Morning Gold Fix – October 14, 2011
FMX | Connect – www.fmxconnect.com - (Reported 10/14/2011)
The following is a summary of yesterday’s US gold activity and a recap of Asia & European markets overnight. It includes our proprietary options analytics and news stories from industry professionals.
Summary
December Gold settled at $1,668.50 per troy ounce on Thursday, a loss of $14.10 for the day.
December gold was up $14.0 to $1682.5 per 100 troy ounces as of 8:30 am EST this morning. The Dec U.S. dollar index was down 0.124 to $77.160. January platinum was up 22.0 to $1554.4 per 50 troy ounces. Dec silver was up 74.8 cents to 32.415.
Market Recap
Gold slumped on Thursday, taking its cue from tepid economic data and a stronger dollar. While the recent trend has been higher, speculative interest has been somewhat lackluster overall, and call buying was sparse today. Volatility has been offered during the rally, and may encourage bulls to sell puts rather than purchase calls if they are taking a position in options. Opportunities abound for the sophisticated hedger. The majority of today’s option trades were in November and December, and the 45-30 delta calls remain well offered. A sizeable number of the December 1200 puts were sold, but the trend in fences across the term structure was gently toward the puts. This rally is showing signs of fatigue, and trading this closely to the 20-day moving average, gold is also well positioned for a break-out.
Market Prices
In the News
Bloomberg (Reported 10/14/2011)
Gold’s biggest slump in three years means traders and analysts are now the most bullish in three months, speculating that Europe’s debt crisis, slowing growth and a bear market in equities will drive demand for bullion. Twenty-two of 25 people surveyed by Bloomberg expect the metal to rise next week, the highest proportion since mid-July. Prices rebounded 9.2 percent since reaching a two-month low at the end of September and investors are adding to their holdings in gold-backed exchange-traded products for the first time in a month, according to data compiled by Bloomberg. Traders also expect gains in copper, sugar, corn and soybeans, surveys show. Gold Traders Most Bullish Since July After Plunge: Commodities
Reuters (Reported 10/14/2011)
Gold rose on Friday, on track to post its biggest weekly gain in more than a month, with caution prevailing ahead of a G20 meeting whose agenda will be dominated by the euro zone debt crisis and steps to tackle contagion. Spot gold rose 0.4 percent to $1,671.99 an ounce at 1139 GMT, from $1,666.20 late in New York on Thursday. Gold gains, eyes biggest weekly rise since September
Kitco (Reported 10/14/2011)
Gold is seeing buying support coming from higher crude oil prices Friday morning. Crude oil bulls have some upside technical momentum to suggest prices can trade sideways to higher in the near term. That is a bullish scenario for the precious metals. Meantime, the U.S. dollar index is trading near steady Friday morning. The dollar index bulls have faded recently and near-term chart damage has been inflicted to suggest the index has put in a near-term market top. This is a significantly bullish development for the precious metals market. Comex Gold Firmer as Trading Remains Choppy; Bull Still Have Technical Advantage
Technical Overview
DEC GOLD
Overall the market is bearish. This week’s rising congestion calls for climbing trade action to reach over 1700+. A close over 169180* will help boost rallies, but be alert for a setback from 171590*. A close over 171590* is needed for a lasting bottom. A slip back through 1654 is negative, but a close under 163370* is needed to drive trade into secondary declines under 1600-. A close under 159570* is bearish.
DEC SILVER
The market is bearish and may roll into secondary selloffs. A drop under Monday’s low cautions for dips. A close under 30215* renews bear forces and could drive a secondary break to test 28085* monthly support. Current sideways higher trade still suggests near term positive action that may produce recovery rallies. A pop over 33585 could boost rallies, possibly sending a run to test 3519*.
DEC COPPER
The market is bearish. A close under 31530* should renew selloffs to reach under the recent low. Last week’s surge higher is still calling for near term rallies and may stretch for a test of 34635* resistance. A close over 34635* is needed to start a bottoming turn and sustained corrections. A rejection from 34635* calls for a slip back to defensive congestion along the low 320’s.
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