THE WINDY CITY TRADER
P.O. Box 1673, Chicago, Illinois
800-443-2360(November 30, 1999) METALS: Gold continues to show signs that a new technical base is forming near $290. Recent rallies back above $300 would tend to confirm this. Fundamentally, gold appears to have 2 strong factors in it's favor now. One is the thought of inflation with each new positive economic report which is released. The other side of the economy is covered as well. Technical patterns suggest a good possibility of a strong sell-off in U.S. stocks. At this point, that occurrence could begin a hard, asset driven, flight to quality rally which could easily push futures to recent highs near $330. A futures contract (risking to $284) on an April 320 call could prove valuable during the next 2 months. Silver appears to be the little brother to gold at this point tagging along everywhere it goes. The recent rally for December futures was stopped in it's tracks at the $5.28 resistance point. A rally in gold could spark a drive past recent resistance to $5.50-$5.62.
Stephen Connell and William Frejlich
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