Profit: 20¢

3) Buy one position at the market.  Silver is presently $29.32 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.08. (updated 22 December 2011)

4) Buy one position if the Comex spot price trades at $29.60.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $29.18. (updated 22 December 2011)

5) Buy one position on the first Comex close in New York above $30.00.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at more than 55¢ below your purchase price. (updated 22 December 2011)

6) Buy one position on the first Comex close in New York above $30.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 22 December 2011)

Trading Comments, 21 December 2011 (posted 10h00 CET):

As I suspected, December 14th was indeed a selling climax.  It marks the bottom of this correction. Gold and silver are now starting the long climb back, but then again, this climb back toward the recent highs could be quick given all the new shorts that entered over the past couple of weeks. In other words, a spectacular short covering rally remains a real possibility.

Gold
1) The position bought at $1,590.00 on December 15, 2011 was sold later the same day at $1572.00, which was its stop-out point.  Loss: $18.00

2) Buy one position at the market.  Gold is presently $1,631.00 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $1620.00. (updated 21 December 2011)

3) Buy one position if the Comex spot price trades at $1642.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1618.00. (updated 21 December 2011)

4) Buy one position if the Comex spot price trades at $1680.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1652.00. (updated 21 December 2011)

5) Buy one position on the first Comex close in New York above $1715.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (updated 21 December 2011)

6) Buy one position on the first Comex close in New York above $1725.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $35.00 below your purchase price. (updated 21 December 2011)

Silver
1) The position bought at $29.40 on December 16, 2011 was sold on December 19, 2011 at $28.88, which was its stop-out point.  Loss: 52¢

2) Long one position bought at $29.08 on December 15, 2011. Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $29.28. (updated 21 December 2011)

3) Buy one position at the market.  Silver is presently $29.75 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.42. (updated 21 December 2011)

4) Buy one position on the first Comex close in New York above $30.00.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at more than 55¢ below your purchase price. (updated 21 December 2011)

5) Buy one position on the first Comex close in New York above $30.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 21 December 2011)

Gold/Silver Ratio – Traders are short this ratio (long silver and short an equal dollar value of gold) from 53.2 on December 15, 2011.  Stop-out point: unwind this trade on the first Comex close in the ratio above 55.5. (updated 21 December 2011)

Comex options (options are high-risk and therefore not for everyone):
Long one Apr’12 Comex 2000 gold call from $27.70, the November 28, 2011 Comex close.
Long one Mar’12 Comex 40 silver call from $0.66, the November 28, 2011 Comex close. 

Long one Apr’12 Comex 1800 gold call from $63.20, the October 21, 2011 Comex close.
Long one May’12 Comex 40 silver call from $1.812, the October 21, 2011 Comex close. 

Hold these calls without any stop-out point. (updated 21 December 2011)

Trading Comments, 15 December 2011 (posted 12h15 CET):

Yesterday felt like a selling climax.  If so, it will mark the end of this correction.  It was a quick and nasty test of support at the September low. We’ll see if support there continues to hold, but there is no reason to suggest that it won’t.

Nothing fundamental has changed.  We’ve seen smack-downs like this one many times before.  The only unusual thing is that it occurred when it wasn’t end-of-month option expiry.

Gold
1) The position bought at $1,637.00 on December 14, 2011 was sold later the same day at $1617.50, which was its stop-out point.  Loss: $19.50

2) Buy one position at the market.  Gold is presently $1,590.00 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1572.00. (updated 15 December 2011)

3) Buy one position if the Comex spot price trades at $1642.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1618.00. (updated 15 December 2011)

4) Buy one position if the Comex spot price trades at $1680.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1652.00. (updated 15 December 2011)

5) Buy one position on the first Comex close in New York above $1715.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (updated 15 December 2011)

6) Buy one position on the first Comex close in New York above $1725.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $35.00 below your purchase price. (updated 15 December 2011)

Silver
1) The position bought at $30.68 on December 14, 2011 was sold later the same day at $30.375, which was its stop-out point.  Loss: 30.5¢

2) Buy one position at the market.  Silver is presently $29.08 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.42. (updated 15 December 2011)

3) Buy one position if the Comex spot price trades at $29.40.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $28.88. (updated 15 December 2011)

4) Buy one position on the first Comex close in New York above $30.00.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at more than 55¢ below your purchase price. (updated 15 December 2011)

5) Buy one position on the first Comex close in New York above $30.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 15 December 2011)

Gold/Silver Ratio – On the December 14th close in New York, traders unwound at 54.9 their short position in the ratio (long silver and short an equal dollar value of gold) from 53.2 on November 28, 2011 for a loss of 3.2%.  Re-establish this trade (buy silver and sell an equal dollar value of gold) at today’s New York Comex close. (updated 15 December 2011)

Trading Comments, 14 December 2011 (posted 11h30 CET):

For a moment yesterday it looked like the breakout I have been expecting had begun. As we know now, it was short-lived, and we are back to where we started.  Don’t be discouraged by one failed attempt.  Although this has already been a good year for the precious metals (gold presently up 17% with silver basically unchanged), I still expect higher prices as we move toward year-end.

Gold
1) The position bought at $1,664.00 on December 13, 2011 was sold later the same day at $1648.00, which was its stop-out point.  Loss: $16.00

2) Buy one position at the market.  Gold is presently $1,637.00 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1617.50. (updated 14 December 2011)

3) Buy one position if the Comex spot price trades at $1662.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1634.00. (updated 14 December 2011)

4) Buy one position if the Comex spot price trades at $1680.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1652.00. (updated 14 December 2011)

5) Buy one position on the first Comex close in New York above $1715.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (updated 14 December 2011)

6) Buy one position on the first Comex close in New York above $1725.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $35.00 below your purchase price. (updated 14 December 2011)

Silver
1) The position bought at $31.275 on December 13, 2011 was sold later the same day at $31.12, which was its stop-out point.  Loss: 15.5¢

2) The position bought at $31.50 on December 13, 2011 was sold later the same day at $31.30, which was its stop-out point.  Loss: 20¢

3) The position bought at $31.80 on December 13, 2011 was sold later the same day at $31.40, which was its stop-out point.  Loss: 40¢

4) Buy one position at the market.  Silver is presently $30.68 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $30.375. (updated 14 December 2011)

5) Buy one position if the Comex spot price trades at $30.90.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $30.64. (updated 14 December 2011)

6) Buy one position if the Comex spot price trades at $31.12.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $30.88. (updated 14 December 2011)

7) Buy one position on the first Comex close in New York above $32.00.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at more than 55¢ below your purchase price. (updated 14 December 2011)

8) Buy one position on the first Comex close in New York above $32.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 14 December 2011)

Trading Comments, 13 December 2011 (posted 14h15 CET):

The bottom will be in place soon enough.  When the metals eventually turn higher, be ready to buy on strength.

Gold
1) The position bought at $1700.00 on December 12, 2011 was sold later the same day at $1678.00, which was its stop-out point.  Loss: $22.00

2) Buy one position at the market.  Gold is presently $1,664.00 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1648.00. (updated 13 December 2011)

3) Buy one position if the Comex spot price trades at $1680.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1664.00. (updated 13 December 2011)

4) Buy one position if the Comex spot price trades at $1715.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1692.00. (updated 13 December 2011)

5) Buy one position on the first Comex close in New York above $1725.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (updated 13 December 2011)

6) Buy one position on the first Comex close in New York above $1740.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $35.00 below your purchase price. (updated 13 December 2011)

Silver
1) The position bought at $31.48 on December 12, 2011 was sold later the same day at $31.18, which was its stop-out point.  Loss: 30¢

2)  Buy one position at the market.  Silver is presently $31.275 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.12. (updated 13 December 2011)

3) Buy one position if the Comex spot price trades at $31.50.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $31.30. (updated 13 December 2011)

4) Buy one position if the Comex spot price trades at $31.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $31.40. (updated 13 December 2011)

5) Buy one position on the first Comex close in New York above $31.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at more than 55¢ below your purchase price. (updated 13 December 2011)

6) Buy one position on the first Comex close in New York above $32.25.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 13 December 2011)

7) Buy one position on the first Comex close in New York above $32.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 13 December 2011)

Trading Comments, 12 December 2011 (posted 10h00 CET):

There has been more re-testing of support than I was expecting.  Nevertheless, I still believe that the Sept lows in the precious metals marked the end of this correction and that the potential for a spectacular rally remains.

Gold
1) The position bought at $1745.50 on the Comex close on November 30, 2011 was sold on December 5, 2011 at $1728.00, which was its stop-out point.  Loss: $17.50

2) The position bought at $1713.00 on November 28, 2011 was sold this morning at $1692.00, which was its stop-out point.  Loss: $21.00

3) Long one position from $1700.00 bought on December 12, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1678.00. (updated 12 December 2011)

4) Buy one position if the Comex spot price trades at $1715.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold subsequently trades at $1692.00. (updated 12 December 2011)

5) Buy one position on the first Comex close in New York above $1725.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (updated 12 December 2011)

6) Buy one position on the first Comex close in New York above $1740.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $35.00 below your purchase price. (updated 12 December 2011)

Silver
1) The position bought at $31.95 on November 28, 2011 was sold on November 29, 2011 at $31.64, which was its stop-out point.  Loss: 31¢

2) The position bought at $31.80 on November 29, 2011 was sold on November 30, 2011 at $31.40, which was its stop-out point.  Loss: 40¢

3) The position bought at $32.731 on November 30, 2011 was sold on December 5, 2011 at $32.181, which was its stop-out point.  Loss: 55¢

4) Buy one position at the market.  Silver is presently $31.48 as I write, so I will use this price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.18. (updated 12 December 2011)

5) Buy one position if the Comex spot price trades at $31.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $31.40. (updated 12 December 2011)

6) Buy one position if the Comex spot price trades at $32.25.  Stop-out point: sell at an intraday stop-out point if Comex spot silver subsequently trades at $31.94. (updated 12 December 2011)

7) Buy one position on the first Comex close in New York above $32.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 12 December 2011)

8) Buy one position on the first Comex close in New York above $33.40.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 12 December 2011)

Gold/Silver Ratio – Short the ratio (long silver and short an equal dollar value of gold) from 53.2 on November 28, 2011.  Stop-out point: unwind this trade on the first Comex close in the ratio above 54.7. (updated 5 December 2011)

Comex options (options are high-risk and therefore not for everyone):
On November 28, 2011 traders bought the Apr’12 Comex 2000 gold call at $27.70 and the Mar’12 Comex 40 silver call at $0.66.

Long one Apr’12 Comex 1800 gold call from $63.20, the October 21, 2011 Comex close.
Long one May’12 Comex 40 silver call from $1.812, the October 21, 2011 Comex close. 

Hold these calls without any stop-out point. (updated 12 December 2011)

Trading Comments, 28 November 2011 (posted 10h00 CET):

The end-of-month option related weakness has finished.  Looking back months and years from now, we will probably see that the Sept lows in the precious metals marked the end of this correction.

An important technical formation has been developing.  In Sept, silver broke through its July low.  Gold, however, did not.  These different results mark an important non-confirmation, and the implications are very bullish.

Importantly, if gold was going to break its July low and thereby confirm the low in silver (which would signal a longer correction or even possibly, the beginning of a bear market) gold would have done it by now. Enough time has passed.  But not only has gold not confirmed, its trading action has given us every indication that it wants to head higher, which of course is understandable when viewing the underlying fundamental reasons to own gold.  If gold is going higher, then of course silver is going higher too.

Given the low sentiment for the precious metals at the moment, the rally from here should be quite spectacular.  We may not hit $2000 this year, but I expect that price (and silver over $50) in the first half of 2012, and probably in Q1.

Gold
1) The position bought at $1700.00 on November 21, 2011 was sold the same day at $1678.00, which was its stop-out point.  Loss: $22.00

2) Buy one position at the market.  Gold is presently $1713.00, so I will use that price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1692.00. (updated 28 November 2011)

3) Buy one position if the Comex spot price trades at $1700.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1678.00. (updated 28 November 2011)

4) Buy one position on the first Comex close in New York above $1740.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (updated 28 November 2011)

5) Buy one position on the first Comex close in New York above $1805.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (updated 28 November 2011)

Silver
1) The position bought at $32.80 on November 21, 2011 was sold the same day at $32.40, which was its stop-out point.  Loss: 40¢

2) Buy one position at the market.  Silver is presently $31.95, so I will use that price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.64. (updated 28 November 2011)

3) Buy one position if the Comex spot price trades at $31.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.40. (updated 28 November 2011)

4) Buy one position on the first Comex close in New York above $32.30.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 28 November 2011)

5) Buy one position on the first Comex close in New York above $32.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 28 November 2011)

Gold/Silver Ratio – On November 16, 2011, traders unwound at 52.5 to break-even on the ratio sold at 52.5 on October 21, 2011.  The ratio has moved higher, and I recommend re-establishing this trade. Sell the ratio (i.e., buy silver and sell an equal dollar value of gold) at the market.  I will use today’s Comex close for record keeping.  Stop-out point: unwind this trade on the first Comex close in the ratio more than 2.0 points above your entry price. (updated 28 November 2011)

Comex options (options are high-risk and therefore not for everyone):
The Dec’11 1500 Comex gold call expired at $202.40.  So there was a $151.60 profit on the Dec’11 Comex 1500 gold call bought on February 1, 2011 at $50.80.  The profit was $111.70 on the  Dec’11 Comex 1500 gold call bought at $90.70 on May 9, 2011.

Buy the Apr’12 Comex 2000 gold call at the market.  Buy the March’12 Comex 40 silver call at the market.  I’ll use today’s closing price in New York for record keeping.

Long one Apr’12 Comex 1800 gold call from $63.20, the October 21, 2011 Comex close.
Long one May’12 Comex 40 silver call from $1.812, the October 21, 2011 Comex close. 

Hold these calls without any stop-out point. (updated 28 November 2011)

Trading Comments, 12 November 2011 (posted 18h30 CET):

The possibility remains that gold and silver may once more test support at $1700 and $32.50 respectively.  I recommend buying the dip, or an upside breakout.

Gold
1) The position bought at $1626.00 on October 21, 2011 was sold on November 1, 2011 at $1688.00, which was its stop-out point.  Profit: $62.00

2) The position bought at $1651.50 on the Comex close in New York on October 24, 2011 was sold on November 1, 2011 at $1696.00, which was its stop-out point.  Profit: $44.50

3) Buy one position if the Comex spot price trades at $1700.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1678.00. (updated 12 November 2011)

4) Buy one position on an intraday stop at $1805.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (updated 12 November 2011)

5) Buy one position on the first Comex close in New York above $1810.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $25.00 below your purchase price. (updated 12 November 2011)

Silver
1) The position bought at $30.72 on October 21, 2011 was sold on November 1, 2011 at $32.76, which was its stop-out point.  Profit: $2.04

2) The position bought at $31.62 on October 24, 2011 was sold on November 1, 2011 at $32.96, which was its stop-out point.  Profit: $1.34

3) Buy one position if the Comex spot price trades at $32.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $32.40. (updated 12 November 2011)

4) Buy one position on an intraday stop at $35.20.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 12 November 2011)

5) Buy one position on the first Comex close in New York above $35.50.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 12 November 2011)

Gold/Silver Ratio – Short the ratio (i.e., long silver and short an equal dollar value of gold) at 52.5, the closing price on October 21, 2011.  Stop-out point: unwind this trade on the first Comex close in the ratio above 52.4. (updated 12 November 2011)

Comex options (options are high-risk and therefore not for everyone):
Long one Dec’11 Comex 1500 gold call from $50.80, the February 1, 2011 Comex close. 
Long one Dec’11 Comex 1500 gold call from $90.70, the May 9, 2011 Comex close.

Long one Apr’12 Comex 1800 gold call from $63.20, the October 21, 2011 Comex close.
Long one May’12 Comex 40 silver call from $1.812, the October 21, 2011 Comex close. 

Hold these calls without any stop-out point, but sell the Dec’11 calls on expiry. (updated 12 November 2011)

Trading Comments, 27 October 2011 (posted 11h00 CET):

The strong bounce in the metals the past few days indicates my call of a low-risk entry point this past Friday was a good one.  The patience we exercised by waiting on the sidelines for nearly a month has paid off.

I think that last week probably marks a low point that will not again been seen – ever.  That’s a bold call, but as I asked in my last commentary, what has changed? 

Nothing really.  There is a lot of noise coming from European politicians, but they have again failed to address the underlying problem.  There is far too much debt, and more importantly, the present monetary system is broken.  The US continues down the same path of monetary debasement with low interest rates.  The UK is in the middle of another round of QE.  China real estate has begun its inevitable collapse, and Japan is trying to keep a strong yen from causing a deepening economic slump.  In short, the global economic outlook is not bright, nor are the prospects for any national currency.  Gold and silver are still the place to be, and importantly, they remain undervalued.

I expect gold and silver to take a breather until the end of this month as a result of the usual game-playing during option expiry.  But after Nov 1st, I expect both metals to start climbing much higher.  It is highly possible that gold could still reach $2000 this year, which means that silver will again be near – and possibly over – $50 by year-end too. 

I will be very surprised if Nov and Dec are not really big months for both metals.  Consequently, over the next few days, I will be looking for opportunities to add to our current trading positions.

Gold
1) Long from $1626.00 bought at the market on October 21, 2011.  Stop-out point: sell on a stop if Comex spot gold trades at $1688.00. (updated 26 October 2011)

2) Long from $1651.50 bought on the Comex close in New York on October 24, 2011.  Stop-out point: sell on a stop if Comex spot gold trades at $1696.00. (updated 26 October 2011)

Silver
1) Long from $30.72 bought at the market on October 21, 2011. Stop-out point: sell on a stop if Comex spot silver trades at $32.76. (updated 26 October 2011)

2) Long from $31.62 bought at the market on October 24, 2011. Stop-out point: sell on a stop if Comex spot silver trades at $32.96. (updated 26 October 2011)

Gold/Silver Ratio – Short the ratio (i.e., long silver and short an equal dollar value of gold) at 52.5, the closing price on October 21, 2011.  Stop-out point: unwind this trade on the first Comex close in the ratio above 53.4. (updated 26 October 2011)

Comex options (options are high-risk and therefore not for everyone):
Long one Dec’11 Comex 1500 gold call from $50.80, the February 1, 2011 Comex close. 
Long one Dec’11 Comex 1500 gold call from $90.70, the May 9, 2011 Comex close.

