Morning Gold Fix – October 28, 2011
FMX | Connect – www.fmxconnect.com - (Reported 10/28/2011)
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 $1,747.70 per troy ounce on Thursday, a gain of $24.20 for the day.
December gold was down $9.9 to $1737.8 per 100 troy ounces as of 8:45 am EST this morning. The December U.S. dollar index was up 0.209 to $75.220. January platinum was down 9.8 to $1631.6 per 50 troy ounces. December silver was down 23.2 cents to 34.880.
Market Recap
Gold extended its gains on Thursday as part of a broader relief rally. Collectively, markets breathed a sigh of relief at the apparent progress out of Europe and as U.S. 3rd Quarter GDP grew by 2.5%. As part of the deal, the EU and IMF reportedly negotiated a 50 percent write-off with bankers on Greek debt; this number was chosen with the intention of reducing the Greek debt-to-GDP ratio to 120% by 2020 and staving off a default. Even viewed skeptically, some investors may take a measure of relief at the new levels of intervention the EU is prepared to take to stabilize the region.
December Gold rallied on Thursday, pushing to a new monthly high. Options activity was dynamic, with fresh buying continuing to come into the market. In particular, the December 1800 Call and April 1800/2000 Call Spread received a lot of attention. Volatility was offered on the higher move, and moved sharply lower on the temporary resolution out of Europe. On the day, call skew was higher and puts were offered.
Market Prices
In the News
Bloomberg (Reported 10/28/2011)
Gold declined for the first time in six sessions in New York as the biggest weekly gain since August spurred some investors to sell the metal. Silver headed for the largest weekly advance since September 2008. Gold reached a five-week high today after European leaders agreed on new measures to tackle the region’s debt crisis yesterday. Federal Reserve policy makers, who meet next week, and the Obama administration are considering additional steps to boost the U.S. economy and cut unemployment. Thailand, Bolivia, Kazakhstan and Tajikistan added a combined 26.7 metric tons of gold to reserves in September. Gold Declines as Best Week Since August Spurs Investor Sales
Reuters (Reported 10/28/2011)
Newmont Mining Corp (NEM.N), the world's second-largest gold producer, beat Wall Street's third-quarter earnings estimates, benefiting from a 39 percent jump in its average selling price for the precious metal. The company also said it was sticking to its full-year 2011 production and cost targets, although lower output in Nevada and higher costs at its Boddington mine in Australia could affect results. Gold miner Newmont's profit beats Wall St view
Kitco (Reported 10/28/2011)
The market place on Friday morning has a bit of a hangover following the euphoria expressed Thursday, in the wake of the 11th-hour agreement late Wednesday among EU leaders on a bailout package for Greece and other debt-strapped EU nations and financial institutions. World stock and commodity markets are pausing Friday morning after solid gains posted Thursday. Traders Friday are once again realizing the EU debt mess has not just disappeared and the matter will likely re-emerge as a major market place concern at some point down the road. Comex Gold Trades Weaker On Corrective, Profit-Taking Pullback
Technical Overview DEC GOLD
1* Historical analysis of this minor swing pattern shows a definite bullish bias for today's action, with the odds of this market taking out yesterday's high in the next two trading sessions around 71 percent. 2* We have currently achieved the initial swing objective of 1729.10, and could penetrate the top end of the target zone (1788.90) shortly. A close under 1660.70 is needed to negate a bull trading stance. 3* Market is within proximity of this week's projected support range of 1674.20-1747.70, which may provide a likely zone for bottoming action or rebounds.
DEC SILVER
1* Historical analysis of this minor swing pattern shows a definite bullish bias for today's action, with the odds of this market taking out yesterday's high in the next two trading sessions around 71 percent. 2* We have currently achieved the initial swing objective of 3436.50, and could penetrate the top end of the target zone (3541.50) shortly. A close under 3201.31 is needed to negate a bull trading stance. 3* Market is within proximity of this week's projected resistance range of 3786.90-3661.98, which may provide a likely zone for topping action or setbacks.
DEC COPPER
1* The upside target zone for this pattern is from 389.60 to 406.68 with a close under 329.48 needed to negate a bull trading stance. 2* Market is within proximity of this week's projected resistance range of 405.70-378.28, which may provide a likely zone for topping action or setbacks.
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