The fall in gold and silver due in the main to the strengthening dollar and weakening oil price is offering a “golden” opportunity for us to see some action this day and buy the silver dips.

Sorry about the very obvious pun but we thought we should tell you that we have placed a day order for SLV Jan 2010 $17 call (SLVAQ) at $0.90 a contract.

At the time of writing the trade has been partially filled although the published bid is still at $0.95.

Readers will recall some very nice profits banked from an earlier trade we talked about, namely the SLV October $15 call so lets hope we can repeat another successful option trade in the metal.

A substantial proportion of our portfolio is held in physical gold, gold and silver ETFs and precious metal miners for the long term as you might expect but when an opportunity arises to take advantage of that excellent piece of market trading advice “buy the dips, sell the peaks” then speculate we will.

Using the power of leverage offered by call and put options means that for a limited amount of financial exposure powerful profits can be made at the same time as knowing exactly how much you might lose within your chosen time frame.

As long as you always bear in mind that options are time sensitive and can expire worthless you can keep potential losses under control without risking the much more expensive and capital intensive speculative route of buying or shorting the actual stock.

Our order has now been filled and the ask is still $0.95.

Silver may go down again tomorrow, if so we will be watching the market closely after the opening hour and if the opportunity occurs we will buy more silver calls at below our target today.

Remember that the dollar is has been heavily shorted and those shorts have to be covered. To further cloud the short term outlook the dollar is now becoming the preferred currency of the carry trade, so expect swings to the upside from time to time that seem to bear no relation to the fundamental facts.

Those facts are that the Feds have made it very obvious that they will continue to pump new money into the so called quantative easing program, interest rates are not going to be raised for a long time yet, another round of mortgage resets and other housing horrors are becoming due and, so far this seasons earnings reports have hardly set the markets on fire.

Lest we forget the most telling statistic of the nations health, at least in our opinion, is that unemployment continues to rise even if a little less quickly.

A hiccup here, a hiccup there, but gold and silver are destined to preserve wealth in the longer term as the dollar gradually continues to give up its status as the worlds´ preferred currency and the US sinks ever deeper into the sea of debt that it is creating for itself.

Gold and silver have never enjoyed more trading opportunities than are available today. We read that even those most conservative of investment bodies, the pension funds are no longer ignoring the precious metal markets and are adding gold ETFs to their holdings.

The market is no longer the preserve of the uber rich and specialist traders, any investor, however limited in capital can now get profitably involved.