Long one Apr’12 Comex 1800 gold call from $63.20, the October 21, 2011 Comex close.
Long one May’12 Comex 40 silver call from $1.812, the October 21, 2011 Comex close. 

Hold these calls without any stop-out point. (updated 26 October 2011)

Trading Comments, 21 October 2011 (posted 08h45 CET):

We’ve been waiting patiently on the sidelines for a low-risk re-entry point.  We are there now.  Yesterday’s sell-off probably marked the low.  One never knows of course, but the probabilities are good that we are headed higher from here.  After all, have any fundamental factors changed?  No, everything is as it was a few weeks ago before this latest slide in the metals began in September.

It is also time to sell the gold/silver ratio again.  I expect that silver is once again going to start outperforming gold.

Lastly, we are still holding some deep in-the-money gold calls.  I want to add to these as well as buy a silver call.

Gold
1) The position bought at $1685.00 on September 23, 2011 was sold the same day at $1656.00, which was its stop-out point.  Loss: $29.00

2) Buy one position at the market.  Gold is trading at $1626.00 as I write, so I will use that price for record keeping. Stop-out point: sell on a stop if Comex spot gold trades at $1608.00. (updated 21 October 2011)

3) Buy one position on the first Comex spot gold close above $1648.00.  Stop-out point: sell on a stop if Comex spot gold trades more than $24 below your purchase price. (updated 21 October 2011)

Silver
1) The position bought at $32.57 on September 23, 2011 was sold the same day at $32.08, which was its stop-out point.  Loss: 49.0¢

2) Buy one position at the market.  Silver is trading at $30.72 as I write, so I will use that price for record keeping. Stop-out point: sell on a stop if Comex spot silver trades at $30.38. (updated 21 October 2011)

3) Buy one position on the first Comex spot price close in New York above $31.40.  Stop-out point: sell on an intraday stop if Comex spot silver trades at more than 55¢ below your purchase price. (updated 21 October 2011)

Gold/Silver Ratio – Sell the ratio (i.e., buy silver and sell an equal dollar value of gold) at the market.  I will use today’s Comex close for record keeping.  Stop-out point: unwind this trade on the first Comex close in the ratio more than 2.0 points above your entry price. (updated 21 October 2011)

Comex options (options are high-risk and therefore not for everyone):
Long one Dec’11 Comex 1500 gold call from $50.80, the February 1, 2011 Comex close. 
Long one Dec’11 Comex 1500 gold call at $90.70, the May 9, 2011 Comex close.

Buy one Apr’12 Comex 1800 gold call at the market (I’ll use the Oct 21st closing price in New York for record keeping).

Buy one May’12 Comex 40 silver call at the market (I’ll use the Oct 21st closing price in New York for record keeping). 

Hold these calls without any stop-out point. (updated 21 October 2011)

Trading Comments, 23 September 2011 (posted 14h45 CET):

Traders were stopped out of their gold positions with good profits.  Traders had no positions in silver.  Long-time readers know that I do not like to try bottom-picking, but the big sell-off the last two days makes gold and silver prices here irresistible.  So I see the current sell-off as an opportunity to buy and again begin re-building long positions in anticipation of higher prices.

Gold
1) The position bought at $1528.70 on the Comex spot close in New York on July 6, 2011 was sold on September 22, 2011 at $1755.00, which was its stop-out point.  Profit: $226.30

2) The position bought at $1512.30 on the Comex spot close in New York on July 5, 2011 was sold on September 22, 2011 at $1739.20, which was its stop-out point.  Profit: $226.90

3) The position bought at $1497.00 bought on July 5, 2011 was sold on September 22, 2011 at $1739.20, which was its stop-out point.  Profit: $242.20

4) Buy one position at the market.  Gold is trading at $1685.00 as I write, so I will use that price for record keeping. Stop-out point: sell on a stop if Comex spot gold trades at $1656.00. (updated 23 September 2011)

5) Buy one position on the first Comex spot gold close above $1715.00.  Stop-out point: sell on a stop if Comex spot gold trades more than $24 below your purchase price. (updated 23 September 2011)

Silver
1) Buy one position at the market.  Silver is trading at $32.57 as I write, so I will use that price for record keeping. Stop-out point: sell on a stop if Comex spot silver trades at $32.08. (updated 23 September 2011)

2) Buy one position on the first Comex spot price close in New York above $33.00.  Stop-out point: sell on an intraday stop if Comex spot silver trades at more than 55¢ below your purchase price. (updated 23 September 2011)

Trading Comments, 17 September 2011 (posted 18h15 CET):

Support under $1840 did not hold, which was contrary to what I was expecting.  Nevertheless, I did note in my previous comment that support under $1800 was solid, which was again proven this week. 

When $1840 broke, a test of $1800 was inevitable.  However, the question remains whether more testing of $1800 is needed?  I don’t think so, but it is possible that gold could move sideways for a couple of weeks.

There are some unusual things happening in the gold market.  I recommend reading this blog posted Wednesday by an FT reporter.
http://ftalphaville.ft.com/blog/2011/09/14/677021/why-gold-forward-rate-inversion-is-important/
It provides some very useful insight, though she reaches some wrong conclusions - probably to be politically correct about gold and not to fan the flames of the Euro banking crisis underway.

I have been following this extraordinary interest rate development very closely.  Weird things actually started happening several months ago, which is one of the reasons I stuck my neck out in various interviews that gold would explode this summer.  It has done okay, but has risen less than I expected.  I think the big explosion starts soon.

My conclusion from what is happening in interest rates is that gold is moving to backwardation, if it is not already in it.  In other words, the LBMA's GOFO is no longer a reliable rate.  I think the banks are just making it up to paint a picture that has some semblance of normalcy.  But things in Europe are anything but normal.  Abnormal relationships in short-term currency vs. gold interest rates make that point clear.  I think that counterparty risk is about to grow in one big nasty step higher. 

The risk of holding national currency (all of them, not just the euro) remains.

The silver chart keeps building support.  Silver interest rates are also out-of-whack.  So I expect silver to break out above $42-$43 at any time.

Gold
1) The position bought at $1548.80 on July 11, 2011 was sold on September 15, 2011 at $1790.00, which was its stop-out point.  Profit: $241.20

2) The position bought at $1836.00 on September 12, 2011 was sold on September 15, 2011 at $1790.00, which was its stop-out point.  Loss: $46.00

3) Long one position from $1497.00 bought on July 5, 2011.  Stop-out point: sell on a stop if Comex spot gold closes in New York below $1770.00. (updated 17 September 2011)

4) Long one position from $1512.30 bought on the Comex spot close in New York on July 5, 2011.  Stop-out point: sell on a stop if Comex spot gold closes in New York below $1770.00. (updated 17 September 2011)

5) Long one position from $1528.70 bought on the Comex spot close in New York on July 6, 2011.  Stop-out point: sell on a stop if Comex spot gold trades at $1755.00.  (updated 17 September 2011)

6) Buy one position on the first Comex spot gold close above $1845.00.  Stop-out point: sell on a stop if Comex spot gold trades more than $24 below your purchase price. (updated 17 September 2011)

7) Buy one position on the first Comex spot gold close above $1890.00.  Stop-out point: sell on a stop if Comex spot gold trades more than $24 below your purchase price. (updated 17 September 2011)

Silver
1) The position bought at $38.48 on August 12, 2011 was sold on September 12, 2011 at $40.25, which was its stop-out point.  Profit: $1.770

2) Buy one position on the first Comex spot price close in New York above $41.00.  Stop-out point: sell on an intraday stop if Comex spot silver trades at more than 55¢ below your purchase price. (updated 17 September 2011)

5) Buy one position on an intraday stop if the Comex spot price close in New York trades at $42.30.  Stop-out point: sell on an intraday stop if Comex spot silver trades at more than 55¢ below your purchase price. (updated 17 September 2011)

Trading Comments, 10 September 2011 (posted 14h15 CET):

Gold made a new record high this past week, as I suspected it might.  But I was surprised by what happened thereafter.  Not only did gold drop back one more time to test support at $1840, it actually dug deeper to test $1800.  That deeper correction may postpone gold’s take-off into the $2000s.  Nevertheless, the probability of gold touching $2000 this month or in October is 51%.  The probability of gold reaching $2000 by the end of the year is 90%.

Support under $1800 appears solid, and any renewed tests of support are not likely to drop back that far.  In other words, this time support under $1840 should hold, so if we do get one more test, buy back the position that was stopped out.  See my recommendation below.

The silver chart keeps building support, so it could break out to the upside at any time.

Gold
1) The position bought at $1588.50 on July 20, 2011 was sold on September 7, 2011 at $1805.00, which was its stop-out point.  Profit: $216.50

2) Long one position from $1497.00 bought on July 5, 2011.  Stop-out point: sell on a stop if Comex spot gold closes in New York below $1770.00. (updated 10 September 2011)

3) Long one position from $1512.30 bought on the Comex spot close in New York on July 5, 2011.  Stop-out point: sell on a stop if Comex spot gold closes in New York below $1770.00. (updated 10 September 2011)

4) Long one position from $1528.70 bought on the Comex spot close in New York on July 6, 2011.  Stop-out point: sell on a stop if Comex spot gold closes in New York below $1770.00. (updated 10 September 2011)

5) Long one position from $1548.80 bought on the Comex spot close in New York on July 11, 2011.  Stop-out point: sell on a stop if Comex spot gold trades at $1790.00. (updated 10 September 2011)

6) Buy one position if Comex spot gold trades at $1836.00.  Stop-out point: sell on a stop if Comex spot gold trades at $1790.00. (updated 10 September 2011)

6) Buy one position on the first Comex spot gold close above $1890.00.  Stop-out point: sell on a stop if Comex spot gold trades more than $24 below your purchase price. (updated 10 September 2011)

7) Buy one position on the first Comex spot gold close above $1912.00.  Stop-out point: sell on a stop if Comex spot gold trades more than $24 below your purchase price. (updated 10 September 2011)

Silver
1) One position bought at $39.101 on August 12, 2011 was sold on September 7, 2011 at $41.00, which was its stop-out point.  Profit: $1.899

2) The second position bought at $39.101 on August 12, 2011 was also sold on September 7, 2011 at $41.00, which was its stop-out point too.  Profit: $1.899

3) Long one position bought at $38.48 on August 12, 2011.  Stop-out point: sell on an intraday stop if Comex spot silver trades at $40.25. (updated 10 September 2011)

4) Buy one position on the first Comex spot price close in New York above $43.50.  Stop-out point: sell on an intraday stop if Comex spot silver trades at more than 55¢ below your purchase price. (updated 10 September 2011)

5) Buy one position on an intraday stop if the Comex spot price close in New York trades at $44.30.  Stop-out point: sell on an intraday stop if Comex spot silver trades at more than 55¢ below your purchase price. (updated 10 September 2011)

Trading Comments, 4 September 2011 (posted 18h00 CET):

The gold chart is difficult to figure out at the moment.  It is definitely bullish, but I’m not sure whether gold is ready to soar.  It might just drop back one more time to test support at $1840 before taking-off. 

We might get an indication of what lies ahead from London trading on Monday, while the US celebrates its Labor Day holiday.  I expect gold to open strong in London.  But we will wait and see if that happens, and more importantly, if it does, whether gold holds the opening highs.  If it does, it will be an indication that gold is ready this week to probe its record high at $1912.

The silver chart is not as bullish as gold, but it looks like silver will keep climbing too.

Gold
1) Long one position from $1497.00 bought on July 5, 2011.  Stop-out point: sell on a stop if Comex spot gold closes in New York below $1700.00. (updated 4 September 2011)

2) Long one position from $1512.30 bought on the Comex spot close in New York on July 5, 2011.  Stop-out point: sell on a stop if Comex spot gold closes in New York below $1710.00. (updated 4 September 2011)

3) Long one position from $1528.70 bought on the Comex spot close in New York on July 6, 2011.  Stop-out point: sell on a stop if Comex spot gold closes in New York below $1720.00. (updated 4 September 2011)

4) Long one position from $1548.80 bought on the Comex spot close in New York on July 11, 2011.  Stop-out point: sell on a stop if Comex spot gold trades at $1770.00. (updated 4 September 2011)

5) Long one position from $1588.50 bought on July 20, 2011.  Stop-out point: sell on a stop if Comex spot gold trades at $1805.00. (updated 4 September 2011)

Silver
1) The position bought at $40.36 on August 17, 2011 was sold on August 24, 2011 at $39.81, which was its stop-out point.  Loss: 55.0¢

2) The position bought at $42.428 on the Comex silver spot close on August 19, 2011 was sold on August 23, 2011 at $41.878, which was its stop-out point.  Loss: 55.0¢

3) Long one position bought at $38.48 on August 12, 2011.  Stop-out point: sell on an intraday stop if Comex spot silver trades at $40.15. (updated 4 September 2011)

4) Long two positions bought on the Comex silver spot close at $39.101 on August 12, 2011.  Stop-out point: sell both positions on an intraday stop if Comex spot silver trades at $41.00. (updated 4 September 2011)

Trading Comments, 12 August 2011 (posted 15h15 CET):

My attempt to bottom-pick silver yesterday did not work, but it is worth trying again.  There are no changes on my gold trading recommendations from yesterday.

Silver
1) The position bought at $38.84 on the Comex silver spot close on August 11, 2011 was sold the same day at $38.42, which was its stop-out point.  Loss: 42.0¢

2) Buy one position at the market, which is presently $38.48 as I write.  So I will use that price for recordkeeping.  Stop-out point: sell on an intraday stop if Comex spot silver trades at $38.24. (updated 12 August 2011)

3) Buy one position on the first Comex spot price close in New York above $38.80.  Stop-out point: sell on an intraday stop if Comex spot silver trades at more than 55¢ below your purchase price. (updated 12 August 2011)

4) Buy one position on the first Comex spot price close in New York above $39.10.  Stop-out point: sell on an intraday stop if Comex spot silver trades at more than 55¢ below your purchase price. (updated 12 August 2011)

5) Buy one position on an intraday stop if the Comex spot price close in New York trades at $40.36.  Stop-out point: sell on an intraday stop if Comex spot silver trades at more than 55¢ below your purchase price. (updated 12 August 2011)

6) Buy one position on the first Comex spot price close in New York above $42.30.  Stop-out point: sell on an intraday stop if Comex spot silver trades at more than 55¢ below your purchase price. (updated 12 August 2011)

Trading Comments, 11 August 2011 (posted 19h15 CET):

My summer explosion thesis is proving accurate, with both gold and silver accelerating on schedule as mentioned in the last alert.  There is nothing to do now with gold, except tighten up the stops.  Volatility is increasing, so I will keep the stop-out points loose for the time being.  I want to give this uptrend every opportunity to move higher, which I expect it will.  I therefore want to ride this trend with a large trading position and will use the loose stops to address the higher volatility.  In the hope that gold will head higher, I will eventually tighten up the stops significantly.

Silver has been left in the dust, but that is about to change I expect.  So we need to again try building a silver trading position.

A number of people have asked me, how did I know to build up a big gold position instead of silver?  It was not planned that way.  It was a result of applying my trading techniques consistently.  The outcome is a direct result of market action, not any foreknowledge or predictive powers. 

My guess that gold and silver would explode this summer (which silver has not yet done of course) is simply based on logic and experience.

Gold
1) Long one position from $1497.00 bought on July 5, 2011.  Stop-out point: sell on a stop if Comex spot gold closes in New York below $1660.00. (updated 11 August 2011)

2) Long one position from $1512.30 bought on the Comex spot close in New York on July 5, 2011.  Stop-out point: sell on a stop if Comex spot gold closes in New York below $1660.00. (updated 11 August 2011)

3) Long one position from $1528.70 bought on the Comex spot close in New York on July 6, 2011.  Stop-out point: sell on a stop if Comex spot gold closes in New York below $1660.00. (updated 11 August 2011)

4) Long one position from $1548.80 bought on the Comex spot close in New York on July 11, 2011.  Stop-out point: sell on a stop if Comex spot gold trades at $1660.00. (updated 11 August 2011)

5) Long one position from $1588.50 bought on July 20, 2011.  Stop-out point: sell on a stop if Comex spot gold trades at $1660.00. (updated 11 August 2011)

Silver
1) The position bought at $38.148 on the Comex silver spot close on July 12, 2011 was sold on August 4, 2011 at $38.82, which was its stop-out point.  Profit: 67.2¢

2) The position bought at $40.15 on July 29, 2011 was sold on August 4, 2011 at $39.50, which was its stop-out point.  Loss: 65.0¢

3) The position bought at $41.747 on the Comex silver spot close on August 3, 2011 was sold on August 4, 2011 at $41.197, which was its stop-out point.  Loss: 55.0¢

4) Buy one position at the market, which is presently $38.84 as I write.  So I will use that price for recordkeeping.  Stop-out point: sell on an intraday stop if Comex spot silver trades at $38.42. (updated 11 August 2011)

5) Buy one position on the first Comex spot price close in New York above $40.36.  Stop-out point: sell on an intraday stop if Comex spot silver trades at more than 55¢ below your purchase price. (updated 11 August 2011)

6) Buy one position on the first Comex spot price close in New York above $42.30.  Stop-out point: sell on an intraday stop if Comex spot silver trades at more than 55¢ below your purchase price. (updated 11 August 2011)

Gold/Silver Ratio – On August 8, 2011 traders unwound at 43.4 the short ratio trade (i.e., long silver and short an equal dollar value of gold) established at 43.2 on June 30, 2011.  The loss was 0.2 points.

Trading Comments, 29 July 2011 (posted 15h15 CET):

Following on from my last comments, the correction was more than “a one or two-day event”, but gold indeed held support at $1,600.  If my summer explosion thesis holds, look for both gold and silver to start accelerating from here.

