February 24, 2010 – In spite of efforts by options traders to get below call levels made at certain key points, gold and silver prices managed to resist the prevailing pressure and hold solid levels yesterday. The Commodity Exchange gold closed the day at $1,102.70 and silver at $15.89 per ounce. Investors will continue to watch prices for confirmation of this theory, especially if prices start rising again.
Franklin Sanders of The Moneychanger said of traders who try to manipulate prices, “(they) sell options so often manage to drive down silver and gold prices around option expiry (today) so they don’t have to pay off on all those calls they’ve sold. Turns out they didn’t quite make it today, as there was a hunk of $1,100 calls and on COMEX the gold price closed at $1,102.70, down $9.90. Low was $1,099. There were a bunch of silver $16.00 calls, too, and the silver price closed today at $15.888, down 33.4 cents and leaving those $16.00 calls high, dry, and worthless. We will know that this explains recent price movements if silver and gold prices proceed to rise from here, which I suspect they will.”
While there can be a dark side to trading, with seemingly sinister forces attempting to manipulate prices, manipulation can’t affect much more than a moment of time. As Sanders mentions, “Gold’s performance in the face of this monthly storm was awfully stout, since it resisted closing below $1,100. Silver’s close today, too, was above its previous low. The most any manipulation can effect is a short interruption of the trend.”
For gold and silver investors, there shouldn’t be a fear of manipulators, since prices tend to resist such pressures to follow supply and demand. With both metals holding firm, now appears to be an excellent time to invest.
Senior Staff Writer – GoldSilver.org