Morning Gold Fix – October 31, 2011
FMX | Connect – www.fmxconnect.com - (Reported 10/31/2011)
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 $1,747.20 per troy ounce on Friday, a loss of $.50 for the day.
December gold was down $23.1 to $1724.1 per 100 troy ounces as of 8:20 am EST this morning. The December U.S. dollar index was up 0.889 to $76.105. January platinum was down 37.2 to $1614.6 per 50 troy ounces. December silver was down 98.8 cents to 34.300.
Market Recap
Gold was largely unchanged on Friday, as markets rode out the end of a volatile week in Europe.
Gold drifted lower in the overnight session. December Gold recorded more than a $100 gain on the week and we are starting to see increased profit-taking. Today’s trading saw a moderation in futures volume and a decrease in options volatility. Options were offered, both at-the-money and in wings. Call skew also subsided on the lack of movement. One of the more interesting structures traded was the 1700/1550 1x2 Put spread, both in February and April. It was initiated by a dealer. Dealer activity has started to pick up now that futures have broken out of the channel. Volatility was in more than 1% across the term structure.
Market Prices
In the News
Bloomberg (Reported 10/31/2011)
Copper, poised for the biggest monthly advance since December, fell as investors awaited details about European governments’ revamped strategy for curbing the region’s debt crisis. Copper jumped 14 percent last week in London trading as euro-area authorities pledged to boost their rescue fund’s capacity to 1 trillion euros ($1.4 trillion) and look beyond their borders for help in doing so. A Nov. 3-4 meeting will cast the Group of 20 nations into another round of crisis resolution. Prices also slumped as the dollar strengthened. Copper Declines as Investors Await European Bailout Details
Reuters (Reported 10/31/2011)
Gold fell by more than 1 percent on Monday, following its best weekly performance in a month, after Japan's intervention in the currency market triggered a spike in the dollar, which was already benefiting from ongoing concern about the euro zone. Japan intervened unilaterally in the foreign exchange market on Monday to curb the yen's strength, sending the dollar up more than 1 percent against a basket of currencies. Gold eases as dollar gains post: BoJ intervention
Kitco (Reported 10/31/2011)
The Bank of Japan’s move Monday to devalue the yen was not a big surprise to the market place. However, the intervention was a record-large one day move by the BOJ, which reportedly sold 7 trillion yen on the FOREX market. That boosted the U.S. dollar index and put downside pressure on the Euro currency. The market place on Monday morning is more closely scrutinizing last week’s agreement among EU leaders on a bailout package for Greece and other debt-strapped EU nations and financial institutions. Comex Gold Solidly Lower as U.S. Dollar Index Rallies
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 1661.73 is needed to negate a bull trading stance. 3* Market is within proximity of this week's projected support range of 1673.70-1747.20, 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* Market is within proximity of this week's projected support range of 3215.08-3528.80, which may provide a likely zone for bottoming action or rebounds.
DEC COPPER
1* The upside target zone for this pattern is from 389.60 to 410.95 with a close under 330.57 needed to negate a bull trading stance. 2* Market is within proximity of this week's projected resistance range of 420.45-380.03, which may provide a likely zone for topping action or setbacks.
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