Gold
1) Long one position from $1497.00 bought on July 5, 2011.  Stop-out point: sell at stop-out point if Comex spot gold closes in New York below $1572.00. (updated 29 July 2011)

2) Long one position from $1512.30 bought on the Comex spot close in New York on July 5, 2011.  Stop-out point: sell at stop-out point if Comex spot gold closes in New York below $1572.00. (updated 29 July 2011)

3) Long one position from $1528.70 bought on the Comex spot close in New York on July 6, 2011.  Stop-out point: sell at stop-out point if Comex spot gold closes in New York below $1596.00. (updated 29 July 2011)

4) Long one position from $1548.80 bought on the Comex spot close in New York on July 11, 2011.  Stop-out point: sell at stop-out point if Comex spot gold trades at $1602.00. (updated 29 July 2011)

5) Long one position from $1588.50 bought on July 20, 2011.  Stop-out point: sell at stop-out point if Comex spot gold trades at $1602.00. (updated 29 July 2011)

Silver
1) The position bought at $39.175 on July 20, 2011 was sold on July 22, 2011 at $38.88, which was its stop-out point.  Loss: 29.5¢

2) The position bought at $40.113 the Comex spot silver close in New York on July 20, 2011 was sold on July 28, 2011 at $39.563, which was its stop-out point.  Loss: 55.0¢

3) Long from $38.148 bought on the Comex silver spot close on July 12, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $38.82. (updated 29 July 2011)

4) Buy one position at the market, which is presently $40.15 as I write.  So I will use that price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $39.50. (updated 29 July 2011)

5) Buy one position on the first Comex spot price close in New York above $40.60.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 29 July 2011)

Gold/Silver Ratio – Traders are short the ratio (i.e., long silver and short an equal dollar value of gold) from 43.2 on June 30, 2011.  Stop-out point: unwind this trade on the first Comex close in the ratio in New York above 43.2. (updated 29 July 2011)

Trading Comments, 20 July 2011 (posted 04h00 CET):

My expectation is that this present correction is a one or two-day event.  So I believe that now is a good time to add to our trading positions. 

The interesting development to watch is whether Asian demand for physical metal picks up under $1,600.  I expect it will, and if I am right, then support under $1,600 now being tested will hold.

Gold
1) Long one position from $1497.00 bought on July 5, 2011.  Stop-out point: sell at stop-out point if Comex spot gold closes in New York below $1547.50. (updated 20 July 2011)

2) Long one position from $1512.30 bought on the Comex spot close in New York on July 5, 2011.  Stop-out point: sell at stop-out point if Comex spot gold closes in New York below $1547.50. (updated 20 July 2011)

3) Long one position from $1528.70 bought on the Comex spot close in New York on July 6, 2011.  Stop-out point: sell at stop-out point if Comex spot gold closes in New York below $1572.00. (updated 20 July 2011)

4) Long one position from $1548.80 bought on the Comex spot close in New York on July 11, 2011.  Stop-out point: sell at stop-out point if Comex spot gold trades at $1572.00. (updated 20 July 2011)

5) Buy one position at the market, which is presently $1588.50 as I write.  So I will use that price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1572.00. (updated 20 July 2011)

Silver
1) The position bought at $34.170 on July 5, 2011 was sold on July 12, 2011 at $34.95, which was its stop-out point.  Profit: 78.0¢

2) The position bought at $34.820 on July 5, 2011 was sold on July 12, 2011 at $34.95, which was its stop-out point.  Profit: 13.0¢

3) The position bought at $35.050 on July 5, 2011 was sold on July 12, 2011 at $34.95, which was its stop-out point.  Loss: 10.0¢

4) The position bought at $35.402 on the Comex spot silver close on July 5, 2011 was sold on July 12, 2011 at $35.475, which was its stop-out point.  Profit: 7.3¢

5) Long from $38.148 bought on the Comex silver spot close on July 12, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $38.775. (updated 20 July 2011)

6) Buy one position at the market, which is presently $39.175 as I write.  So I will use that price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $38.880. (updated 20 July 2011)

7) Buy one position on the first Comex spot price close in New York above $39.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 20 July 2011)

Gold/Silver Ratio – Traders are short the ratio (i.e., long silver and short an equal dollar value of gold) from 43.2 on June 30, 2011.  Stop-out point: unwind this trade on the first Comex close in the ratio in New York above 44.0. (updated 20 July 2011)

Trading Comments, 6 July 2011 (posted 23h00 CET):

The probability continues to improve that the correction in the precious metals has ended and gold and silver’s long-term uptrends have resumed.  Another retest of $1500 and $35 remains possible of course.  But continued strength over the next few days will provide meaningful evidence that a new record high in gold is imminent and that $40+ silver is coming soon.  I am attempting to build up a large trading position in anticipation of a spectacular rise in gold and silver prices this summer.

Gold
1) Long one position from $1497.00 bought on July 5, 2011.  Stop-out point: sell at stop-out point if Comex spot gold trades at $1507.50. (updated 6 July 2011)

2) Long one position from $1512.30 bought on the Comex spot close in New York on July 5, 2011.  Stop-out point: sell at stop-out point if Comex spot gold trades at $1521.50. (updated 6 July 2011)

3) Long one position from $1528.70 bought on the Comex spot close in New York on July 6, 2011.  Stop-out point: sell at stop-out point if Comex spot gold closes in New York below $1521.50. (updated 6 July 2011)

4) Buy one position on the first Comex spot close in New York over $1,548.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 6 July 2011)

Silver
1) Long from $34.170 bought on July 5, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver closes in New York below $34.950. (updated 6 July 2011)

2) Long from $34.820 bought on July 5, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $34.950. (updated 6 July 2011)

3) Long from $35.050 bought on July 5, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $34.950. (updated 6 July 2011)

4) Long from $35.402 bought on the Comex spot silver close on July 5, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $35.475. (updated 6 July 2011)

5) Buy one position on the first Comex spot price close in New York above $36.80.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 5 July 2011)

Gold/Silver Ratio – Traders are short the ratio (i.e., long silver and short an equal dollar value of gold) from 43.2 on June 30, 2011.  Stop-out point: unwind this trade on the first Comex close in the ratio in New York above 44.6. (updated 6 July 2011)

Trading Comments, 5 July 2011 (posted 04h30 CET):

There was yet another test of support on Thursday and Friday, and again the previous lows are holding.  Today the precious metals have started to climb, which means it is once again time to build up our long positions.

Gold
1) The position bought at $1510.70 on June 29, 2011 was sold on June 30, 2011 at $1492.50, which was its stop-out point.  Loss: $18.20

2) Buy one position at the market, which is presently $1497.00 as I write.  So I will use that price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1482.00. (updated 5 July 2011)

3) Buy one position on the first Comex spot close in New York over $1,504.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 5 July 2011)

4) Buy one position on the first Comex spot close in New York over $1,516.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 5 July 2011)

Silver
1) The position bought at $34.82 on June 29, 2011 was sold on June 30, 2011 at $34.48, which was its stop-out point.  Loss: 34¢

2) The position bought at $35.05 on June 29, 2011 was sold on June 30, 2011 at $34.50, which was its stop-out point.  Loss: 55¢

3) The position bought at $34.60 on June 30, 2011 was sold on June 30, 2011 at $34.30, which was its stop-out point.  Loss: 30¢

4) Buy one position at the market, which is presently $34.17 as I write.  So I will use that price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $33.94. (updated 5 July 2011)

5) Buy one position if Comex spot silver trades at $34.82.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 30¢ below your purchase price. (updated 5 July 2011)

6) Buy one position on an intraday stop if Comex spot silver trades at $35.05.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 5 July 2011)

7) Buy one position on the first Comex spot price close in New York above $35.40.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 5 July 2011)

Gold/Silver Ratio – Short the ratio (i.e., long silver and short an equal dollar value of gold) from 43.2 on June 30, 2011.  Stop-out point: unwind this trade on the first Comex close in the ratio in New York above 44.8. (updated 5 July 2011)

Trading Comments, 30 June 2011 (posted 03h00 CET):

The precious metals got one more test of support on Monday and Tuesday.  Today’s big jump indicates that it is once again time to build up our long positions.

Gold
1) The position bought at $1515.00 on the Comex spot close in New York on June 13, 2011 was sold on June 23, 2011 at $1531.50, which was its stop-out point.  Profit: $16.50

2) The two positions bought at $1538.60 on the Comex spot close in New York on June 17, 2011 were sold on June 23, 2011 at $1536.50, which was their stop-out point.  Loss: $4.20

3) The position bought at $1552.90 on the Comex spot close in New York on June 22, 2011 was sold on June 23, 2011 at $1536.90, which was its stop-out point.  Loss: $16.00

4) Buy one position at the market, which is presently $1510.70 as I write.  So I will use that price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1492.50. (updated 30 June 2011)

5) Buy one position on the first Comex spot close in New York over $1,526.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 30 June 2011)

6) Buy one position on the first Comex spot close in New York over $1,538.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 30 June 2011)

Silver
1) The position bought at $36.35 on June 21, 2011 was sold on June 23, 2011 at $35.80, which was its stop-out point.  Loss: 55¢

2) The position bought at $36.00 on June 21, 2011 was sold on June 23, 2011 at $35.60, which was its stop-out point.  Loss: 40¢

3) Buy one position at the market, which is presently $34.82 as I write.  So I will use that price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $34.48. (updated 30 June 2011)

4) Buy one position if Comex spot silver trades at $34.60.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 30¢ below your purchase price. (updated 30 June 2011)

4) Buy one position on an intraday stop if Comex spot silver trades at $35.05.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 30 June 2011)

5) Buy one position on the first Comex spot price close in New York above $35.40.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 30 June 2011)

6) Buy one position on the first Comex spot price close in New York above $36.40.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 30 June 2011)

Gold/Silver Ratio
1) On June 27 traders unwound at 44.6 their short trade of the ratio (i.e., they were long silver and short an equal dollar value of gold) from 43.6 on June 13, 2011.  Loss: 2.2%

2) Sell the ratio (i.e., buy silver and sell an equal dollar value of gold) on the June 30th Comex close.  Stop-out point: unwind this trade on the first Comex close in the ratio in New York above 44.8. (updated 30 June 2011)

Trading Comments, 21 June 2011 (posted 013h15 CET):

The backing-and-filling in the precious metals is nearly over.  It will probably end just before or just after the FOMC announcement due tomorrow.  Thereafter, I expect strength in both precious metals going into the 3-day July 4th US-holiday weekend.  Get ready for a new record high in gold and silver back in the $40s, which is a good possibility before July 4th.

Gold
1) The position bought at $1,522.00 on June 14, 2011 was sold the same day at $1,512.50, which was its stop-out point.  Loss: $9.50

2) Long one position from $1515.00 bought on the Comex spot close in New York on June 13, 2011.  Stop-out point: sell at stop-out point if Comex spot gold closes in New York below $1531.50. (updated 21 June 2011)

3) Long two positions from $1538.60 bought on the Comex spot close in New York on June 17, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1536.50. (updated 21 June 2011)

4) Buy one position on the first Comex spot close in New York over $1,548.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 21 June 2011)

5) Buy one position on the first Comex spot close in New York over $1,560.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 21 June 2011)

Silver
1) The position bought at $35.06 on June 14, 2011 was sold the same day at $34.78, which was its stop-out point.  Loss: 28¢

2) The position bought at $35.65 on June 15, 2011 was sold the same day at $35.25, which was its stop-out point.  Loss: 40¢

3) Buy one position if Comex spot silver trades at $36.00.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 40¢ below your purchase price. (updated 21 June 2011)

4) Buy one position on an intraday stop if Comex spot silver trades at $36.35.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 21 June 2011)

5) Buy one position on the first Comex spot price close in New York above $37.20.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 21 June 2011)

6) Buy one position on the first Comex spot price close in New York above $38.50.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 21 June 2011)

Gold/Silver Ratio – Short the ratio (i.e., long silver and short an equal dollar value of gold) from 43.6 on June 13, 2011.  Stop-out point: unwind this trade on the first Comex close in the ratio in New York above 43.8. (updated 21 June 2011)

Trading Comments, 14 June 2011 (posted 08h45 CET):

Gold and silver are in buying zones.  My attempt to bottom-pick silver was the right day, but too high a price. 

Of course, there may be more backing-and-filling as the correction grinds on.  And this summer for the precious metals could end up being a repeat of last summer – and indeed, like most summers – that nothing happens until the end of August.  Then again, it could be like the summer of 1982 when the gold price rose 50% by the end of September.  Time will tell.

Gold
1) Long one position from $1515.00 bought on the Comex spot close in New York on June 13, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1507.50. (updated 14 June 2011)

2) Buy one position at the market, which is presently $1522.00 as I write.  So I will use that price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1512.50. (updated 14 June 2011)

3) Buy one position on the first Comex spot close in New York over $1,534.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 13 June 2011)

4) Buy one position on the first Comex spot close in New York over $1,538.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 13 June 2011)

Silver
1) The position bought at $35.65 on June 13, 2011 was sold the same day at $35.10, which was its stop-out point.  Loss: 55¢

2) Buy one position at the market, which is presently $35.06 as I write.  So I will use that price for recordkeeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $34.78. (updated 14 June 2011)

3) Buy one position on an intraday stop if Comex spot silver trades at $35.65.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 40¢ below your purchase price. (updated 13 June 2011)

4) Buy one position on an intraday stop if Comex spot silver trades at $36.35.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 40¢ below your purchase price. (updated 13 June 2011)

5) Buy one position on the first Comex spot price close in New York above $37.20.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 13 June 2011)

6) Buy one position on the first Comex spot price close in New York above $38.50.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 13 June 2011)

Gold/Silver Ratio - Short the ratio (i.e., long silver and short an equal dollar value of gold) from 43.6 on June 13, 2011.  Stop-out point: unwind this trade on the first Comex close in the ratio in New York above 44.5. (updated 13 June 2011)

Trading Comments, 13 June 2011 (posted 09h15 CET):

Think about the change in sentiment toward the precious metals that has taken place over the past six weeks.  Even though nothing has changed the underlying factors favorable to the precious metals, gold and particularly silver have moved from dominating the headlines to barely a mention by anyone.  This observation describes the way corrections work, so this current one is typical. 

Another point to note is the basing pattern the precious metal prices have been forming.  It too is typical for a correction.

From their chart pattern and the change in sentiment, we can conclude that the precious metals correction is nearing its end.  Today’s price drop in silver is bringing this metal toward my buy point for which we have been waiting the past week.  I will again attempt to bottom-pick.  We will see whether support holds.  If it does, be ready to buy gold and silver on strength, with buy stops above the market.

Gold
1) The position bought at $1,546.50 on the Comex spot close in New York on June 6th was sold on June 2, 2011 at $1,538.00, which was its stop-out point.  Loss: $8.50

2) Buy one position on the first Comex spot close in New York below $1,524.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 13 June 2011)

3) Buy one position on the first Comex spot close in New York over $1,534.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 13 June 2011)

4) Buy one position on the first Comex spot close in New York over $1,538.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 13 June 2011)

Silver
1) The position bought at $37.423 on the Comex spot close on June 9, 2011 was sold on June 10th at $36.873, which was its stop-out point.  Loss: 55¢

2) Buy one position if Comex spot silver trades at $35.65.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price.  If stopped out, buy one position on an intraday stop if Comex spot silver trades at $35.65.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 40¢ below your purchase price. (updated 13 June 2011)

3) Buy one position on an intraday stop if Comex spot silver trades at $36.35.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 40¢ below your purchase price. (updated 13 June 2011)

4) Buy one position on the first Comex spot price close in New York above $37.20.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 13 June 2011)

5) Buy one position on the first Comex spot price close in New York above $38.50.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 13 June 2011)

Gold/Silver Ratio - Sell the ratio (i.e., buy silver and sell an equal dollar value of gold) on the first Comex close of the ratio above 43.5.  I’ll set a stop-out price after this position is filled. (updated 13 June 2011)

Trading Comments, 7 June 2011 (posted 015h45 CET):

Correction - Buy one position on the first Comex silver spot price close in New York above $37.20 [not $36.20].  Apologies for the misprint.

Trading Comments, 7 June 2011 (posted 09h15 CET):

The evidence continues to mount that the low point of this correction is probably behind us.  But we may have more back-&-filling to re-test support.  For now, gold is leading, so the gold/silver ratio may still reach my mid-40s target.  When this ratio starts falling again, it will be another signal the correction has ended.

Gold
1) The position bought at $1,523.20 00 on the Comex spot close in New York on May 24th was sold on June 2, 2011 at $1,528.50, which was its stop-out point.  Profit: $5.30

2) Long one position from $1,546.50 bought on the Comex spot close in New York on June 6, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1.538.00. (updated 7 June 2011)

3) Buy one position on the first Comex spot close in New York below $1,524.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 7 June 2011)

4) Buy one position on the first Comex spot close in New York over $1,558.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 7 June 2011)

Silver
1) Buy one position if Comex spot silver trades at $35.65.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 7 June 2011)

2) Buy one position on the first Comex spot price close in New York above $36.20.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 7 June 2011)

3) Buy one position on the first Comex spot price close in New York above $38.50.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 7 June 2011)

Gold/Silver Ratio - Sell the ratio (i.e., buy silver and sell an equal dollar value of gold) on the first Comex close of the ratio above 43.8.  I’ll set a stop-out price after this position is filled. (updated 7 June 2011)

Trading Comments, 29 May 2011 (posted 14h45 CET):

The low point of this correction is probably behind us.  But I am not yet convinced that the correction has ended.  In other words, even though support under $1,500 on gold and $35 on silver has held, there may be some more testing of support before the precious metals head higher.  The objective should be to buy on strength, when it finally arrives.

Gold
1) The position bought at $1,505.00 on the London AM fix on May 9th was sold on May 11th at $1,496.00, which was its stop-out point.  Loss: $9.00

2) Long one position from $1,523.20 bought on the Comex spot close in New York on May 24, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1.528.50. (updated 29 May 2011)

3) Buy one position on the first Comex spot close in New York over $1,542.50.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 29 May 2011)

Silver
1) The position bought at $37.50 On May 10, 2011 was sold on May 11th at $36.95, which was its stop-out point.  Loss: 55¢

2) Buy one position on the first Comex spot price close in New York above $38.50.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 29 May 2011)

 Gold/Silver Ratio - Sell the ratio (i.e., buy silver and sell an equal dollar value of gold) on the first Comex close of the ratio above 44.  I’ll set a stop-out price after this position is filled. (updated 29 May 2011)

Trading Comments, 10 May 2011 (posted 08h45 CET):

The precious metals began this week on strength, which is encouraging.  This strength is an indication that last week’s low was a selling climax, and these rare events mark important lows.

