Gold Futures close up $10!

Friday marked a major day for Gold bulls-the Futures for the bullion gained $10 in a single day. That is a gain of about two per cent, and marks the existence of strong support at this level. Gold stocks, as measured by ASA, closed up about 2.5%.

However, the Gold market looks extended, and gains from here will be slower. The market has run up quite a bit over the past year, and needs to consolidate at these levels. ASA is still trading significantly above it's 200 day moving average. See chart here.

For those of you who dabble in options, this is a good chance to get in some gold stocks or ASA and sell calls. Collect the premiums. The market is volatile, and premiums are very juicy.

ASA options have very high spreads, so watch out! I have written to CBOE to see why the spreads are so high-will let you know if and when I hear back from them.

Sanjay John G.