Mining stocks had a nice day today with gold still hovering in the $1,190’s. Silver is still trading in the low $16’s and both metals are up week over week. JNUG was up over 10%, NUGT 7% and GDX 2.71%. I would love to see JDST under $10 again where it may become real attractive. Still look at today’s highs for possible long trades with stops, and keep an eye on gold breaking the $1,200 resistance to possibly swing trade some of the miners long.
From the Trading Desk
Gold had a choppy session yesterday with 266,000 lots trading in Comex December gold, the fourth highest volume day of the contract thus far. Gold tanked $20 to start yesterday’s session after a poll showed that Swiss voters will reject an initiative requiring the central bank to hold at least 20% of assets in the yellow metal. Despite the SPDR gold ETF adding to holdings modestly last week, overall holdings in exchange-traded products this week have slumped to a five year low.
As the session wore on yesterday, gold managed to recover from its earlier sell off. Participants were cautious ahead of the FOMC minutes and then there was some volatile price action in the wake of them. Nothing particularly groundbreaking was revealed in the FOMC minutes but it still managed to cause some jitters. The USD remains near a 5 year high against a basket of currencies.
Even though ETFs continue to shed gold ounces, physical demand is picking up in the Far East. Switzerland was a net exporter of gold in October for the first time this year with most of it heading to China, Hong Kong and India. Resistance in gold is coming in at $1,200, a psychological level gold has broken twice, but not closed above, in two of the past three trading days. Silver hasn’t done much of note since breaking above $16 last Friday. It has formed a base at $16 over the past three trading sessions though and investors have been adding cautious long positions ahead of this support level.
UGAZ was up 4.83% today and was a good risk reward play from yesterday. I’d be a buyer if it broke over $18.81 or a buyer of DGAZ now if it broke over $2.90, with stops of course.
USO is trying to find some momentum but is still a risky play.
TZA gave back some of what it gained yesterday with decent employment numbers and housing data.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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