Gold
1) Long from $1,505.00 bought on the London AM fix on May 9th.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1,496.00. (updated 10 May 2011)

2) Buy one position on the first Comex spot close in New York over $1,522.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 10 May 2011)

Silver
1) The position bought on the May 9th London silver fix at $38.00 was sold the same day at $37.45, which was its stop-out point.  Loss: 55¢

2) Buy one position at $37.50 or on the first London fix or a Comex spot price close in New York above $38.00, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 10 May 2011)

3) Buy one position on the first Comex spot price close in New York above $39.60.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 10 May 2011)

Comex options (options are high-risk and therefore not for everyone):
Long one July’11 Comex 55.00 silver call at $1.189, the April 26, 2011 Comex close. 
Long one Dec’11 Comex 1500 gold call from $50.80, the February 1, 2011 Comex close. 

Long one Dec’11 Comex 1500 gold call at $90.70, the May 9th closing price in New York.

Hold these calls without any stop-out point. (updated 10 May 2011)

Trading Comments, 8 May 2011 (posted 12h45 CET):

Last week’s drubbing taken by the precious metals illustrates why I almost always use stop-out points.  We exited our gold positions and the gold/silver ratio trade with good profits, and limited our loss on silver in my untimely attempt to ‘bottom-pick’ the market. 

In my last comments, I mentioned “luck” and “skill”.  This time I would like to mention experience, which kept me on the sidelines last week.  There is an old adage often bandied about by traders and one that I adhere to – ‘Don’t try to catch a falling knife’.  The silver price last week was just that – a falling knife.

This week should be different.  The leveraged players have been forced out of the precious metals and the euro.  The dollar’s dead-cat bounce is probably over.  Yet the dollar’s problems remain.  So it is time to again start building a trading position, except for the gold/silver ratio. 

We took a big profit last week on this trade of the gold/silver ratio that was initiated last summer.  For now, I’m going to recommend letting this ratio settle down somewhat before entering another trade.

Gold
1) The position bought at $1,492.00 on April 26, 2011 was sold at $1502.50 on May 5, 2011, which was its stop-out point.  Profit: $10.50 (updated 8 May 2011)

2) The position bought at $1,395.50 on March 15, 2011 was sold at $1490.00 on May 5, 2011, which was its stop-out point.  Profit: $94.50 (updated 8 May 2011)

3) Buy one position at $1,485.00 or the first London fix over $1,498.00, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 8 May 2011)

Silver
1) The position bought at $46.12 on May 2, 2011 was sold the same day at $45.77, which was its stop-out point.  Loss: 35¢

2) Buy one position at $34.50 or on the first London fix or a Comex spot price close in New York above $36.45, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 55¢ below your purchase price. (updated 8 May 2011)

Comex options (options are high-risk and therefore not for everyone):
Long one July’11 Comex 55.00 silver call at $1.189, the April 26, 2011 Comex close. 
Long one Dec’11 Comex 1500 gold call from $50.80, the February 1, 2011 Comex close. 

Buy one Dec’11 Comex 1500 gold call at the market (I’ll use the May 9th closing price in New York for record keeping).  The jump in volatility makes the long-dated silver calls expensive.  Otherwise, I would be recommending buying Dec’11 40 calls.

Hold these calls without any stop-out point. (updated 8 May 2011)

Gold/Silver Ratio – On May 5, 2011, traders unwound at 40.9 their trade of the gold/silver ratio (i.e., they were long silver and short an equal dollar value of gold) from 67.4 on the June 11, 2010 close in New York.  Profit: 26.5 ticks, or 39.3% (updated 8 May 2011)

Trading Comments, 28 April 2011 (posted 11h45 CET):

Blast off !  For gold at least, but silver will follow soon by eventually hurdling above $50.  But it’s time for gold to take the limelight.

We managed to add to our gold position on the price drop on Tuesday.  We also bought silver, but were stopped out – just barely.  I aim to get back in on silver, by buying a dip or on a break-out.  But I would like to make a more general point.

It is impossible to accurately pick buy-spots in advance like those I have been recommending.  Therefore, do not take my recommendations too literally.  View them to be general areas for buying.  Buying gold at $1492 this week was luck, not skill.  The skill part only came in with the recommendation to buy the dip that I was expecting.

Gold
1) Long from $1395.50 bought on March 15, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1490.00. (updated 28 April 2011)

2) Long from $1,492.00 bought on April 26, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1502.50. (updated 28 April 2011)

Silver
1) The position bought at $45.10 April 26, 2011 was sold the same day at $44.75, which was its stop-out point.  Loss: 35¢

2) Buy one position at $46.12 or on the first Comex spot price close in New York above $48.75, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 35¢ below your purchase price. (updated 28 April 2011)

Trading Comments, 26 April 2011 (posted 07h30 CET):

The precious metals are doing one of their usual month-end dips in price as we approach option expiry.  There is no technical damage to their price charts, so I can only assume that we are at or close to an important buying opportunity.  The bull market in the precious metals does not end here.

Gold
1) The position bought at $1427.75 on the London AM fix on March 21, 2011 was sold today, April 26th, at $1497.50, which was its stop-out point.  Profit: $69.75

2) Long from $1395.50 bought on March 15, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1486.00. (updated 26 April 2011)

3) Buy one position at $1,492.00 or on the first Comex spot close in New York above $1,508, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $16 below your purchase price. (updated 26 April 2011)

Silver
1) The position bought at $35.933 on the Comex spot gold close on March 11, 2011 was sold today, April 26th, at $47.50, which was its stop-out point.  Profit: $11.567

2) Buy one position at $45.10 or on a stop if the Comex spot price trades at $46.80, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 35¢ below your purchase price. (updated 26 April 2011)

Comex options (options are high-risk and therefore not for everyone):
On April 26th, sold at $7.159 the remaining May’11 Comex 40.00 silver call bought at 36.2¢ on February 22, 2010.  Traders used part of these proceeds to buy one July’11 Comex 55.00 silver call at $1.189.

Long one Dec’11 Comex 1500 gold call from $50.80, the February 1, 2011 Comex close. 

Hold these calls without any stop-out point. (updated 26 April 2011)

Trading Comments, 25 April 2011 (posted 11h00 CET):

Both gold and silver opened strong in Europe this morning on the back of good buying in Asia.  Today could be volatile because of the limited liquidity, with most of Europe being closed.  But it is worth noting that both metals have formed an upside break-away gap on their chart, which is often a sign that the metals are going to continue running higher.  So there is not much to do but raise our stop-out points to protect profits, just in case the metals retrace.

Gold
1) Long from $1395.50 bought on March 15, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1486.00. (updated 25 April 2011)

2) Long from $1427.75 bought on the London AM fix on March 21, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1497.50. (updated 25 April 2011)

Silver
Long from $35.933 bought on the Comex spot gold close on March 11, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $47.50. (updated 25 April 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 39. (updated 25 April 2011)

Comex options (options are high-risk and therefore not for everyone):
On April 18th, sold at $3.963 one of May’11 Comex 40.00 silver calls bought at 36.2¢ on February 22, 2010.

We’ll let the remaining silver call run on the possibility that silver is going to surprise everyone on the upside.  Because the May Comex options expire tomorrow, roll it into a July’11 Comex 55.00 silver call.  So sell the May’11 Comex 40.00 silver call bought at 36.2¢ on the February 22, 2010 Comex close and use the proceeds to purchase one July’11 Comex 55.00 silver call.  I’ll use today’s closing price for record keeping.

Long one Dec’11 Comex 1500 gold call from $50.80, the February 1, 2011 Comex close.  Hold this gold call without any stop-out point. (updated 25 April 2011)

Trading Comments, 17 April 2011 (posted 11h30 CET):

Gold is finally joining silver in showing the strength of their powerful long-term uptrends.  There is nothing from a technical or fundamental point of view to suggest that the metals are going to stop at current levels, so assume they both have more to run in the short-term (i.e., next couple of months) as they both work higher within their multi-year uptrends.  All we really need to do now is tighten up our stop-out points to protect profits just in case the metals reverse, which is always a possibility of course.  But I suspect that my targets of $50 silver and $1800 gold will soon be reached, probably before the end of June.

Gold
1) Long from $1395.50 bought on March 15, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1442.50. (updated 17 April 2011)

2) Long from $1427.75 bought on the London AM fix on March 21, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1452.50. (updated 17 April 2011)

Silver
Long from $35.933 bought on the Comex spot gold close on March 11, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $39.50. (updated 17 April 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 41. (updated 17 April 2011)

Comex options (options are high-risk and therefore not for everyone):
Long two May’11 Comex 40.00 silver calls from 36.2¢, the February 22, 2010 Comex close.  Sell one of these on Monday, April 18.  I’ll use the closing price for record keeping.  My objective is to take a nice profit that more than covers the capital outlay for both options, while leaving the other option to run with the silver price for the time being.  I’ll make a recommendation on this option before it expires on April 26.

Long one Dec’11 Comex 1500 gold call from $50.80, the February 1, 2011 Comex close.  Hold these gold calls without any stop-out point. (updated 17 April 2011)

Trading Comments, 29 March 2011 (posted 010h15 CET):

Support at $1420 is being well and truly tested.  So far it is holding.  Importantly, I expect support at $1420 to continue repelling any attacks by the shorts, like the one yesterday when gold fell all the way to $1410 on the usual take-down engineered by the shorts during Comex option expiry.  There may be similar tests over the next few days because there are also over-the-counter options still to expire later this week.  This capping being placed on gold at these prices should be finished by Thursday morning.  Look for higher prices next week as gold and silver resume their uptrend.

Gold
1) Long from $1395.50 bought on March 15, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1402.00. (updated 29 March 2011)

2) Long from $1427.75 bought on the London AM fix on March 21, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1406.50. (updated 29 March 2011)

Silver
1) The position bought at $36.16 on the London silver fix on March 21, 2011 was sold on March 22, 2011 at $35.86, which was its stop-out point.  Loss: 30.0¢

2) Long from $35.933 bought on the Comex spot gold close on March 11, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $36.52. (updated 29 March 2011)

Trading Comments, 19 March 2011 (posted 012h00 CET):

It looks increasingly likely that the correction in the precious metals ended on March 15th.  Both gold and silver re-tested the low made that day, which held.  So we will continue to follow the same strategy outlined in my last comments, namely, continue re-building our trading position.

Gold
1) Long from $1395.50 bought on March 15, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1397.50. (updated 19 March 2011)

2) Buy one position at $1408.00 or on the 21 March London AM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1402.00. (updated 19 March 2011)

Silver
1) The position bought at $34.135 on March 15, 2011 was sold on March 16, 2011 at $33.85, which was its stop-out point.  Loss: 28.5¢

2) Long from $35.933 bought on the Comex spot gold close on March 11, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $34.62. (updated 19 March 2011)

3) Buy one position on the 21 March London silver fix or at $34.90, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 30¢ below your purchase price. (updated 19 March 2011)

Trading Comments, 15 March 2011 (posted 014h45 CET):

Today’s action so far is a repeat of Friday’s, namely, a test of support.  We will see whether we get strength going into the close like we did Friday.  Regardless, having been stopped out with good profits, it makes sense to start re-building our trading position here.

Gold
1) The position bought at $1412.20 on the Comex spot gold close on March 10, 2011 was sold on March 15, 2011 at $1401.50, which was its stop-out point.  Loss: $10.70

2) The position bought at $1,352.30 on the Comex spot gold close on February 3, 2011 was sold on March 15, 2011 at $1397.50, which was its stop-out point.  Profit: $45.20

3) The two positions bought at $1339.60 bought on the Comex spot gold close on February 1, 2011 were sold on March 15, 2011 at $1396.00, which was their stop-out point.  Profit: $112.80

4) Buy one position at the market, presently $1,395.50 as I write, which is the price I will use for record keeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1382.00. (updated 15 March 2011)

Silver
1) The position bought at $34.35 on March 11, 2011 was sold on March 15, 2011 at $34.05, which was its stop-out point.  Loss: 30.0¢

2) The position bought at $28.45 on February 3, 2011 was sold on March 15, 2011 at $33.975, which was its stop-out point.  Profit: $5.525

3) Long from $35.933 bought on the Comex spot gold close on March 11, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $33.50. (updated 15 March 2011)

4) Buy one position at the market, presently $34.135 as I write, which is the price I will use for record keeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $33.85. (updated 15 March 2011)

Trading Comments, 11 March 2011 (posted 011h00 CET):

The frothiness in the precious metals market that I wrote about last time has largely dissipated.  My best guess is that we have a few more days of ‘backing & filling’ to test and further build support.  I expect that by the end of next week, both gold and silver will be probing overhead resistance at their recent highs.

We were stopped out of some of our trading positions with good profits.  It is now time to re-load and to tighten up the stops on the remaining positions, just in case I am wrong and this correction digs deeper.

Gold
1) The position bought at $1372.25 on the London AM fix on February 15, 2011 was sold on March 10, 2011 at $1,404.00, which was its stop-out point.  Profit: $31.75

2) 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 $1396.00. (updated 11 March 2011)

3) 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 $1397.50. (updated 11 March 2011)

4) Long from $1412.20 bought on the Comex spot gold close on March 10, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1401.50. If stopped out, then re-buy this position on the first Comex spot price close above $1412.00. (updated 11 March 2011)

Silver
1) The position bought at $33.804 bought on the February 28th Comex spot silver close was sold on March 7, 2011 at $35.86, which was its stop-out point.  Profit: $2.056

2) The position bought at $28.91 bought on the February 4th London silver fix was sold on March 10, 2011 at $35.02, which was its stop-out point.  Profit: $6.110

3) 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 $33.975. (updated 11 March 2011)

4) Buy one position on the March 11th London silver fix or at $34.35, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 30¢ below your purchase price. (updated 11 March 2011)

5) Buy one position on the first Comex silver spot close above $35.50.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 11 March 2011)

Trading Comments, 7 March 2011 (posted 09h45 CET):

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)

Trading Comments, 25 February 2011 (posted 11h00 CET):

Unless you were watching the markets yesterday during business hours in Hawaii, you missed all the action.  Given that the Pacific islands are not the center of global precious metals trading, one can only conclude that last night’s smack down was blatant “painting of the tape” during the most illiquid time of the trading day. 

Someone was gunning for stops, and triggered one of our silver stops, which we closed with a nice profit.  Our gold position remains unchanged, but I recommend tightening those stops to protect our profits there.  Importantly, there was no technical damage on the daily price charts.

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 $1372.00.  (updated 25 February 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 $1378.00. If stopped out, then re-buy this position on the first Comex spot price close above $1380.00. (updated 25 February 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 $1387.20. If stopped out, then re-buy this position on the first Comex spot price close above $1392.00. (updated 25 February 2011)

Silver
1) The position bought at $29.064 on the February 4, 2011 Comex spot silver close was sold on February 24, 2011 at $31.90, which was its stop-out point.  Profit: $2.836

2) 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 $31.45.  (updated 19 February 2011)

3) Long from $28.91 on the February 4th London silver fix.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.58.  If stopped out, then re-buy if the Comex spot price the same day trades above $31.88.  (updated 25 February 2011)

4) Buy one position on the first London fix or Comex spot gold close above $33.50.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 38¢ below your purchase price. (updated 25 February 2011)

Comex options (options are high-risk and therefore not for everyone):
The two Mar’11 Comex 26.00 silver calls bought at $2.267 on November 15, 2010 were sold on February 22, 2011 at $6.864.  Profit: $9.194

Long two May’11 Comex 40.00 silver calls from 36.2¢, the February 22, 2010 Comex close.

Long one Dec’11 Comex 1500 gold call from $50.80, the February 1, 2011 Comex close. 

Hold these calls without any stop-out point. (updated 19 February 2011)

Trading Comments, 19 February 2011 (posted 17h45 CET):

As I suspected when I wrote my last Trading Comments a week ago, silver was ready to explode.  And indeed it did, climbing 7.7% on the week.  Gold had a great week too, climbing 2.1%, but silver’s relative outperformance resulted in a -5.2 drop in the gold/silver ratio to 43.0. 

Continue to watch the gold/silver ratio for important clues as to what lies ahead, and specifically, whether the “ratio knifes through the low 40s”.  It has made a good start toward that goal, and there is no reason to suspect that it will not continue to progress further.  With the backwardation in spot-to-Dec’15 silver blowing out further to an astounding and unprecedented 73¢, it is clear the short squeeze in silver I have been talking about continues to unfold.  Nevertheless, when it comes to markets – as I always say – anything can happen.  So it is time to tighten up our trailing stops.

Lastly, we need to roll our March’11 silver calls.  We began this trade nearly 1-year ago on February 26, 2010 with Dec’10 $18 silver calls.  We added a second position on July 29th.  We then rolled out of the Dec calls on November 15th with $13.749 of profit, and now hold two Mar’11 $26 calls. 

I want to roll again, but do not think we should pay a lot of premium.  I therefore recommend rolling into the May expiry and at a high out of the money strike.  By rolling I am still aiming for my $50 target when we began this trade, but most importantly, as silver’s price has risen, the trade has become more risky.  So I do not want to risk much of the profit on this trade that we have already gained.  More to the point, this recommendation is very speculative and therefore not for everyone.  See below.

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 $1366.00.  (updated 19 February 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 $1374.00. If stopped out, then re-buy this position on the first Comex spot price close above $1380.00. (updated 19 February 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 $1378.00. If stopped out, then re-buy this position on the first Comex spot price close above $1392.00. (updated 19 February 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 $31.45.  (updated 19 February 2011)

2) Long from $28.91 on the February 4th London silver fix.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.58.  (updated 19 February 2011)

3) Long from $29.064 on the February 4th Comex silver close.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.90. If stopped out, then re-buy if the Comex spot price the same day trades above $32.25. (updated 19 February 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 46.5. (updated 19 February 2011)

Comex options (options are high-risk and therefore not for everyone):
Sell the two Mar’11 Comex 26.00 silver calls bought at $2.267 on November 15, 2010 and at the same time buy two May’11 Comex 40.00 silver calls.  I will use the February 22nd (Feb 21st is a US holiday) Comex closing prices for record keeping.

