Morning Gold Fix – October 21, 2011
FMX | Connect – www.fmxconnect.com - (Reported 10/21/2011)
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 $1,612.90 per troy ounce, a loss of $34.10 for the day.
December gold was up $27.10 to $1640.00 per 100 troy ounces as of 8:25 am EST this morning. The December U.S. dollar index was down 0.216 to $77.020. January platinum was up 17.60 to $1508.80 per 50 troy ounces. December silver was up 82.4 cents to 31.11.
Market Recap
Gold trended lower on Thursday, trading to the low 1600s by mid-morning. The metal’s reputation as a safe haven asset has deteriorated in recent months, leading investors to divert more of their money to the Dollar against recent developments in Europe. Volatility heightened on the sell-off, and market participants clamored for puts. December puts and put spreads were bid aggressively, in one instance, packaged against February puts. Specifically, option shorts purchased the December 1450 put and sold the February 1450 put in ratio form, mitigating some of their immediate downside risk. November and December calls were also sold cheaply, with equidistant fences well bid for the puts from a historical perspective. November options expire next week.
Market Prices
In the News
Bloomberg (Reported 10/21/2011)
Gold may gain for the first time in five days, cutting a weekly loss, as a drop to a two-week low spurs investors to buy the metal as a protection of wealth.
Gold slipped to $1,603.97 an ounce yesterday, the lowest since Oct. 5, and is heading for the first weekly drop in three. Prices have dropped 15 percent since touching a record early last month. Gold May Climb as Retreat to a Two-Week Low Stokes Demand From Investors
Reuters (Reported 10/21/2011)
Gold rose on Friday but was still set for its largest one-week fall in a month, as growing uncertainty among investors over the ability of European leaders to deliver a comprehensive solution to the debt crisis kept the price near two-week lows. Disagreement between Germany and France, the biggest contributors to the euro zone bailout mechanism, over how to structure the fund to effectively stem the spread of the crisis has prompted investors to attach a diminishing chance of a resolution any time soon. Gold rises, euro worries restrict gains
Kitco (Reported 10/21/2011)
Comex December gold futures are trading solidly higher Friday morning, on a corrective bounce from selling pressure seen Thursday and amid generally stronger raw commodity market prices on the day. A weaker U.S. dollar index Friday morning is also supporting fresh buying interest in the precious metals. Comex Gold Solidly Higher, Supported by Firmer Commodity Markets, Weaker U.S. Dollar Index
Technical Overview
DEC GOLD
Market is challenging a previous daily swing low and may attempt a breakout. Closing beyond 1596.60 calls for continuation selloffs. A failure around 1596.60 cautions for a reactionary rebound. The downside objectives for this formation range from 1598.30 to 1589.50 with a close over 1643.14 needed to negate a bear trading stance.
DEC SILVER
The downside objectives for this formation range from 2984.50 to 2859.00 with a close over 3130.39 needed to negate a bear trading stance. Market is within proximity of this week's projected resistance range of 3249.60- 3078.30, which may provide a likely zone for topping action or setbacks.
DEC COPPER
Market is challenging a previous daily swing low and may attempt a breakout. Closing beyond 299.40 calls for continuation selloffs. A failure around 299.40 cautions for a reactionary rebound. Market is showing a marked acceleration in the trend. However, be on guard for a correction today against the trend to consolidate the loss. Trend should remain intact barring a close above 319.62 or full retracement of yesterday's range at 323.5.
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