Gold break out again; close to all time high | Silver soon to follow

Gold does it again, sneaks up on common observer and is filtering with all time highs ($1577 and change).  Today's move came at 1:45-2:15 where gold jumped $20 to just shy of 1575.  Remember folks the screams and shouts about gold being over priced a few months back as prices started to slide.  This new relevance of gold is putting central banks around the globe into panic mode.  The fear is simply a loss in faith of governments as they ramp up the printing machines to fight this second crunch.  With The US debt debate in full swing it will be interesting to see how it will be resolved and what the market reaction will be.  August 2nd, 2011 is a big day for the US and it is approaching relentlessly.


Yamana Gold Inc, (YRI on the TSX) has been a company I have been watching for some time now.  Search for YRI for more posted from the past 6-12 months.  This company is outside my normal range of $2-$7 stocks but it is awesome for options as they are relatively liquid.  Currently I have an August option @ $12 strike.

Today's move was dramatic, 3.32%.  Note that since it has blown outside the bollinger bands it would be unwise to jump in now as it is likely to correct.  However, picking this stock up at 12.00-12.10 with a tight stop would be a high potential trade with limited downside.  The slow stochastic is overbought but looking like it my "embed" which means the K and D line will remain above 80 for a few more days while the stock gains another buck or so.  I am looking at the $13 area as a potential time to exit unless it is reached in short order.   This is one of those stocks that reacts very well with gold.

In fact Yri could be considered undervalued relative to gold by about 10%.