Long one Dec’11 Comex 1500 gold call from $50.80, the February 1, 2011 Comex close.  Hold this call without any stop-out point. (updated 19 February 201

Trading Comments, 12 February 2011 (posted 17h00 CET):

By the end of last week, the precious metals had worked off a mildly overbought status arising from their big gain earlier in the week.  They did so by basically moving sideways.  This particular pattern of trading activity looks familiar.  It reminds me of what silver did when it first bumped up against $20 in early September 2010.  And we all know how silver exploded to the upside after that.  This week could be very interesting. 

I recommend lowering the stop-out point on the gold/silver ratio trade, which was last updated on 16 November 2010.  Also, continue to hold the Comex calls.  I will make a recommendation on the silver calls before they expire.

Gold
1) Long two positions from $1339.60 bought on the Comex spot gold close on February 1, 2011.  Stop-out point: sell one position at an intraday stop-out point if Comex spot gold trades at $1348.00. If stopped out, then re-buy this position if the Comex spot gold price subsequently trades above $1352.00.  Sell one position at an intraday stop-out point if Comex spot gold trades at $1346.00. (updated 12 February 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 $1348.00. If stopped out, then re-buy this position on the first Comex spot price close above $1352.00. (updated 12 February 2011)

3) Buy one position on the first London fix or Comex spot gold close above $1366.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades more than $18 below your purchase price. (updated 12 February 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 $29.36. If stopped out, then re-buy if the Comex spot price the same day trades above $29.52. (updated 12 February 2011)

2) Long from $28.91 on the February 4th London silver fix.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.58. If stopped out, then re-buy if the Comex spot price the same day trades above $29.85. (updated 12 February 2011)

3) Long from $29.064 on the February 4th Comex silver close.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.62. If stopped out, then re-buy if the Comex spot price the same day trades above $29.95. (updated 12 February 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 49.5. (updated 12 February 2011)

Comex options (options are high-risk and therefore not for everyone):
Long two Mar’11 Comex 26.00 silver calls from $2.267, the November 15, 2010 Comex close.

Long one Dec’11 Comex 1500 gold call from $50.80, the February 1, 2011 Comex close.

Hold these calls without any stop-out point. (updated 12 February 2011)

Trading Comments, 5 February 2011 (posted 12h15 CET):

Anyway you look at it, last week was a very positive one for the precious metals.  The big news is the upside breakout above 3.5% in the yield of 10-year T-notes.  With rising commodity prices across the board, people around the world are increasingly recognizing that inflation is getting worse.  Higher T-note and T-bond yields are just more evidence.

Gold
1) Long two positions from $1339.60 bought on the Comex spot gold close on February 1, 2011.  Stop-out point: sell one position at an intraday stop-out point if Comex spot gold trades at $1342.00. If stopped out, then re-buy this position if the Comex spot gold price subsequently trades above $1352.00.  Sell one position at an intraday stop-out point if Comex spot gold trades at $1324.00. (updated 5 February 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 $1328.00. If stopped out, then re-buy this position on the first Comex spot price close above $1342.00. (updated 5 February 2011)

3) Buy one position on the first Comex spot gold close above $1375.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades more than $22 below your purchase price. (updated 5 February 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 $28.68. If stopped out, then re-buy if the Comex spot price the same day trades above $28.92. (updated 5 February 2011)

2) Long from $28.91 on the February 4th London silver fix.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.975. If stopped out, then re-buy if the Comex spot price the same day trades above $29.05. (updated 5 February 2011)

3) Long from $29.064 on the February 4th Comex silver close.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.975. If stopped out, then re-buy if the Comex spot price the same day trades above $29.15. (updated 5 February 2011)

Trading Comments, 4 February 2011 (posted 08h45 CET):

The precious metals are moving relentlessly closer to over-head resistance.  Important upside breakouts will be achieved with closes above $1375 and $28.80.  I expect those breakouts within the next few days.

Gold
1) Long two positions from $1339.60 bought on the Comex spot gold close on February 1, 2011.  Stop-out point: sell one position at an intraday stop-out point if Comex spot gold trades at $1342.00. If stopped out, then re-buy this position on the first Comex spot price close above $1342.00.  Sell one position at an intraday stop-out point if Comex spot gold trades at $1324.00. (updated 4 February 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 $1342.00. If stopped out, then re-buy this position on the first Comex spot price close above $1354.00. (updated 4 February 2011)

3) Buy one position on the first Comex spot gold close above $1375.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades more than $18 below your purchase price. (updated 4 February 2011)

Silver
1) One position bought at $28.524 on the February 1, 2011 Comex spot silver close was sold on February 3, 2011 at $28.18, which was its stop-out point.  Loss: 34.4¢

2) One position bought at $28.524 on the February 1, 2011 Comex spot silver close was sold on February 3, 2011 at $28.06, which was its stop-out point.  Loss: 46.4¢

3) 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 $28.18. If stopped out, then re-buy if the Comex spot price the same day trades at $28.45. (updated 4 February 2011)

4) Buy one position on the February 4th London silver fix or at $28.32, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at more than 20¢ below your purchase price. (updated 4 February 2011)

5) Buy one position on the first Comex silver spot close above $28.80.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 4 February 2011)

Trading Comments, 2 February 2011 (posted 12h00 CET):

The precious metals are fighting their way higher.  Important upside breakouts will be achieved with closes above $1375 and $28.80.  I expect those levels will be exceeded soon.  With commodity prices across the board racing to new record highs, it won’t be long before the precious metals are joining them.

Gold
1) The position bought at $1333.50 on the 31 January London AM fix was sold on February 1, 2011 at $1327.50, which was its stop-out point.  Loss: $6.00

2) Long two positions from $1339.60 bought on the Comex spot gold close on February 1, 2011.  Stop-out point: sell one position at an intraday stop-out point if Comex spot gold trades at $1324.50. If stopped out, then re-buy this position on the first Comex spot price close above $1334.00.  Sell one position at an intraday stop-out point if Comex spot gold trades at $1317.00. (updated 2 February 2011)

3) Buy one position on the first Comex spot gold close above $1342.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades more than $18 below your purchase price. (updated 2 February 2011)

Silver
1) The position bought at $28.174 on the January 31, 2011 Comex spot silver close was sold on February 1, 2011 at $27.925, which was its stop-out point.  Loss: 24.9¢

2) Long two positions from $28.524 bought on the February 1, 2011 Comex spot silver close.  Stop-out point: sell one position at an intraday stop-out point if Comex spot silver trades at $28.18. If stopped out, then re-buy if the Comex spot price the same day trades at $28.45.  Sell one position at an intraday stop-out point if Comex spot silver trades at $28.06. (updated 2 February 2011)

3) Buy one position on the first Comex silver spot close above $28.84.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 2 February 2011)

Comex options (options are high-risk and therefore not for everyone):
Long two Mar’11 Comex 26.00 silver calls from $2.267, the November 15, 2010 Comex close.

Long one Dec’11 Comex 1500 gold call from $50.80, the February 1, 2011 Comex close.

Hold these calls without any stop-out point. (updated 2 February 2011)

Trading Comments, 1 February 2011 (posted 10h30 CET):

Rising commodity prices across the board are a clear indication of how badly national currencies are being managed.  It is only a matter of time therefore before gold starts climbing higher.  Silver has already begun a new uptrend, but now needs gold to confirm.

The two Comex gold calls expired last week.  I recommend that this position be replaced with a new Dec’11 call. 

Continue to hold the two March silver calls, which are in the money.  I am planning to roll forward these silver calls and will make a recommendation before these calls expire.

Gold
1) Long from $1333.50 bought on the 31 January London AM fix.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1327.50. If stopped out, then re-buy this position on the first Comex spot price close above $1334.00. (updated 1 February 2011)

2) Buy one position at $1334.00 or on the 1 February London PM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1317.00. (updated 30 January 2011)

3) Buy one position on the first Comex spot gold close above $1342.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades more than $15 below your purchase price. (updated 1 February 2011)

Silver
1) The position bought at $27.934 on 28 January 2011 was sold on January 31, 2011 at $27.675, which was its stop-out point.  Loss: 25.9¢

2) Long from $28.174 bought on 31 January 2011 Comex spot silver close.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $27.925. If stopped out, then re-buy if the Comex spot price the same day trades at $28.05. (updated 1 February 2011)

3) Buy one position on the first Comex silver spot close above $28.48.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 30 January 2011)

Comex options (options are high-risk and therefore not for everyone):
The two Feb’11 Comex 1360 gold calls bought at $55.70 on the November 15, 2010 Comex close expired out of the money.  These calls were rolled from the two Dec’10 Comex 1200 calls closed with a $229.10 profit.  Thus, the overall profit on this trade was reduced to $117.70.

Long two Mar’11 Comex 26.00 silver calls from $2.267, the November 15, 2010 Comex close.

Buy one Dec’11 Comex 1500 gold call at the market.  I’ll use today’s closing price for record keeping.

Hold these calls without any stop-out point. (updated 1 February 2011)

Trading Comments, 30 January 2011 (posted 16h15 CET):

The bears gave it their best shot last week.  They drove the precious metals lower during option expiration, but the strong recovery on Friday by both gold and silver shows that the low prices engineered for option expiry could not be sustained.  In line with my forecast for 2011, I expect that we just made the low prices for this year.

The correction in both gold and silver this month was deeper than I expected, but the key word is “correction”. The bull market in the precious metals has not ended.  The destruction of national currencies is continuing. 

After watching last week’s gyrations from the sidelines, it is time to again build a trading position in anticipation of higher gold and silver prices.  Importantly, I do not believe that buying now would be “bottom picking” because there is enough evidence to suggest that an important low has been made in both gold and silver.  In other words, buying now is not an attempt to identify a bottom.  Rather, the technical condition of the market is much improved after last week’s action.

Gold
1) The position bought at $1344.00 on 21 January 2011 was sold on January 24, 2011 at $1336.00, which was its stop-out point.  Loss: $8.00

2) Buy one position at $1326.00 or on the 31 January London AM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1307.00. (updated 30 January 2011)

3) Buy one position on the first Comex spot gold close above $1342.00.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 30 January 2011)

Silver
1) The position bought at $27.28 on 21 January 2011 was sold on January 24, 2011 at $27.375, which was its stop-out point.  Profit: 9.5¢

2) Long from $27.934 bought on 28 January 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $27.675. If stopped out, then re-buy if the Comex spot price the same day closes above $27.74. (updated 30 January 2011)

3) Buy one position on the first Comex silver spot close above $28.48.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 30 January 2011)

Trading Comments, 22 January 2011 (posted 15h15 CET):

The evidence suggests to me that the precious metals are in the process of forming a “major bottom”, as I noted yesterday.  But all bottom-picking should be treated with caution.  Therefore, keep tight stops on your existing positions, but be prepared to buy on strength – if we get it.

Lastly, the 0.5% drop in Comex silver Open Interest on Thursday pales in comparison to that day’s 4.6% decline in the silver price.  The bear raid by the new silver shorts therefore did not dislodge enough longs, meaning these silver shorts have not covered their position.  They are now vulnerable, so we are seeing the making of a possible short squeeze.  Any strength this week in silver would I expect cause the shorts to run for cover, sending silver spiraling higher.

Gold
1) Long from $1344.00 bought on 21 January 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1336.00. If stopped out, then re-buy this position on the first subsequent London PM fix or Comex spot price close above $1344.00, whichever comes first. (updated 22 January 2011)

2) Buy one position on the first Comex spot gold close above $1352.00.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades more than $12 below your purchase price. (updated 22 January 2011)

Silver
1) Long from $27.28 bought on 21 January 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $27.375. If stopped out, then re-buy if the Comex spot price the same day closes above $27.42. (updated 22 January 2011)

2) Buy one position on the first Comex silver spot close above $27.46.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 24.0¢ below your purchase price. (updated 22 January 2011)

Trading Comments, 21 January 2011 (posted 12h00 CET):

My initial attempt at bottom picking – which is always a risky thing to do – was unsuccessful.  Nevertheless, traders should be buying this dip.  It has the look-and-feel of a major bottom.  Here is some importance evidence that supports my subjective judgement.

Silver is in backwardation, and not just for a few months.  As reported by the LBMA, the SIFO rate shows that silver is in backwardation for 12 months forward, an unprecedented development.  This disconnect between the paper-silver and physical silver markets is huge. The silver shorts simply cannot hold the paper-silver market down here any longer without seriously discrediting the paper-silver market as a price discovery mechanism.

Watch for today’s Comex open interest report.  If there was not a big drop in silver O.I. yesterday, then silver is ready to rocket higher.

Gold
1) The position bought at $1364.00 on the 20 January was sold on January 20, 2011 at $1357.00, which was its stop-out point.  Loss: $7.00

2) Buy one position at the market, presently $1,344 as I write, which is the price I will use for record keeping.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1336.00. (updated 21 January 2011)

3) Buy one position on the first Comex spot gold close above $1352.00.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 21 January 2011)

Silver
1) The position bought at $28.42 on January 20, 2011 was sold on January 20, 2011 at $28.18, which was its stop-out point.  Loss: 24.0¢

2) Buy one position at the market, presently $27.28 as I write, which is the price I will use for record keeping.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $26.94. (updated 21 January 2011)

3) Buy one position on the first Comex silver spot close above $27.46.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 21 January 2011)

Trading Comments, 20 January 2011 (posted 11h00 CET):

The precious metals are again testing support.  Use this opportunity to re-load.

Gold
1) The position bought at $1368.75 on the 18 January London PM fix was sold on January 20, 2011 at $1362.50, which was its stop-out point.  Loss: $6.25

2) Buy one position at $1364.00 or on the 20 January London PM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1357.00. (updated 20 January 2011)

3) Buy one position on the first Comex spot gold close above $1372.00.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 20 January 2011)

Silver
1) The position bought at $28.901 on the Comex spot silver close on January 18, 2011 was sold on January 19, 2011 at $28.92, which was its stop-out point.  Profit: 1.9¢

2) The position bought at $28.79 bought on the 18 January London silver fix was sold on January 19, 2011 at $29.025, which was its stop-out point.  Profit: 23.5¢

3) Buy one position on the 20 January London silver fix or at $28.42, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.18. (updated 20 January 2011)

4) Buy one position on the first Comex silver spot close above $28.68.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 20 January 2011)

Trading Comments, 19 January 2011 (posted 10h15 CET):

Yesterday’s trading action was very positive.  The strong bounces off of $1360 and $28 indicate that support at those levels is solid. 

The major factor driving prices higher is the demand for physical metal, which remains strong.  In the end, it is always the demand for physical metal that determines the price of gold and silver. 

While there may be more base-building, I expect it won’t be long before gold and silver are testing over-head resistance at $1400 and $30.

Gold
1) Long from $1368.75 bought on the 18 January London PM fix.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1362.50. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1364.00. (updated 19 January 2011)

2) Buy one position on the first Comex spot gold close above $1372.00.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 18 January 2011)

Silver
1) Long from $28.79 bought on the 18 January London silver fix.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.92. If stopped out, then re-buy if the Comex spot price the same day closes above $29.04. (updated 19 January 2011)

2) Long from $28.901 bought on the 18 January Comex silver spot close.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.025. If stopped out, then re-buy if the Comex spot price the same day closes above $29.04. (updated 19 January 2011)

Trading Comments, 18 January 2011 (posted 10h45 CET):

Yesterday’s test of important support at $1360 and $28 was successful, judging from the strength in both gold and silver this morning.  Good for you if you bought yesterday because it is time to again start building a trading position.

Gold
1) Buy one position at $1364.00 or on the 18 January London PM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1357.00. (updated 18 January 2011)

2) Buy one position on the first Comex spot gold close above $1372.00.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 18 January 2011)

Silver
1) Buy one position on the 18 January London silver fix or at $28.50, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.18.  (updated 18 January 2011)

2) Buy one position on the first Comex silver spot close above $28.70.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 18 January 2011)

Trading Comments, 15 January 2011 (posted 19h45 CET):

Last week gold fell -0.6%, while silver dropped -1.2%.  Bullish sentiment for the precious metals is scraping the bottom, along with many people’s emotions.  They feel like they have just been kicked in the gut by these price declines.  But the drop in the precious metals is relatively small compared to what happened to the US dollar last week.  The US Dollar Index was hit even harder than gold and silver, falling -2.3%, while the dollar itself fell -3.6% against the euro.  Yet why are so few people worked up about that? 

It is because the dollar has been declining for decades, so a weekly collapse is not out of the ordinary.  People are used to it.  The dollar is in a long-running bear market, but gold and silver are still in relatively young bull markets.  So every decline in precious metals is met with worry, which leads to the point I am making.  Watch changes in sentiment.  It is a useful tool that helps you keep your eye on the big picture – which is that gold and silver are still in bull markets.  In short, drops in sentiment don’t detract from underlying fundamentals, which remain bullish for both gold and silver.

Now I can turn to the short-term.  Why didn’t I recommend buying gold and silver on the Friday Comex close?  I thought we could buy on Monday at a better price, but after watching the various markets after the Comex close, now I am not so sure.  We’ll see how the metals open in Europe on Monday.

Gold
1) The position bought at $1384.00 on the Comex spot gold close on January 11, 2011 was sold after the Comex close on January 13, 2011 at $1378.00, which was its stop-out point.  Loss: $6.00

2) The position bought at $1368.00 bought on January 10, 2011 was sold on January 13, 2011 at $1378.00, which was its stop-out point.  Profit: $10.00

3) The position bought at $1368.50 on the Comex spot gold close on January 7, 2011 was sold on January 13, 2011 at $1372.00, which was its stop-out point.  Profit: $3.50

Silver
1) The position bought at $29.49 on the Comex spot silver close on January 11, 2011 was sold on January 13, 2011 at $29.58, which was its stop-out point.  Profit: 9.0¢

2) The position bought at $28.80 on January 10, 2011 was sold on January 13, 2011 at $29.275, which was its stop-out point.  Profit: 47.5¢

Trading Comments, 12 January 2011 (posted 09h30 CET):

It looks like that the “black-box” trend followers are about to be whip-sawed again.  They should step back and look at the big picture instead of staying overly wedded to their proprietary, mathematically-based trading models. 

The gold cartel and silver shorts are about to ‘pick the pockets’ of the trend followers again, if gold and silver reverse back above their short-term moving averages as I expect them to do within the next few days.  That move would cause the trend followers to reverse their positions, i.e., go from short to long.  They will be covering at a loss the shorts established on last week’s slam-down. 

