Precious Metals Establishing Trading Range

There is something very interesting about the above www.kitco.com graph. Notice that for the last three days, there has been a significant drop at the opening of the New York market. This is typical of what has happened a great majority of the time. One must ask, "Why?" One possible answer is that the "cartel" or "da boyz" are protecting their short interest. I believe that is the probable answer, else why would it happen at the same times almost every day?

For most of yesterday, it seemed that gold was establishing a range from about 940 - 950+. Today, it has dropped below the bottom to 932 at this time. We will have to wait and determine the new trading range after last week's big drop. Silver is holding at 17.93 now.

This is the season that the precious metals generally take a rest. However, we have the new influences which may have an impact to keep them somewhat stronger this year. Time will reveal this to us.

In the meantime, keep your trailing stops on a good portion of your mining stocks and keep your powder dry searching for opportunities to add to your portfolio. At times, it is best just to sit still trusting in the Lord and do nothing in the market, but observe.

Meanwhile, the general market has had some bad down days, but it is up 57+ early today. All commodities seem to be under pressure. Perhaps, they are pointing toward sluggish economies. In spite of slow downs, both China and India are looking strong. The future for the Indian economy looks very bright as it moves to catch up percentage wise with that of China. One might even consider the ETF on India: PIN. Maybe call options would be in order when there are dips in PIN.

One method for protecting your precious metals portfolio from drops in value is to sell call options on some of the major miners in portfolio. You can sell the options at execution prices which will provide you with a profit if they are exercised. Usually, shorter term options are desirable when you are on the sell side. Once the sale of the option is made, the cash from the sale is put in your portfolio, and effectively reduces your cost of the underlying stock. If the option is exercised, they you will receive additional cash from the sale of the stock. However, it the option is allowed to expire, the original sale price of the option is yours to keep. A neat tactic.

Nevertheless, we must still praise King Jesus for His many blessings and seek ever more strongly to honor Him by keeping His commandments.

Best to each, Doug