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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Mark Fowler who wrote (7001)	5/19/2001 6:09:22 PM
From: craig crawford	Read Replies (1) \| Respond to of 57684

I'm focusing option plays on HM & NEM. They are supposed to be pretty well levered to price changes in the metal and not overly hedged like some others. HM and NEM are right at resistance after a sharp spike up so they are due for a pullback any day now. But you can never tell with gold (or other commodities), sometimes they stay overbought for a while. Also, gold and silver stocks and bullion have been down so long now that on a long-term chart these spikes aren't that significant looking so maybe it can run for a while before pulling back significantly. I just dunno bout these things. It's paid off to ignore gold and silver ever since I was about 8 years old so I'm not sure what to make of all this. I just know gold stocks look overbought short-term but longer-term it pays to keep a close eye on it. P.S. Israel conducting more air strikes against Palestenians this weekend---more deaths and casualties. Oh my. What would a middle eastern crisis do for gold/oil prices? From Briefing: Both gold and oil were notably strong today. The June contract on gold rose $13.80 (5.0%) to $287.80. This morning, Briefing.com noted the Bank of England had reduced the size of its gold auction to 20 tonnes this Tuesday from 25 tonnes at the prior 11 auctions. There is speculation now the BOE might further reduce or eliminate the sale of its reserves altogether. Gold-related equities spiked behind strength in the commodity with the XAU posting a 4.1% gain on the day... Separately, oil was also strong with the June contract on crude edging its way towards $30 per barrel. The contract closed at $29.91 which was higher by $1.00 or 3.5% for the session. Contributing to the rise in price was indecision regarding a production cut at a European refiner. XOI +2.2%, S&P Midcap 400 -0.2%, DJTA +0.7%, DJUA +1.0%, Nasdaq 100 +0.1%, SOX +0.3%, NYSE Adv/Dec 1665/1384, Nasdaq Adv/Dec 1967/1821 1:47PM Homestake Mining (HM) 7.77 +0.59: The glitter is back in the gold sector, as stocks benefitting from a surge in spot gold prices... Gold is currently up $5.30 to $279.30 per ounce... Rally in gold triggered by: Fed's efforts to reinflate the US economy. Short squeeze. Recent improvement in the yen/dollar relationship... Stronger yen is usually seen as good for gold, as Asians are larger purchasers of the metal. Futures up on short-term supply concerns. Technical buying on break of pivotal resistance in $270 area. Not surprisingly, mining companies such as Homestake (HM) are being rediscovered by investors... Regular readers of this page would have been ahead of the game, however, as Briefing.com issued a bullish report on HM back on 3/9... The stock is up 20% since that time, with further gains in store... While HM might spend some time backing and filling given stubborn resistance in the $8 area, as long as spot gold holds above $265, the stock should resume its advance in short order... And given the fundamental backdrop for gold, and the recent upside breakout, Briefing.com contends that spot prices will have no trouble staying above the key $265 (price above which company expects to operate profitably) level... In fact, we wouldn't be at all surprised if gold rallied to the $290-$300 area [hah! It almost hit $290 the same day!!] over the next few months... Considering that gold stocks historically rally about 3%-5% for every 1% improvement in spot prices, HM is well positioned to extend its current rally. -- Robert Walberg, Briefing.com