This whipsawing of the trend followers is not new.  It has been going on for years.  I first wrote in July 2004 how the gold cartel picks the pocket of the trend followers, and then did a follow-up article in July 2005 explaining the same thing.  So as far as the precious metals are concerned, there is no formula or magic key to open the lock to successful trading.

Gold
1) Long from $1368.50 bought on the Comex spot gold close on January 7, 2011. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1372.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1372.00. (updated 12 January 2011)
 
2) Long from $1368.00 bought on January 10, 2011. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1378.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1382.00. (updated 12 January 2011)

3) Long from $1384.00 bought on the Comex spot gold close on January 11, 2011. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1378.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1384.00. (updated 12 January 2011)

Silver
1) Long from $28.80 bought on January 10, 2011.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.275. If stopped out, then re-buy if the Comex spot price the same day closes above $29.34. (updated 12 January 2011)

2) Long from $29.49 bought on the Comex spot silver close on January 11, 2011. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.58. If stopped out, then re-buy this position if the Comex spot price the same day closes above $29.84. (updated 12 January 2011)

Trading Comments, 10 January 2011 (posted 09h15 CET):

Silver closed in New York below $29, which did indeed turn the silver chart bearish, as I suggested it would in my Jan 4th commentary.  So the silver shorts got first prize on last week’s slam-down.  They successfully “painted the tape”, but that doesn’t mean silver itself has become bearish.

All the silver shorts accomplished was to turn a lot of traders negative.  In particular, the ‘black-box’ short-term trend followers reversed from long to short, enabling some silver shorts to cover, which is a point I made in an interview on King World News on Friday morning.  In the past, these ‘black-box’ traders have been cannon fodder for the gold cartel, which has repeatedly managed to whipsaw these trend followers – and did so again last week.

But this time, Comex open interest on silver was rising on Wednesday and Thursday, so there was no net liquidation on those days.  It means that there were new buyers who came in to replace the silver longs who were shaken out.  Consequently, there is real pressure now on the remaining silver shorts, particularly if Friday’s open interest rose too.

In the past, after slam-downs like the one we had last week, the Friday close marked the low of the correction.  I think history is about to repeat. 

Gold
1) The position bought at $1372.50 on January 6, 2011 was sold on January 7, 2011 at $1357.00, which was its stop-out point.  Loss: $15.50

2) Long from $1368.50 bought on the Comex spot gold close on January 7, 2011. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1362.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1362.00. (updated 10 January 2011)

3) Buy one position at $1368.00 or on the 10 January London AM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1357.00. (updated 10 January 2011)

4) Buy one position on the first Comex spot gold close above $1380.00.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 10 January 2011)

Silver
1) The position bought at $29.18 on January 6, 2011 was sold on January 6, 2011 at $29.03, which was its stop-out point.  Loss: 15.0¢

2) Buy one position on the 10 January London silver fix or at $28.80, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.58.  (updated 10 January 2011)

3) Buy one position on the first Comex silver spot close above $29.10.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 10 January 2011)

Trading Comments, 6 January 2011 (posted 11h15 CET):

Every once in a while, a bull market gives you a great opportunity to buy.  The problem is that these opportunities only become obvious weeks or months after they occur. 

In my January 4th Trading Comments I noted that: “Gold and silver are presently testing support.  More testing is possible, but the long-term picture remains very bullish.  It would take a close in silver below $29.00 to turn the silver chart bearish.”  So months from now when we look back at today, will it be obvious that this present dip in gold and silver prices is a great buying opportunity?  Yes, I think so.  This low would also be consistent with my forecast for 2011 that gold’s “low for the year will be made in January, probably in the first week.”  Time will tell, but I recommend that we begin building a trading position in anticipation of much higher precious metal prices.

Gold
1) The position bought at $1405.20 on the Comex spot gold close on December 28, 2010 was sold on January 4, 2011 at $1397.50, which was its stop-out point.  Loss: $7.70

2) The position bought on at $1401.50 bought on December 29, 2010 was sold on January 4, 2011 at $1402.00, which was its stop-out point.  Profit: $0.50

3) The position bought on at $1413.00 bought on the Comex spot gold close on December 29, 2010 was sold on January 4, 2011 at $1406.00, which was its stop-out point.  Loss: $7.10

4) Buy one position at $1372.50 or on the London PM fix on January 6, 2011, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1357.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1364.00. (updated 6 January 2011)

5) Buy one position on the first Comex spot gold close above $1382.00.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 6 January 2011)

Silver
1) One position bought at $30.297 on the Comex silver spot close on December 28, 2010 was sold on January 4, 2011 at $30.420, which was its stop-out point.  Profit: 12.3¢

2) One position bought at $30.297 on the Comex silver spot close on December 28, 2010 was sold on January 4, 2011 at $30.325, which was its stop-out point.  Profit: 2.8¢

3) One position bought at $30.679 on the Comex silver spot close on December 29, 2010 was sold on January 4, 2011 at $30.520, which was its stop-out point.  Loss: 15.9¢

4) One position bought at $30.679 on the Comex silver spot close on December 29, 2010 was sold on January 4, 2011 at $30.475, which was its stop-out point.  Loss: 20.4¢

5) Buy one position on the first Comex silver spot close above $29.42 or at $29.18, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades 15¢ below your purchase price. (updated 6 January 2011)

6) Buy one position on the first Comex silver spot close above $29.60.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 6 January 2011)

Trading Comments, 4 January 2011 (posted 10h15 CET):

After returning from a 3-day weekend, London sold the precious metals on the open this morning.  Gold and silver are presently testing support.  More testing is possible, but the long-term picture remains very bullish.  It would take a close in silver below $29.00 to turn the silver chart bearish.

Gold
1) Long from $1405.20 bought on the Comex spot gold close on December 28, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1397.50. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1397.50. (updated 4 January 2011)

2) Long from $1401.50 bought on December 29, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1402.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1402.00. (updated 4 January 2011)

3) Long from $1413.10 bought on the Comex spot gold close on December 29, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1406.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1414.00. (updated 4 January 2011)

4) Buy one position on the Comex spot gold close above $1422.00.  Stop-out point: I’ll set a stop-out price after this position is filled. (updated 4 January 2011)

Silver
1) Long two positions from $30.297 bought on the Comex silver spot close on December 28, 2010.  Stop-out point: sell one position at an intraday stop-out point if Comex spot silver trades at $30.420. If stopped out, then re-buy if the Comex spot price the same day closes above $30.420.  Sell the other position at an intraday stop-out point if Comex spot silver trades at $30.325. (updated 4 January 2011)

2) Long two positions from $30.679 bought on the Comex spot silver close on December 29, 2010.  Stop-out point: sell one position at an intraday stop-out point if Comex spot silver trades at $30.520. If stopped out, then re-buy if the Comex spot price the same day closes above $30.520.  Sell the other position at an intraday stop-out point if Comex spot silver trades at $30.475. (updated 4 January 2011)

Trading Comments, 29 December 2010 (posted 10h00 CET):

Year-end is the most important time of the year for optics, otherwise known as “window-dressing”.  The shorts need to keep precious metal prices down at year-end to make their positions look good, which really means making their balance sheets look ‘less bad’, given that their positions in all likelihood are already deep underwater.  So rising gold and silver prices this week are a good indication that the shorts are in big trouble.

Gold
1) Long from $1405.20 bought on the Comex spot gold close on December 28, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1394.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1394.00. (updated 29 December 2010)

2) Buy one position at $1401.50 or on the London PM fix on December 29, 2010, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1387.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1394.00. (updated 29 December 2010)

3) Buy one position on the first Comex spot gold close above $1,410.00.  I’ll set a stop-out price after this position is filled. (updated 29 December 2010)

4) Buy one position on the first Comex spot gold close above $1,422.00.  I’ll set a stop-out price after this position is filled. (updated 29 December 2010)

Silver
1) Long two positions from $30.297 bought on the Comex silver spot close on December 28, 2010.  Stop-out point: sell one position at an intraday stop-out point if Comex spot silver trades at $30.12. If stopped out, then re-buy if the Comex spot price the same day closes above $30.22.  Sell the other position at an intraday stop-out point if Comex spot silver trades at $29.975. (updated 29 December 2010)

2) Buy one position on the first Comex silver spot close above $30.42 or at $30.18, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades 15¢ below your purchase price.  (updated 29 December 2010)

3) Buy one position on the first Comex silver spot close above $30.64.  I’ll set a stop-out price after this position is filled. (updated 29 December 2010)

Trading Comments, 27 December 2010 (posted 15h15 CET):

With London closed for two days and the Northeast US paralyzed by a winter blizzard, I expect the precious metals to be quiet, barring any unexpected new events.

Gold
1) The position bought at $1388.20 bought on the Comex spot gold close on December 21, 2010 was sold on December 23, 2010 at $1380.50, which was its stop-out point.  Loss: $7.70

2) The position bought on at $1374.75 bought on the London AM fix on December 17, 2010 was sold on December 23, 2010 at $1376.00, which was its stop-out point.  Profit: $1.25

3) The position bought on at $1386.00 bought on December 22, 2010 was sold on December 23, 2010 at $1382.00, which was its stop-out point.  Loss: $4.00

4) Buy one position at $1374.00 or on the first Comex spot gold close above $1,394.00, whichever comes first.  I’ll set a stop-out price after this position is filled. (updated 27 December 2010)

Silver
1) The position bought at $29.02 on December 21, 2010 was sold on December 23, 2010 at $29.175, which was its stop-out point.  Profit: 15.5¢

2) The position bought at $29.28 on December 22, 2010 was sold on December 23, 2010 at $29.130, which was its stop-out point.  Loss: 15.0¢

3) Buy one position on the first Comex silver spot close above $29.42 or at $28.90, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades 15¢ below your purchase price.  (updated 27 December 2010)

4) Buy one position on the first Comex silver spot close above $29.54.  I’ll set a stop-out price after this position is filled. (updated 27 December 2010)

Trading Comments, 22 December 2010 (posted 09h30 CET):

There was another uneventful short-lived dip in gold and silver yesterday, but their prices did not drop as much as the day before.  It is one sign that the downside potential is diminishing.  Another sign is the higher closes being recorded, which is particularly bullish given that so few people are paying attention (bullish sentiment continues to drop).  The locals in the Comex pit may try taking the metals lower once more, but it is more likely that they will sit on their hands until next week.

Gold
1) The position bought on the Comex spot gold close at $1385.50 on December 20, 2010 was sold on December 21, 2010 at $1382.00, which was its stop-out point.  Loss: $3.50

2) The position bought at $1386.00 on December 21, 2010 was sold on December 21, 2010 at $1382.00, which was its stop-out point.  Loss: $4.00

3) Long from $1374.75 bought on the London AM fix on December 17, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1376.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1384.00. (updated 22 December 2010)

4) Long from $1388.20 bought on the Comex spot gold close on December 21, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1380.50. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1387.50. (updated 22 December 2010)

5) Buy one position at $1386.00 or on the first Comex spot gold close above $1,394.00, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1382.00. (updated 22 December 2010)

Silver
1) The position bought at $29.335 on the Comex spot silver close on December 20, 2010 was sold on December 21, 2010 at $29.175, which was its stop-out point.  Loss: 16.0¢

2) Long from $29.02 bought on December 21, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.175. If stopped out, then re-buy if the Comex spot price the same day closes above $29.34. (updated 22 December 2010)

3) Buy one position on the first Comex silver spot close above $29.42 or at $29.28, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades 15¢ below your purchase price.  (updated 22 December 2010)

4) Buy one position on the first Comex silver spot close above $29.54.  I’ll set a stop-out price after this position is filled. (updated 22 December 2010)

Trading Comments, 21 December 2010 (posted 13h00 CET):

Yesterday’s short-lived dip in prices in New York was caused by locals in the Comex gold and silver pits gunning for and clearing out stops.  They succeeded, and prices reversed quickly when the locals ran into a wall of buying.  There may be more raids in the thin trading around the year-end holidays.  Don’t let these raids cause you to take your eye off the big picture, which remains bullish.

Gold
1) Long from $1374.75 bought on the London AM fix on December 17, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1374.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1378.00. (updated 21 December 2010)

2) Long from $1385.50 bought on the Comex spot gold on December 20, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1382.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1387.50. (updated 21 December 2010)

3) Buy one position at $1386.00 or on the 21 Dec London PM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1382.00. (updated 21 December 2010)

Silver
1) The position bought at $29.21 on the London silver fix on December 20, 2010 was sold on December 20, 2010 at $28.875, which was its stop-out point.  Loss: 33.5¢

2) Long from $29.335 bought on the Comex spot silver close on December 20, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.175. If stopped out, then re-buy if the Comex spot price the same day closes above $29.30. (updated 21 December 2010)

3) Buy one position on the on the first Comex silver spot close above $29.42 or at $29.02, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades 25¢ below your purchase price.  (updated 21 December 2010)

Trading Comments, 18 December 2010 (posted 12h45 CET):

Both precious metals are in a good technical position to rally into the year-end, but the rally needs to begin now.  Otherwise, focus may begin shifting away from the markets and to the holidays - resulting in a quiet close to what has been an otherwise exciting year for the precious metals.

Gold
1) Long from $1374.75 bought on the London AM fix on December 17, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1367.50. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1372.00. (updated 18 December 2010)

2) Buy one position on the first Comex spot gold close above $1378.00.  I’ll set a stop-out price after this position is filled. (updated 18 December 2010)

3) Buy one position on the first Comex spot gold close above $1387.50.  I’ll set a stop-out price after this position is filled. (updated 18 December 2010)

Silver
1) The position bought at $28.78 on the London silver fix on December 17, 2010 was sold on December 17, 2010 at $28.72, which was its stop-out point.  Loss: 6.0¢

2) Buy one position on the 20 Dec London silver fix or at $29.02, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.875.  (updated 18 December 2010)

3) Buy one position on the first Comex silver spot close above $29.28.  I’ll set a stop-out price after this position is filled. (updated 18 December 2010)

Trading Comments, 17 December 2010 (posted 09h15 CET):

The precious metals against tested support, and this time dug deeper into it than I was expecting.  Re-testing of support is not a reason to turn bearish.  It is just an indication that gold and silver are still consolidating last month’s big gains.  More re-testing of support is possible before the precious metals resume their uptrends.  The objective is to have established a reasonably sized trading position and have it in place before those uptrends resume.  I still expect the precious metals to rally into the end of the year.

Gold
1) The position bought on the Comex spot gold close at $1403.60 on December 14, 2010 was sold on December 16, 2010 at $1376.00, which was its stop-out point.  Loss: $27.60

2) The position bought at $1380.00 December 16, 2010 was sold on December 16, 2010 at $1372.00, which was its stop-out point.  Loss: $8.00

3) Buy one position at $1372.00 or on the 17 Dec London AM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1364.50. (updated 17 December 2010)

4) Buy one position on the first Comex spot gold close above $1386.00.  I’ll set a stop-out price after this position is filled. (updated 17 December 2010)

5) Buy one position on the first Comex spot gold close above $1396.00.  I’ll set a stop-out price after this position is filled. (updated 17 December 2010)

Silver
1) The position bought at $29.759 on the Comex silver spot close on December 14, 2010 was sold on December 16, 2010 at $28.975, which was its stop-out point.  Loss: 78.4¢

2) The position bought at $29.08 on December 16, 2010 was sold on December 16, 2010 at $28.92, which was its stop-out point.  Loss: 16.0¢

3) Buy one position on the 17 Dec London silver fix or at $28.88, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.72.  (updated 16 December 2010)

4) Buy one position on the first Comex silver spot close above $29.20.  I’ll set a stop-out price after this position is filled. (updated 17 December 2010)

5) Buy one position on the first Comex silver spot close above $29.38.  I’ll set a stop-out price after this position is filled. (updated 17 December 2010)

Trading Comments, 16 December 2010 (posted 09h45 CET):

Both gold and silver re-tested support.  This ‘backing & filling’ is positive.  I continue to expect that both precious metals will move higher toward the end of the year.

Gold
1) The position bought on the Comex spot gold close at $1397.30 on December 13, 2010 was sold on December 14, 2010 at $1398.00, which was its stop-out point.  Profit: $0.70

2) The position bought on the London AM fix at $1388.25 on December 13, 2010 was sold on December 15, 2010 at $1388.00, which was its stop-out point.  Loss: $0.25

3) Long from $1403.60 bought on the Comex spot gold close on December 14, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1376.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1382.00. (updated 16 December 2010)

4) Buy one position at $1380.00 or on the 16 Dec London PM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1372.00. (updated 16 December 2010)

5) Buy one position on the first Comex spot gold close above $1388.00.  I’ll set a stop-out price after this position is filled. (updated 16 December 2010)

Silver
1) The position bought at $29.599 on the Comex silver spot close on December 13, 2010 was sold on December 14, 2010 at $29.68, which was its stop-out point.  Profit: 8.1¢

2) The position bought at $28.580 on December 13, 2010 was sold on December 14, 2010 at $29.275, which was its stop-out point.  Profit: 69.5¢

3) Long from $29.759 bought on the Comex spot silver close on December 14, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.975. If stopped out, then re-buy if the Comex spot price the same day closes above $29.30. (updated 16 December 2010)

 4) Buy one position on the 16 Dec London silver fix or at $29.08, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.92.  (updated 16 December 2010)

5) Buy one position on the first Comex silver spot close above $29.80.  I’ll set a stop-out price after this position is filled. (updated 16 December 2010)

Trading Comments, 14 December 2010 (posted 08h45 CET):

Short-term pullbacks for a day or two are always possible, so keep your stops in place.  But it looks to me that the precious metals are going to keep climbing.  Let’s watch for another day or two to see if there is a good opportunity to add more trading positions.

Gold
1) Long from $1388.25 bought on the London AM fix on December 13, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1388.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1402.00. (updated 14 December 2010)

2) Long from $1397.30 bought on the Comex spot gold close on December 13, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1398.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1402.00. (updated 14 December 2010)

Silver
1) Long from $28.580 bought on December 13, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.275. If stopped out, then re-buy if the Comex spot price the same day closes above $29.30. (updated 14 December 2010)

2) Long from $29.599 bought on the Comex silver spot close on December 13, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $29.68. If stopped out, then re-buy if the Comex spot price the same day closes above $29.70. (updated 14 December 2010)

Trading Comments, 12 December 2010 (posted 12h30 CET):

There is enough evidence to suggest that the bottom of this correction is probably now in place.  Support in the low $1370s has been sufficiently tested and looks solid.  Therefore, it is time to start re-building our trading positions.

