Gold holds as market tumbles on Greek Referendum

The stock market dropped dramatically in the morning, bounced then sold off near the end of day.  S&P500 down 2.79%.  Gold however held up very well, selling with risk off mood but bought up on the dip showing the bulls are back in control of this market.  It isn't surprising that gold is catching a bid while other risk assets tumbled.  With Yen intervention Sunday (Sharp 5% jump) Night and Greek Referendum (over 3% drop in Euro) called today, major currency are at risk of volatile moves.

Continue to watch gold as the US will be entering debt discussions shortly to find ways to trim its deficit.

Note the volume is above average and bearish.  This market is in trouble with breaks of 121 on the SPY.

Yamana Gold (TSX: YRI) (NYSE: AUY) - 10/26/2011 - Unusual move, likely flushed out weak hands

Yamana Gold (TSX: YRI)  (NYSE: AUY) - 10/26/2011

Research done by Andrea Kramer on Schaeffer's Options Center

Article: Unusual Call Activity on BP, STP, AUY, and CMI - 10/26/2011 10:29:36 AM

"Moving on, AUY followed gold futures into the black yesterday, attracting a bevy of bullish option bettors in the process. Garnering notable attention was the near-the-money January 2012 16-strike call, which saw close to 4,250 contracts change hands. The bulk of the volume traded at the ask price, and call open interest at the LEAPS strike ballooned overnight, pointing to newly bought bullish bets. In early trading, AUY has tacked on another 1.7% to explore the $15.77 region."

Andrea was referencing this spike in volume for the 2012 Jan 21 16.00 Call for Yamana Gold Inc.


 Yamana Gold's Thrid Quarter results will be coming out November 2, 2011 after close. 

TORONTO , Oct. 4, 2011 /CNW/ - YAMANA GOLD INC. (TSX:YRI; NYSE:AUY; LSE:YAU) today announced that its third quarter 2011 results will be released after market close on November 2, 2011 followed by a conference call and webcast on November 3, 2011 at 11:00 a.m. ET . 

 Press release PDF download

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Gold $1920 - all time high - September 6th, 2011 - Gold breaks $1900

Gold makes its move over the all time high recently set, to close to or at $1920.  This rise in gold is impacted significantly by the recent and continuing turbulence in the world.

See previous post: Geo Poltical Risk - International economic slowdown - Markets poised to open sharply lower:

Gold, Silver, and S&P500 Correlation Breakdown | Silver chooses to follow Gold rather than the S&P 500

The last few days have been all over the map, but it can be clearly seen that today resulted in Silver deciding to trade like a precious metal on the back drop of possibly the worst economy backdrop in the history modern economics. Watch for silver out performing gold over the next few months, including dropping less in a correction than gold.

Gold $ 1700 | Gold breaking to new highs | Precious metals rally of downgrade

Gold's natural reaction occurred as soon as the price started to trade.  Within 5 minutes over $20 gain.  The price is currently sitting at its all time high of 1695.50.

Hang on folks, you ain't seen nothing yet.  Other PMs jumped as well with Silver trading over 4% higher on the open. 
This is related to the US debt downgrade, along with instability in Euroland and in other parts of the world. We are witnessing history and there is a lot more surprises / certainties to come.  Keep focus on PMs as currency wars are heating up.

China adjusts currency peg, flexing muscles as an emerging leader and economic power.  
Bank of Japan intervenes in currency markets to devalue the Yen
ECB continues to buy large quatities of bonds all to help saving Ireland, Greece, Italy, Spain, Portugal, etc

Live Gold, Silver, Platinum, and Palladium below (Kitco.com) 

Gold has just made a new all time high

This morning gold came close to 1580 breaking it ask time high of 1577. Look for the price to accelerate when the US market opens.  Silver is testing 37 as I am posting this as well.

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%.

Silver New Post-Hunt Brothers High ($40), Gold All time High ($1466), FVI.TO had 15.47% gain (all time high!)

With the dollar continuing to get crushed with events such as these looming:

• The threat of a government shutdown
• Portugal has officially asked for help from the ECB
• Japan aftershock and degrading nuclear situation
• Riots/revolutions in middle east/Africa occuring in Cote D'Ivoire, Syria, Yemen, Tunisia, Egypt, and more
• Libya where there is a full blow new war causing oil prices to sky

 It is easy to understand why Gold and Silver are seeing relentless buy pressure.  Remember the FED has pumped massive amounts of money into the system via QE1, QElite, QE2.  They are doing this by buying back Treasury bonds some issued literally 1 week earlier by the Treasury Department.  For foreign holders of US debt, their patience is running on empty leading many people to believe that the US dollar could face massive sell pressure over the next year.  This would lead to substantial inflation in the US.  If you were a treasury holder would you want to be the last one out of the door?

  Well silver has officially hit $40 twice.  I fully expect that when the stops are taken out that are around the $40 level watch out.  There could be a correction, however, $50 will be hit by Summer there is little doubt.  This is truly remarkable, as last summer the price was fighting a battle around the $18 mark.  Check out the latest price @ Kitco

All time high for gold.... Wow.  1500 will have to be touched by summer.  Check out the latest price @ Kitco   

Now to a specific company I have been trading and commented about over the past few months.

Fortuna Silver Mining FVI on the TSX:
From a technical standpoint this looks very attractive for various reasons:

• Massive Move breaking to new all time high ($6.30)
• Volume was 2.9 million where the 50 day average is 782K
• MACD had a bullish cross over
• Slow Stochastics is a 58 therefore plenty of room to run

Caveat: The move today was massive, and took price action above the Bollinger band.  Therefore, a pull back is very likely and will be a buying opportunity.