Option Expiry Day Looms For Gold And Silver

August 24, 2010 | By | Reply More

This Thursday, 26th August is option expiry day. In the gold and silver markets, previous option expiries have signaled an opportunity to sophisticated precious metal traders (aka manipulators) to cash in on their activities in previous weeks.Very simply put, this means going long on spot silver, so pushing the price up above resistance which is expected to trigger computer generated and other buy stop orders.

They then sell all their long positions into the rising market and then go short, forcing the price way down as fear takes hold so allowing a tidy profit by options expiry day.

We won’t go into the political whys and wherefores that are also suspected in this scenario. We will just remind our readers that as silver is a smaller and much more volatile market than gold, and that the two metals have traditionally risen and fallen in harness, it is the short cut route to keeping gold ‘under control’.

The price action so far this week looks as if this scenario is going to play out as in the past with the silver price struggling to break out above $18.00 an oz and gold in the doldrums as a consequence.

As both metals are in a long term uptrend and the risk of a double dip recession increases, day by day buying opportunities between now and Thursday are looking good, particularly as traders return to their desks and the Indian buying season gets into full swing in September. Also China has relaxed its rules on which gold bullion dealers, banks etc., are allowed to sell to their citizens while at the same time encouraging them to invest in the yellow metal.

September looks like a stimulating month for those following gold and silver.

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