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« Silver Wheaton Corporation Call Options Update 25 September 2010 | Main | Where will Silver go this week? »
Tuesday
Sep212010

Ben Bernanke boosts gold and silver prices

USD Chart 22 sep 2010.JPG



Ben Bernanke mentioned the 'Deflation' word today and his willingness to make the necessary accommodations to avoid it, causing the US Dollar to fall dramatically, giving both gold and silver prices a boost. The thought had occurred to us that just maybe he is a closet precious metals bug, well, it is the silly season!

In an attempt to regain our senses we will take a quick look at the chart and as we can see the USD was already struggling before todays events gave it a shove south. The technical indicators are in the oversold zone and we suspect could stay there for some time. With the prospect of the printing presses being cranked up again the debasement of the American currency continues rendering the dollar weaker with every new dollar that gets created.

Checking the air waves we have this snippet from The Guardian:

The US central bank made no shift in monetary policy at the end of a one-day meeting, but analysts and traders recognized in Bernanke's statement greater concern about the sluggish pace of economic growth and uncomfortably low inflation than when the Fed last met in August.

"The committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate," the Fed said in a statement.




Over at Bloomberg they had this to say:

The National Bureau of Economic Research yesterday said the worst recession since the 1930s ended in June 2009. Unemployment in the U.S. may stay above pre-recession levels until at least 2013, the Organization for Economic Cooperation and Development said in a report the same day.

Gross domestic product expanded at a 1.6 percent annual rate in the second quarter, and St. Louis forecasting firm Macroeconomic Advisers estimates growth is tracking at a 1.4 percent annual rate for the third quarter.

Bernanke told central bankers gathered in Jackson Hole, Wyoming, on Aug. 27 that “preconditions for a pickup in growth in 2011” appear to be in place. Even so, policy makers are “prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly.”


Well its as good as baked into the cake that we are in for another round of 'Quantitative Easing' as they like to call it, makes them sound as though they are the really bright ones who ought to be listened to. Ignore em and listen to gold and silver, their movements are telling you everything that you need to know.

Get a position and hold on tight, expect a rough ride but keep hold of your precious metal investments, sell the cat if push comes to shove, sorry cat lovers.

Over in our options trading den they have updated the chart to show all the closed trades as of today, so you can see exactly how it is going, please click this link.



Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

On Friday, 27th August 2010, we closed another successful trade banking a profit of 79.46% on Call Options on Silver Wheaton.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09. On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days, with more positions opened yesterday. Drop by and take a look.


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The cat 22 sep 2010.JPG


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Reader Comments (3)

Team,

No comments! Whats the problem, if you disagree with us please fire in your thoughts and we will do our best to answer your concerns.

cheers,

Bob

September 22, 2010 | Unregistered CommenterSilver Prices

Whats the problem? Than just hold SLW calls $26 and $27 up to November/10? I was burned from Oil price and Suncor when had turned in opposite direction. SLW is in big bubble teritory in 2010. And Silver price is not.
Check the charts from oil versus suncor between march/august 2008.I'm trying to help you, that the STOCK market many times doesn't have any logic explanation.
And do you have a plan for holding SLW options till November?

September 25, 2010 | Unregistered CommenterMike SR

I'd sell off all my stocks and all my holdings in precious metals and all my holdings in stocks before I'd ever even think about selling my cat!

October 1, 2010 | Unregistered CommenterZenwalker

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