A Note from James Turk: I periodically remind viewers to read this site’s Disclaimer.  The information provided below is for educational purposes only.  While every effort is made to post regular and up-to-date information, there is no guarantee that I will do so because other commitments, such as travel, may take precedence.

Gold
1) The position bought on the London PM fix at $1385.50 on December 1, 2010 was sold on December 7, 2010 at $1398.00, which was its stop-out point.  Profit: $12.50

2) The position bought on the London PM fix at $1383.50 on November 30, 2010 was sold on December 7, 2010 at $1398.00, which was its stop-out point.  Profit: $14.50

3) One position bought on the Comex spot gold close at $1352.20 on November 19, 2010 was sold on December 8, 2010 at $1384.50, which was its stop-out point.  Profit: $32.30

4) One position bought on the Comex spot gold close at $1352.20 on November 19, 2010 was sold on December 8, 2010 at $1378.00, which was its stop-out point.  Profit: $25.80

5) Buy one position at $1380.00 or on the 13 Dec London AM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1366.00. (updated 12 December 2010)

6) Buy one position on the first Comex spot gold close above $1388.00.  I’ll set a stop-out price after this position is filled. (updated 12 December 2010)

Silver
1) The position bought at $28.74 on the London silver fix on December 1, 2010 was sold on December 7, 2010 at $28.94, which was its stop-out point.  Profit: 20.0¢

2) The position bought at $28.185 on the Comex silver spot close on November 30, 2010 was sold on December 8, 2010 at $28.46, which was its stop-out point.  Profit: 27.5¢

3) Buy one position on the 13 Dec London silver fix or at $28.58, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $27.92.  (updated 13 December 2010)

4) Buy one position on the first Comex silver spot close above $28.80.  I’ll set a stop-out price after this position is filled. (updated 13 December 2010)

Trading Comments, 4 December 2010 (posted 21h30 CET):

The strong close in New York on Friday bodes well for this coming week.  New highs in silver followed within a day or two by new highs gold are likely, as I explained recently in an interview on King World News.  My targets for year-end remain at $1500 and $30+ for gold and silver respectively.

Gold
1) Long two positions from $1352.20 bought on the Comex spot gold close on November 19, 2010. Stop-out point: sell one position at an intraday stop-out point if Comex spot gold trades at $1384.50. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1392.00.  Sell the other position at an intraday stop-out point if Comex spot gold trades at $1378.00. (updated 4 December 2010)

2) Long from $1383.50 bought on the London PM fix on November 30, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1398.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1402.00. (updated 4 December 2010)

3) Long from $1385.50 bought on the London PM fix on December 1, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1398.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1412.00. (updated 4 December 2010)

Silver
1) Long from $28.185 bought on the Comex silver spot close on November 30, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.46. If stopped out, then re-buy if the Comex spot price the same day closes above $28.70. (updated 4 December 2010)

2) Long from $28.74 bought on the London silver fix on December 1, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.94. If stopped out, then re-buy if the Comex spot price the same day closes above $29.20. (updated 4 December 2010)

3) CANCEL - Buy one position on the first Comex silver spot close above $29.34.  (cancelled 4 December 2010) – This price wasn’t quite reached by the Comex close, but was surpassed in the after-market.  I expect a much higher close on Monday, so cancel this trade for now.  We’ll look to add other positions after the initial thrust upward I am expecting for next week settles down.

Trading Comments, 3 December 2010 (posted 11h45 CET):

There is often volatility around the release of the US unemployment number, which is due out in less then three hours.  Whatever number is reported, it won’t impact the long-term uptrend in the precious metals.

Gold
1) Long two positions from $1352.20 bought on the Comex spot gold close on November 19, 2010. Stop-out point: sell one position at an intraday stop-out point if Comex spot gold trades at $1377.50. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1382.00.  Sell the other position at an intraday stop-out point if Comex spot gold trades at $1368.00. (updated 3 December 2010)

2) Long from $1383.50 bought on the London PM fix on November 30, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1382.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1388.00. (updated 3 December 2010)

3) Long from $1385.50 bought on the London PM fix on December 1, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1387.20. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1402.00. (updated 3 December 2010)

Silver
1) Long from $28.185 bought on the Comex silver spot close on November 30, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $27.96. If stopped out, then re-buy if the Comex spot price the same day closes above $28.20. (updated 3 December 2010)

2) Long from $28.74 bought on the London silver fix on December 1, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $28.52. If stopped out, then re-buy if the Comex spot price the same day closes above $28.80. (updated 3 December 2010)

3) Buy one position if Comex spot silver trades at $28.20.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $27.92.  (updated 3 December 2010)

4) Buy one position on the first Comex silver spot close above $29.34.  I’ll set a stop-out price after this position is filled. (updated 1 December 2010)

Trading Comments, 1 December 2010 (posted 10h00 CET):

The upside fireworks began one day earlier than expected, but gold and silver have nevertheless begun the next up-leg in their bull market. 

I expect that the fireworks display is just beginning, but let’s watch carefully the power of the move over the next several days.  It will give us an early indication of the strength that we can anticipate from the metals in this next leg, which I expect will put gold and silver before year-end over $1500 and $30.

Gold
1) Long two positions from $1352.20 bought on the Comex spot gold close on November 19, 2010. Stop-out point: sell one position at an intraday stop-out point if Comex spot gold trades at $1367.50. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1372.00.  Sell the other position at an intraday stop-out point if Comex spot gold trades at $1347.50. (updated 1 December 2010)

2) Long from $1383.50 bought on the London PM fix on November 30, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1377.50. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1382.00. (updated 1 December 2010)

3) Buy one position at $1382.00 or on the 1 Dec London PM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1374.00. (updated 1 December 2010)

Silver
1) The position bought at $27.13 on the London silver fix on November 30, 2010 was sold on November 30, 2010 at $27.02, which was its stop-out point.  Loss: 11.0¢

2) Long from $28.185 bought on the Comex silver spot close on November 30, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $27.92. If stopped out, then re-buy if the Comex spot price the same day closes above $28.20. (updated 1 December 2010)

3) Buy one position on the 1 Dec London silver fix or at $28.20, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $27.92.  (updated 1 December 2010)

4) Buy one position on the first Comex silver spot close above $29.34.  I’ll set a stop-out price after this position is filled. (updated 1 December 2010)

Trading Comments, 30 November 2010 (posted 10h00 CET):

The precious metal markets were subjected last week to the buffeting that often incurs during thin holiday trading.  No technical damage was done by the big drop on Friday.  Yesterday’s quick snap-back – particularly in silver – clearly illustrates the underlying strength prevailing in the precious metals. 

The metal markets will probably remain quiet today, given that it is month-end.  I expect the next round of upside fireworks to begin tomorrow.

Gold
1) Long two positions from $1352.20 bought on the Comex spot gold close on November 19, 2010. Stop-out point: sell one position at an intraday stop-out point if Comex spot gold trades at $1347.50. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1352.00.  Sell the other position at an intraday stop-out point if Comex spot gold trades at $1340.50. (updated 30 November 2010)

2) Buy one position at $1362.00 or on the 30 Nov London PM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1354.00. (updated 30 November 2010)

Silver
1) The position bought at $25.229 on November 16, 2010 was sold on November 26, 2010 at $26.645, which was its stop-out point.  Profit: $1.416

2) One position bought at $27.175 on November 19, 2010 was sold on November 22, 2010 at $27.12, which was its stop-out point.  Loss: 5.5¢

3) One position bought at $27.175 on November 19, 2010 was sold on November 22, 2010 at $26.975 [apologies for posting $27.975, an obvious typo], which was its stop-out point.  Loss: 20.0¢

4) Buy one position on the 30 Nov London silver fix.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $27.02.  (updated 30 November 2010)

5) Buy one position on the first Comex silver spot close above $27.28.  I’ll set a stop-out price after this position is filled. (updated 30 November 2010)

Trading Comments, 20 November 2010 (posted 12h00 CET):

The overhead resistance points are clear.  Gold needs to break above $1355, and silver needs to clear $27.30.  Can the gold cartel keep the precious metals below these key levels through option expiry and then also at the end of month for window dressing their balance sheets with favorable marks-to-market? 

I don’t think so because the buying power is too strong.  I particularly like the fact that Comex open interest has remained high, indicating that the shorts are having a tough time covering on this last drop in prices.  They may end up covering in a market with rising prices, which would be explosive. 

I expect gold and silver prices to rise in this US-holiday shortened week.

Gold
1) The position bought at $1336.00 on November 17, 2010 was sold on November 19, 2010 at $1344.00, which was its stop-out point.  Profit: $8.00

2) The position bought at $1350.00 on November 18, 2010 was sold on November 19, 2010 at $1348.00, which was its stop-out point.  Loss: $2.00

3) Long two positions from $1352.20 bought on the Comex spot gold close on November 19, 2010. Stop-out point: sell one position at an intraday stop-out point if Comex spot gold trades at $1340.50. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1352.00.  Sell the other position at an intraday stop-out point if Comex spot gold trades at $1336.00.  (updated 20 November 2010)

Silver
1) The position bought at $26.83 on November 18, 2010 was sold on November 19, 2010 at $26.96, which was its stop-out point.  Profit: 13.0¢

2) The position bought at $26.57 on November 18, 2010 was sold on November 19, 2010 at $26.72, which was its stop-out point.  Profit: 15.0¢

3) Long from $25.229 bought on the Comex silver spot close on November 16, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $26.645. If stopped out, then re-buy if the Comex spot price the same day closes above $26.82. (updated 20 November 2010)

4) Long two positions from $27.175 bought on the Comex silver spot close on November 19, 2010.  Stop-out point: sell one position at an intraday stop-out point if Comex spot silver trades at $27.12. If stopped out, then re-buy if the Comex spot price the same day closes above $27.32.  Sell the other position at an intraday stop-out point if Comex spot silver trades at $27.975.  (updated 20 November 2010)

Trading Comments, 19 November 2010 (posted 10h30 CET):

Asia buying has again driven gold and silver higher, so both metals have opened higher here in Europe.  It is further evidence of a theme I have been making lately that the gold cartel is losing control of the market.  This development couldn’t happen at a better time for the gold and silver bulls.  With the important December options expiring next week, continued price strength will force the shorts to delta-hedge the calls they have written, which could lead to a buying frenzy and bullion prices rocketing higher.

Gold
1) Long from $1336.00 bought on November 17, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1344.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1352.00. (updated 19 November 2010)

2) Long from $1350.00 bought on November 18, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1348.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1352.00. (updated 19 November 2010)

Silver
1) Long from $25.229 bought on the Comex silver spot close on November 16, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $26.28. If stopped out, then re-buy if the Comex spot price the same day closes above $26.32. (updated 19 November 2010)

2) Long from $26.57 bought on the London silver fix on November 18, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $26.72. If stopped out, then re-buy if the Comex spot price the same day closes above $26.94. (updated 19 November 2010)

3) Long from $26.83 bought on the Comex silver spot close on November 18, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $26.96. If stopped out, then re-buy if the Comex spot price the same day closes above $27.02. (updated 19 November 2010)

Trading Comments, 18 November 2010 (posted 09h00 CET):

Gold and silver were on fire in Asia today, and are opening here in Europe well above yesterday’s closing prices.  Resistance levels at $1350 and $26.10 have been hurdled, so gold and silver look poised here to rally back as quickly as they fell. 

It will be interesting to see whether the shorts are able to cap any rally here as we approach option expiration next week.  For years we have watched them cap prices during option expiry so that as few calls as possible expire in the money. 

If the strength we are seeing so far today continues into option expiration next week, it will be an important message from the market.  Namely, it will tell us that silver is trading differently than it has for years, in fact, decades really, which is a point I have been making on King World News.  Silver is trading in ways we haven’t seen since the 1970s, which clearly has bullish implications.  It could be that the banks with the perennial short positions are finally ready to have their head handed to them on a silver platter.

Gold
1) Long from $1336.00 bought on November 17, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1342.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1352.00. (updated 18 November 2010)

2) Buy one position at $1350.00 or on the 18 Nov London PM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1344.00. (updated 18 November 2010)

Silver
1) Long from $25.229 bought on the Comex silver spot close on November 16, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $25.98. If stopped out, then re-buy if the Comex spot price the same day closes above $26.22. (updated 18 November 2010)

2) Buy one position at the market (I’ll use November 18 London silver fix for record keeping).  Stop-out point: sell if Comex spot silver trades 25¢ below your purchase price (updated 18 November 2010)

3) Buy one position on the first Comex silver spot close above $26.16.  I’ll set a stop-out price after this position is filled. (updated 17 November 2010)

Trading Comments, 17 November 2010 (posted 11h15 CET)

Both precious metals closed at a new low for this correction.  That event highlights the need to be extra cautious for now, for example, by keeping tight stops.  But it is not a reason to avoid buying gold and silver here, both of which look like they have finally exhausted themselves on the downside.  So at the very least, look for a relief rally.  I expect however, that this relief rally will be the beginning of the next leg up.

Gold
1) The position bought at $1367.00 on November 15, 2010 was sold on November 16, 2010 at $1356.00, which was its stop-out point.  Loss: $11.00

2) The position bought at $1349.00 on November 16, 2010 was sold the same day at $1339.00, which was its stop-out point.  Loss: $10.00

3) Buy one position at $1336.00 or on the 17 Nov London PM fix, whichever comes first.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1326.00. (updated 17 November 2010)

Silver
1) The position bought at $26.01 on November 15, 2010 was sold on November 16, 2010 at $25.515, which was its stop-out point.  Loss: 49.5¢

2) Long from $25.229 bought on the Comex silver spot close on November 16, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $25.18. If stopped out, then re-buy if the Comex spot price the same day closes above $25.28. (updated 17 November 2010)

3) Buy one position on the first Comex silver spot close above $26.16.  I’ll set a stop-out price after this position is filled. (updated 17 November 2010)

Trading Comments, 16 November 2010 (posted 11.45 CET)

The low of this correction is now probably in place, although one more dip to re-test the lows is of course possible.  If the low is taken out on any daily close, I will need to step back and re-evaluate my short-term (but not my long-term) bullish premises for both precious metals, which is the same thing I will be doing if gold and silver do not bounce back soon to probe overhead resistance at $1420 and $29.20 respectively.

Gold
1) Long from $1367.00 bought on the London AM fix on November 15, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1356.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1362.00. (updated 16 November 2010)

2) Buy one position at the market (I’ll use the 16 Nov London PM fix for record keeping).  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1346.00 or $10 below your purchase price, whichever is lower. (updated 16 November 2010)

Silver
1) Long from $26.01 bought on the London silver fix on November 15, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $25.515. If stopped out, then re-buy if the Comex spot price the same day closes above $25.68. (updated 16 November 2010)

2) Buy one position at the market (I’ll use November 16 Comex silver spot close for record keeping).  I’ll set a stop-out price after this position is filled. (updated 16 November 2010)

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 54.5. (updated 16 November 2010)

Comex options (options are high-risk and therefore not for everyone):
The two Dec’10 Comex 1200 gold calls bought at $67.30 on February 26th and $40.60 on July 29th were sold on November 15, 2010 at $168.50.  Profit: $229.10

The two Dec’10 Comex 18.00 silver calls bought at $1.419 on February 26th and $1.020 on July 29th were sold on November 15, 2010 at $8.094.  Profit: $13.749

Long two Feb’11 Comex 1360 gold calls from $55.70, the November 15, 2010 Comex close.
Long two Mar’11 Comex 26.00 silver calls from $2.267, the November 15, 2010 Comex close.
Hold these calls without any stop-out point. (updated 16 November 2010)

US Dollar Index – The position sold short at 79.83 on September 22, 2010 was bought back at 78.518, the November 15th New York close.  Profit: 1.312, or 1.6%.

Trading Comments, 14 November 2010 (posted 12.00 CET)

For the first time in months, traders are sitting on the sidelines without any positions.  The last gold and silver positions were stopped out on Wednesday and Friday respectively.  I do not expect the correction that began this week to dig deeper, so I recommend buying here.

Regarding options, you probably surmised from my 9 Nov commentary that I was close to recommending that we take profits and exit the trade.  Friday’s price drop changed my thinking.  This trade still has more upside price gains left to it.  So I recommend taking some profits by rolling up to higher strikes and letting this trade run into 2011.

Gold
1) The last position bought at $1337.10 on November 3, 2010 was sold on November 10, 2010 at $1386.00, which was its stop-out point.  Profit: $48.90

2) Buy one position at the market (I’ll use the 15 Nov London AM fix for record keeping).  I’ll set a stop-out price after this position is filled. (updated 14 November 2010)

Silver
1) The position bought at $23.764 on October 19, 2010 was sold on November 12, 2010 at $26.38, which was its stop-out point.  Profit: $2.616.

2) Buy one position at the market (I’ll use 15 Nov the London silver fix for record keeping).  I’ll set a stop-out price after this position is filled. (updated 14 November 2010)

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 55.8. (updated 14 November 2010)

Comex options (options are high-risk and therefore not for everyone):
Long one Dec’10 Comex 1200 gold call from $67.30, the February 26th Comex close. 
Long one Dec’10 Comex 18.00 silver call from $1.419, the February 26th Comex close.

Long one Dec’10 Comex 1200 gold call from $40.60, the July 29th Comex close. 
Long one Dec’10 Comex 18.00 silver call from $1.020, the July 29th Comex close.

Roll (i.e., sell Dec and buy Feb) the two gold calls into Feb’11 1360.  Roll (i.e., sell Dec and buy Mar) the two silver calls into Mar’11 26.00. (updated 14 November 2010)

US Dollar Index – Short from 79.83 sold on the New York close on September 22, 2010.  Stop-out point: buy if the US Dollar Index closes in New York above 78.48. (updated 14 November 2010)

Trading Comments, 10 November 2010 (posted at 15.45 CET)

Government intervention and the gold cartel tried to take charge of the market on yesterday’s close.  They went all-in this time to try stopping gold (and silver too).  They succeeded, if dropping silver to $27 can be considered a “success”.  After all, this price was unrealistic to nearly everyone just a few days ago.  But government intervention and the gold cartel had their ‘moment’.  Nevertheless, my expectation is that silver will again probe its high at $29.20 within a few days.  The violent downside move after yesterday’s close (chosen no doubt by the interventionists because market liquidity is always its lowest point then, meaning that their intervention has a greater impact than it would during periods of high market liquidity) should be viewed simply as a ‘painting the tape’ exercise by the government, the gold cartel and the silver shorts.  After all, none of the dollar’s problems have disappeared, and the Federal Reserve is aiming to add $600 billion of new quantitative easing as well as replace $300 billion that matures over the next six months.  And the euro is not much better, with the European sovereign debt problems again appearing.  These problems did not disappear either, and were just ‘papered over’, which bought some time for the euro.  Note that gold is back over €1000 per ounce.

