Goldman Sachs News Mask Silver and Gold Prices Take Down
It's been said that you should never waste a bad news article, use it to cover or hide behind what you really want to do, it's an opportunity. So, of all the days to release the Goldman Sachs fraud investigation news they chose Friday 17th April 2010. Ring any bells, yes that's right it was the option expiry date for the month of April.
MarketWatch led with this article:
A golden mystery.
ANNANDALE, Va. (MarketWatch) -- There very well may be a rational explanation for why today's fraud charges against Goldman Sachs Group Inc. should cause gold to fall.
But it's not immediately obvious what that explanation would be, since gold would have been expected to rise in the face of such news. Anything like this that shakes confidence in the integrity of the financial system should, other things being equal, be good for gold -- a store of value that is not dependent on any government or financial market.
We agree both silver and gold prices should have headed north on this type of news, however they took a battering as the last day of trading for the April series unfolded.
On the 30th March 2010 we posted an article entitled: An Interview with the Whistle Blower Andrew Maguire whereby Andrew Maguire & Adrian Douglas Discuss What Could Be the Largest Fraud in History - Andrew is an independent metals trader turned whistle blower at the center of a storm for exposing what could be the largest fraud in history involving countries, banks and government leaders
Also on the 29th March 2010 we posted an article entitled: CFTC whistle blower injured in London hit-and-run: Coincidence?
There a couple of youtube clips here of Bill Murphy of GATA (Gold Anti-Trust Action committee) Speaking to CFTC about manipulation in the precious metals market to a sadly dis-interested panel. Bill produces a rabbit out of the hat in the form of a whistle blower who strangely enough is the victim of a hit and run accident the following day
Having been put under the spot light we expected this series of options trading to draw to a close in a steady fashion, but we were wrong, instead we got wallop, take that, as gold prices were taken down.
The point to be heeded, if you do trade options, is to steer well clear of the expiry date with your trades. If necessary close your position and acquire a similar position further out in time to allow your strategy to develop and meet with your objectives. Options trading is a tricky and dangerous business as once you have purchased a contract the race against time is on and as we know time waits for no-one.
To close, a snippet from the latest missive from Jim Sinclair:
"Stay the course." "We are a few days from a stratospheric takeoff in the price of gold."
Well there we have it, this coming week could be one to remember so stay tuned and remain calm the best you can.
As a suggestion for those who do want leverage to the precious metals bull, the gold and silver funds together with the careful application of options trades could be a possible solution for you. This way we are exposed to any movement in gold prices which in turn is magnified by the effect of the option. Do remember that loses are also magnified in the same way so its not a strategy for the faint hearted. On the other hand the quality stocks are not performing as anticipated and a non-producing junior stock is a shot in the dark, however, its your money and its your call.
Our premium options trading service, SK Options Trading, has closed the last 7 trades, with an average gain of 51.17% in an average of 37 days per trade, why not drop by and take a peak.
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