Trading Comments: Accumulate Physical Metals Regularly

Traders have been on the sidelines because there is nothing to do from a trading perspective. But I assume that everyone continues to follow my longstanding strategy of buying physical metal through a regular monthly accumulation plan. You are picking up some very undervalued metal here.

After the big price drop last month, I have been waiting to see whether the precious metals form a “V” or a “W” bottom. At the moment, gold looks like the former and silver the latter. We’ll see how it plays out, but in the meantime, I recommend buying a breakout from the current trading range.

It is a risky strategy in the price manipulated market in which we are trading. Note how the shorts and central planners gunned for stops above the market in early April before taking gold and silver prices lower. They may try the same thing now, but then again, this time they may not be successful in their price manipulations. As I always say, no one can predict the future.

Gold
1) The position bought on the Comex close in New York on April 9, 2013 at $1586.20 was sold at $1556.20 on April 10, 2013, which was its stop-out point. Loss: $30.00

2) The position bought on April 5, 2013 at $1,562.00 was sold at $1564.00 on April 10, 2013, which was its stop-out point. Profit: $2.00


3) The position bought on April 4, 2013 at $1578.00 was sold at $1564.00 on April 10, 2013, which was its stop-out point. Loss: $14.00

4) The position bought on April 4, 2013 at $1546.00 was sold at $1548.00 on April 12, 2013, which was its stop-out point. Profit: $2.00

5) Buy one position if the Comex spot gold price trades at $1,484.00. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

6) Buy one position on the first Comex close in New York above $1,478.00. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $30.00 below your purchase price.

Silver
1) The position bought on the Comex close in New York on April 9, 2013 at $27.866 was sold at $27.366 on April 12, 2013, which was its stop-out point. Loss: 50.0¢

2) The position bought on April 9, 2013 at $27.50 was sold at $27.18 on April 12, 2013, which was its stop-out point. Loss: 32.0¢

3) The position bought on April 5, 2013 at $27.15 was sold at $26.94 on April 12, 2013, which was its stop-out point. Loss: 21.0¢

4) The position bought on April 4, 2013 at $26.78 was sold at $26.80 on April 12, 2013, which was its stop-out point. Profit: 2.0¢

5) Buy one position if the Comex spot silver price trades at $24.45. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades subsequently at $24.18.

6) Buy one position on the first Comex close in New York above $24.14. Stop-out point: sell at an intraday stop-out point if Comex spot gold closes in New York more than 50¢ below your purchase price.

Gold/Silver Ratio – On April 18, 2013 traders unwound at 59.9 the ratio sold on April 4, 2013 at 58.0. The loss was 1.4 ticks, or 2.4%.

I recommend that traders sell the ratio (buy silver and sell an equal dollar amount of gold) at the market (I will use today’s Comex close for record keeping). Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 63.2.

Comex options (options are high-risk and therefore not for everyone):
I recommend that traders again roll down their calls to lower strikes. Sell the existing calls to reduce the purchase price of the new call being purchased. I’ll use today’s closing Comex prices in New York for record keeping.

Buy the December ’13 Comex 1500 gold call at the market. Sell the December ’13 Comex 1600 gold call.

Buy the December ’13 Comex 24 silver call at the market. Sell the December’13 Comex 28 silver calls.

Hold these calls without any stop-out point.