That outcome of silver’s test of the high at $29.20 that I am expecting will determine silver's course for the next few months.  My best guess is that silver will probe this high price before the Comex Dec options expire on November 23, and will eventually climb higher after that.  There is nothing wrong with the short-term charts, and the long-term charts still look excellent.  So I continue to look for higher prices as we move to the end of the year. But the key here is a big comeback by silver.  Silver needs to bounce back to probe $29.20 within the next few days.  If that doesn't happen, then I need to step back and re-evaluate my short-term (but not my long-term) bullish premises for silver - and gold too.

Gold
1) One position bought at $1371.20 on November 3, 2010 was sold on November 9, 2010 at $1394.00, which was its stop-out point.  Profit: $56.90

2) Long from $1337.10 bought on the Comex spot close on November 3, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1386.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1398.00. (updated 10 November 2010)

Silver
1) The position bought at $24.397 on October 18, 2010 was sold on November 9, 2010 at $26.48, which was its stop-out point.  Profit: $2.083

2) Long from $23.764 bought on the Comex spot close on October 19, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $26.38. If stopped out, then re-buy if the Comex spot price the same day closes above $26.68. (updated 10 November 2010)

Trading Comments, 9 November 2010 (posted 09.45 CET)

The short squeeze in silver is developing more rapidly now, which explains the big moves of late.  I continue to focus on $30 as the next target, but there is no way to predict when and at what price level the squeeze will diminish.  Higher prices will eventually entice some holders of physical metal to take profits, reducing pressure on the shorts.  The only sensible strategy now is to hold tight and continue following the strong uptrend, while also tightening up our stop points to protect profits.

Note that the Dec options expire on November 23, so I will soon be making a recommendation to either take profits or roll them forward.

Gold
1) Long two positions from $1337.10 bought on the Comex spot close on November 3, 2010. Stop-out point: sell one position at an intraday stop-out point if Comex spot gold trades at $1394.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1402.00.  Sell one position at an intraday stop-out point if Comex spot gold trades at $1372.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1378.00. (updated 9 November 2010)

Silver
1) Long from $24.397 bought on the Comex spot close on October 18, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $26.48. If stopped out, then re-buy if the Comex spot price the same day closes above $26.62. (updated 9 November 2010)

2) Long from $23.764 bought on the Comex spot close on October 19, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $25.82. If stopped out, then re-buy if the Comex spot price the same day closes above $26.08. (updated 9 November 2010)

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 56. (updated 9 November 2010)

Comex options (options are high-risk and therefore not for everyone):
Long one Dec’10 Comex 1200 gold call from $67.30, the February 26th Comex close. 
Long one Dec’10 Comex 18.00 silver call from $1.419, the February 26th Comex close.

Long one Dec’10 Comex 1200 gold call from $40.60, the July 29th Comex close. 
Long one Dec’10 Comex 18.00 silver call from $1.020, the July 29th Comex close.

Continue to hold these calls without any stop-out point, but get ready to take profits or roll them forward.  Watch for my recommendation, which will be made soon. (updated 9 November 2010)

US Dollar Index – Short from 79.83 sold on the New York close on September 22, 2010.  Stop-out point: buy if the US Dollar Index closes in New York above 78.40. (updated 9 November 2010)

Trading Comments, 8 November 2010 (posted 10.00 CET)

Trading Comments, 8 November 2010 (posted 10h00 CET):
Last week gold rose 3.0% while silver soared 8.9%.  Why the very different result?  It appears that the shorts are losing control in silver.  Nevertheless, they have not yet thrown in the towel because Comex open interest continues to rise.  Imagine how high silver will soar when the shorts finally panic and begin to cover.

The gold/silver ratio fell from 55.3 to 52.3, which is a huge move for the ratio in just one week.  We are approaching my target range of 52-50.  That remains my target for now, but may need to be re-considered depending upon how this week unfolds.

This week will be an important one.  I would normally expect some consolidation and sideways action after a week like the one we just had if both gold and silver had soared.  Given that only silver had a big week – which was driven by the growing new interest in traders worldwide that something special is happening in silver – I think it is reasonable to expect another big week ahead of us for both of the precious metals. 

Silver is breaking out of the flag pattern that I have been discussing on King World News, so I expect it to carry much further on this move.  Gold looks ready to hurdle above $1400.  My near-term targets remain the same: $1500 gold and $30 silver, which puts the gold/silver ratio at 50.

Gold
1) The position bought at $1371.20 on October 18, 2010 was sold on November 3, 2010 at $1328.00, which was its stop-out point.  Loss: $43.20

2) The position bought at $1338.30 on October 25, 2010 was sold on November 3, 2010 at $1334.00, which was its stop-out point.  Loss: $4.30

3) Long two positions from $1337.10 bought on the Comex spot close on November 3, 2010. Stop-out point: sell one position at an intraday stop-out point if Comex spot gold trades at $1372.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1378.00.  Sell one position at an intraday stop-out point if Comex spot gold trades at $1348.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1352.00. (updated 8 November 2010)

Silver
1) Long from $24.397 bought on the Comex spot close on October 18, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $25.80. If stopped out, then re-buy if the Comex spot price the same day closes above $26.02. (updated 8 November 2010)

2) Long from $23.764 bought on the Comex spot close on October 19, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $24.90. If stopped out, then re-buy if the Comex spot price the same day closes above $25.08. (updated 8 November 2010)

Trading Comments, 31 October 2010 (posted 00.30 CET)

Gold and silver’s strong close on Friday bodes well for the week ahead.  Silver continues to lead, and the gold/silver ratio closed Friday at 55.3, the lowest level since August 7, 2008, which significantly is before the Lehman Brothers collapse and the subsequent huge price slide in silver.  As long as silver continues to lead, expect both precious metals to continue climbing higher.

Trading Comments, 24 October 2010 (posted 16.00 CET)

Last week the shorts got what they were aiming for in gold.  They took gold below some key short-term moving averages, thus shaking out some ‘black-box’ trend followers.  The shorts were therefore able to cover some of their positions by buying what these longs liquidated.  So over the past few days there has been a sharp contraction in Comex open interest, which had grown to record levels over the past few weeks.

Trading Comments, 16 October 2010 (posted 20.00 CET):

In a series of interviews on King World News over the past couple of months, I have been explaining my outlook for the precious metals and in particular, why I was expecting silver to reach $30 this year. 

My forecast was that an upside explosion would take silver to $30 within 4-to-6 weeks when resistance at $20.50-to-$21 was finally broken.  That break above resistance occurred decisively on September 22nd, so at the moment we are only about 3 weeks into the upside explosion.  If my forecast continues to unfold as it has done so far, we could see $30 silver by the end of October or early November.

Consistent with this forecast was a break in the gold/silver ratio below 58, which happened this week.  That is good news for both gold and silver.  My expectation has been that when 58 was broken, the ratio would fall toward 50-52.  A gold/silver ratio of 50 and $30 silver (if it happens) puts gold at $1500.  For now we should continue to focus on these price targets.  There is still no sign of a short-term top. 

We are in a powerful upside breakout in both gold and silver.  Give this market a lot of respect.  Do that by continuing to ride the uptrend.

Trading Comments, 14 October 2010 (posted 14h00 CET):

Both gold and silver opened strong in Europe.  The spike at the open into the $24.80s was probably under-margined shorts getting liquidated by their brokers.  There is no reason to sell here, but raise your stop-out points again.  There are still no signs of a short-term top, so continue to ride the uptrend.

Gold
1) Long from $1306.60 bought on the Comex spot close on September 28, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1354.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1366.00. (updated 14 October 2010)

2) Long from $1369.50 bought on the Comex spot close on October 13, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1374.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1382.00. (updated 14 October 2010)

Silver
1) Long from $18.369 bought on the Comex spot close on August 24, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $23.26. If stopped out, then re-buy if the Comex spot price the same day closes above $23.32. (updated 14 October 2010)

2) Long from $21.688 bought on the Comex spot close on September 28, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $23.78. If stopped out, then re-buy if the Comex spot price the same day closes above $23.94. (updated 14 October 2010)

Trading Comments, 13 October 2010 (posted 10h15 CET):

We are seeing powerful trading action from both gold and silver.  There are still no signs of a short-term top.  So expect more new highs in gold and silver.  Continue to ride the uptrend.

Gold
1) Long from $1306.60 bought on the Comex spot close on September 28, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1322.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1326.00. (updated 13 October 2010)

2) Buy one position if spot Comex gold trades at $1348.00 or on the first close in New York above $1360, whichever comes first.  I’ll set a stop-out price after this position is filled. (updated 13 October 2010)

Silver
1) Long from $18.369 bought on the Comex spot close on August 24, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $22.28. If stopped out, then re-buy if the Comex spot price the same day closes above $22.52. (updated 13 October 2010)

2) Long from $21.688 bought on the Comex spot close on September 28, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $22.88. If stopped out, then re-buy if the Comex spot price the same day closes above $23.08. (updated 13 October 2010)

Trading Comments, 9 October 2010 (posted 21h00 CET):

There are no signs of a top – yet.  So until there are signs of a top, expect more new highs in gold and silver.  Continue to ride the uptrend.  Gold and silver will eventually take a breather.  The likely way they will do that is to move sideways in a “pennant” or a “flag” consolidation pattern formed over several days.  One of these patterns may have begun being formed the last two days.  Time will tell.

Gold
1) One of the positions bought at $1306.60 on September 28, 2010 was sold on October 4, 2010 at $1312.50, which was its stop-out point.  Profit: $5.90

2) Long from $1306.60 bought on the Comex spot close on September 28, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1318.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1326.00. (updated 9 October 2010)

Silver
1) Long from $18.369 bought on the Comex spot close on August 24, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $21.76. If stopped out, then re-buy if the Comex spot price the same day closes above $21.82. (updated 9 October 2010)

2) Long from $21.688 bought on the Comex spot close on September 28, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $22.180. If stopped out, then re-buy if the Comex spot price the same day closes above $22.28. (updated 9 October 2010)

Trading Comments, 2 October 2010 (posted 15h00 CET):

Gold and silver broke through resistance this week with a new record high close for gold and a 30-year high for silver.  Though the precious metals broke through the lines, they are advancing like infantry, not tanks - and I expected the latter.  But this slow-motion assault is no reason to turn bearish.  I expect more new highs in gold and silver this week.

Gold

1) The position bought at $1162.00 on July 29, 2010 was sold on September 28, 2010 at $1284.00, which was its stop-out point.  Profit: $122.00

2) The position bought at $1290.20 on September 22, 2010 was sold on September 28, 2010 at $1286.00, which was its stop-out point.  Loss: $4.20

3) Long two positions from $1306.60 bought on the Comex spot close on September 28, 2010. Stop-out point: sell one position at an intraday stop-out point if Comex spot gold trades at $1312.50. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1316.00. Sell the other position at an intraday stop-out point if Comex spot silver trades at $1307.50. (updated 2 October 2010)

Silver

1) The position bought at $21.383 on September 24, 2010 was sold on September 28, 2010 at $21.24, which was its stop-out point.  Loss: 12.3¢.

2) Long from $18.369 bought on the Comex spot close on August 24, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $21.48. If stopped out, then re-buy if the Comex spot price the same day closes above $21.52. (updated 2 October 2010)

3) Long from $21.688 bought on the Comex spot close on September 28, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $21.725. If stopped out, then re-buy if the Comex spot price the same day closes above $21.78. (updated 2 October 2010)

Trading Comments, 25 September 2010 (posted 15h15 CET)

Gold made a new record high close yesterday along with a 30-year high in silver.  The upside explosion we have been waiting for is beginning.  I expect the momentum to continue building, which should put the XAU and HUI mining stock indices at new records this week.

Gold
1) Long from $1162.00 bought on July 29, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1284.00.  If stopped out, then re-buy if the Comex spot price the same day closes above $1294. (updated 24 September 2010)

2) Long from $1290.20 bought on September 22, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1286.00.  If stopped out, then re-buy if the Comex spot price the same day closes above $1288. (updated 24 September 2010)

Silver
1) Long from $18.369 bought on the Comex spot close on August 24, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $20.78. If stopped out, then re-buy if the Comex spot price the same day closes above $20.82. (updated 25 September 2010) 

2) Long from $21.383 bought on the Comex spot close on September 24, 2010.  Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $21.24. If stopped out, then re-buy if the Comex spot price the same day closes above $21.38. (updated 25 September 2010) 

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: none for the moment (updated 1 July 2010)

Comex options (options are high-risk and therefore not for everyone):
Long one Dec’10 Comex 1200 gold call from $67.30, the February 26th Comex close. 
Long one Dec’10 Comex 18.00 silver call from $1.419, the February 26th Comex close.

Long one Dec’10 Comex 1200 gold call from $40.60, the July 29th Comex close. 
Long one Dec’10 Comex 18.00 silver call from $1.020, the July 29th Comex close.

Hold these calls without any stop-out point. (updated 3 August 2010)

US Dollar Index – Short from 79.83 sold on the New York close on September 22, 2010.  Stop-out point: none for the moment. (updated 23 September 2010)

Trading Comments, 24 September 2010 (posted 10h15 CET)

Silver opened strong here in Europe this morning.  Gold is doing well too and looks ready to challenge $1300 before the day is over. A new record high close in gold today along with a new 30-year high in silver would signal the beginning of the upside explosion that we have been waiting for.  Additional confirmation would come from new highs in the XAU and HUI mining stock indices.

Trading Comments, 23 September 2010 (posted 10h00 CET)

Good action in both gold and silver, but I am particularly impressed by silver, which is doing wonderfully in battling resistance at $21.  I have seen nothing to change my view that an upside explosion is just around the corner – and it may still start this week.

Trading Comments, 22 September 2010 (posted 09h30 CET)

We had the profit taking the last couple of days I said to expect, and most importantly, the good buying came in on all the pullbacks.  So will the rest of my September 18th comments be accurate as well?   Will this be the week “in which we finally see silver soar through $21 and gold clear $1300”?  Probably, but it is not a slam-dunk; it never is.  But yesterday’s FOMC meeting made clear that it is only a matter of time before the Fed starts pumping again.  So the precious metals have been climbing since the Fed announcement in anticipation of the next round(s) of dollar debasement.

Trading Comments, 18 September 2010 (posted 18h00 CET)

Given the big gains in the precious metals over the past several days, it is reasonable to expect some profit taking early this week. The key will be to watch what happens on the dips.  If good buying comes in on all the pullbacks – as it has for over a month now – then expect higher prices by the end of the week, which would mean that this coming week could be the one in which we finally see silver soar through $21 and gold clear $1300.

Trading Comments, 15 September 2010 (posted 10h30 CET)

On Monday silver climbed above resistance at $20, and yesterday gold broke into new high ground.  The XAU Mining Share Index has also powered higher.  I expect prices to continue moving higher.  The important break-out for silver above $20.50-$21 is rapidly approaching.

Trading Comments, 12 September 2010 (posted 17h00 CET)

Gold and silver were both lower last week, but only slightly.  All in all, it was another positive performance by the precious metals, given that the gold cartel is doing everything it can to stop them from breaking out above $1260 and $20.  Note how the Comex open interest is rising with relatively little price appreciation. This result is evidence that the gold cartel is adding to their shorts as they dig-in with their price capping efforts.

The other potential negative here is sentiment.  The precious metals are far from major overbought levels, but things are a bit frothy here.  So gold and silver could move sideways for a couple more days before heading higher.

Nevertheless, every dip last week was well bought, and the demand for physical metal has not slackened as prices have risen. This action is very bullish, which is confirmed by the technical picture.  So I continue to expect that prices will soon explode higher, particularly silver.  Therefore, look for the gold/silver ratio to fall further as silver outperforms.

Trading Comments, 7 September 2010 (posted 11h45 CET)

Last week gold rose 1.1% while silver rose a stunning 4.6%.  After that performance, a day or two of ‘backing-and-filling’ would not be unreasonable, and it looks like the shorts began this week doing their best to keep gold and silver from exploding higher.  Nevertheless, I still expect both gold and silver to make new highs soon.

Trading Comments, 3 September 2010 (posted 10h40 CET)

News announcements often lead to major pivot points in the precious metal markets.  Today’s US unemployment report may be one of those moments in time.  Any big surprise could send precious metal prices either up or down.  But if the surprise leads to a dip in prices, we should look to add to our positions.  Also, if the precious metals close strong (i.e., a new high in gold), then plan to buy in anticipation of a gap open on Monday morning and higher prices next week.

Trading Comments, 25 August 2010 (posted 11h50 CET)

Was yesterday’s big move in silver the beginning of the upside explosion I have been talking about?  Could be, but it could also be a head-fake.  No one can predict the future.  Only time will tell, but we have to assume that the low reached yesterday is the final low.

Trading Comments, 22 August 2010 (posted 13h00 CET)

Get ready.  This is the week to buy silver.  I expect that some time over the next few days we will see the final low price in silver before starting its climb above $20 on its way to $30, which has been my target for this year.  But for this target to remain valid, silver needs to hold support here and turn-around to the upside by early September.  I expect it will do that because nothing has diminished the bullish fundamental picture for silver – and for gold too I should add.

Trading Comments, 18 August 2010 (posted 05h30 CET)

Silver finally cleared resistance in the high $18.40s and triggered our buy stop there on today’s New York close.  Let’s see if silver can hold this level, particularly with option expiry coming soon.

Given the strength we have seen in both precious metals, perhaps this option expiry will be the one I have been waiting for – the shorts get overpowered by new buyers, and their getting squeezed results in a moon-shot for the precious metals.  Everything remains in place for an upside explosion in silver.

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