Gold And Silver Trading Comments: November 5, 2012

The black-box trend followers, which have had their pockets picked time and again, look like they are going to be chopped up with another whip-saw. The precious metals are probably at a low, meaning they will soon reverse and head higher from here. So it’s time to buy to again to start re-building a position.

We have been stopped out of all of our positions. We’ve taken some good profits on both gold and silver that will more than compensate us for the losses that we are likely to take on the Dec’12 options. But I do not recommend selling these options – at least not yet.

Gold
1) The position bought at $1794.10 on the Comex close on October 4, 2012 was sold on October 9, 2012 at $1764.00, which was its stop-out point. Loss: $30.10

2) The position bought at $1639.90 Comex close in New York on August 21, 2012 was sold at $1731.90 on October 19, 2012, which was its stop-out point. Profit: $92.00

3) The position bought at $1669.60 Comex close in New York on August 23, 2012 was sold at $1731.90 on October 19, 2012, which was its stop-out point. Profit: $62.30

4) The position bought at $1598.00 on July 25, 2012 was sold at $1711.90 on October 23, 2012, which was its stop-out point. Profit: $113.90

5) The position bought at $1592.00 on August 3, 2012 was sold at $1711.90 on October 23, 2012, which was its stop-out point. Profit: $119.90

6) The position bought at $1612.00 on August 7, 2012 was sold at $1711.90 on October 23, 2012, which was its stop-out point. Profit: $99.90

7) Buy one position at the market. Gold is presently trading at $1679.50, so I will use this price for recordkeeping. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades below $1657.00.

8) Buy one position if the Comex spot gold price trades at $1,692.00. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than $38.00 below your purchase price.

9) Buy one position on the first Comex close in New York above $1712.00. 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 at $29.421 on the Comex close in New York on August 21, 2012 was sold at $32.799 on October 15, 2012, which was its stop-out point. Profit: $3.378

2) The position bought at $27.60 on August 3, 2012 was sold at $31.799 on October 23, 2012, which was its stop-out point. Profit: $4.199

3) The position bought at $28.586 on the Comex close in New York on August 20, 2012 was sold at $31.799 on October 23, 2012, which was its stop-out point. Profit: $3.213

4) Buy one position at the market. Silver is presently trading at $30.945, so I will use this price for recordkeeping. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades below $30.60.

5) Buy one position if the Comex spot silver price trades at $31.25. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 55¢ below your purchase price.

6) Buy one position on the first Comex close in New York above $31.40. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at more than 50¢ below your purchase price.

Gold/Silver Ratio – Traders unwound at 53.1 on October 15, 2012 the short ratio position (they bought silver and sold an equal dollar amount of gold) sold at 57.8, which was the Comex close on August 3, 2012. Profit: 4.7 ticks, or 8.1%
Traders should sell the ratio (buy silver and sell an equal dollar amount of gold). I’ll use today’s NY close for recordkeeping. Stop-out point: Unwind this trade on the ratio’s first Comex close in New York above 56.0.

Comex options (options are high-risk and therefore not for everyone):
Buy the Feb’13 Comex 1800 gold call at the market. Buy the Mar’13 Comex 32 silver call at the market. I’ll use today’s NY close for recordkeeping.

Long one Dec’12 Comex 2000 gold call from $54.00, the January 3, 2012 Comex close.
Long one Dec’12 Comex 1800 gold call from $59.70, the March 15, 2012 Comex close.
Long one Feb’13 Comex 1800 gold call from $44.20, the May 11, 2012 Comex close.

Long one Dec’12 Comex 40 silver call from $1.761, the January 3, 2012 Comex close.
Long one Dec’12 Comex 40 silver call from $1.635, the March 15, 2012 Comex close.
Long one Dec’12 Comex 32 silver call from $1.527, the May 11, 2012 Comex close.

Hold all these calls without any stop-out point.