Take a look at the included weekly chart on gold.  As mentioned in my special report a few days ago, gold has a history of spiking sharply when all the ingredients come together and gets into a frenzy.  There is a risk of that happening now.  Given the size of the breakout, there is no reason why gold can’t go well past my target of $1350 in the next few months.  Because of the danger that could happen with our ration call spreads, I recommend buying 4 February Gold ($1500 strike) call options at around $2.00 per ounce each.  That would be a gross cost of $200 times four or $800.  Just in case gold does something like it did between November 1979 and late January 1980, we will have a lot of protection and have a chance to make some money as well.  As I mentioned in the other day’s report, gold doubled in price between November 1979 and late January 1980.  This time may be different, but spending $800 on this insurance will put us into a stronger position.

 David Hall

 The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options can be substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.

 This newsletter is not intended for dissemination to the public without prior approval from David Hall.