Morning Gold Fix – November 1, 2011
FMX | Connect – www.fmxconnect.com - (Reported 11/1/2011)
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 $1,725.20 per troy ounce on Monday, a loss of $22.00 for the day.
December gold was down $31.5 to $1693.7 per 100 troy ounces as of 8:35 am EST this morning. The December U.S. dollar index was up 1.294 to $77.600. January platinum was down 40.7 to $1566.9 per 50 troy ounces. December silver was down 158.4 cents to 32.770.
Market Recap
Gold opened lower, caught in the crossfire of a Japanese yen intervention that sent futures tumbling and investors back to buying the dollar. U.S. Treasuries were also higher.
Volatility was bid in the wake of a night that saw Gold trade 1705.50 on the lows. Some traders saw this as a dip to buy, and other market participants saw this as a sign that the sell-off will continue. One bearish speculator expressed his opinion through the purchase of the December 1650/1600 Put spread. Activity in the back months was mild, and both futures and options volumes were down from last week’s peak. Expect the market to be keenly attuned to the FOMC meeting starting tomorrow. Volatility finished approximately .75% higher on the day.
Market Prices
In the News
Bloomberg (Reported 11/1/2011)
Stocks and U.S. index futures declined, while a jump in German bunds sent yields down the most since March 2009 after Greek Prime Minister George Papandreou pledged to hold a referendum on Europe’s bailout plan. Commodities slid as China’s manufacturing growth cooled. The MSCI All-Country World Index retreated 2.1 percent at 8:15 a.m. in New York, with gauges in Germany and Italy sliding more than 5 percent. Standard & Poor’s 500 Index futures lost 2.4 percent. German 10-year yields fell 20 basis points to 1.82 percent. Italian bonds dropped, pushing the 10-year yield to as much as 441 basis points above benchmark bunds, a euro-era record. Stocks, U.S. Futures Drop on Greek Vote Plan; Bunds Jump, Metals, Oil Fall
Reuters (Reported 11/1/2011)
Gold buckled under the pressure of a stronger dollar on Tuesday after the Greek prime minister shocked financial markets by calling a referendum on an agreed bailout package and the collapse of failed broker MF Global dented commodities. Prime Minister George Papandreou's surprise decision to call a popular vote on the bailout dented most assets priced in euros to the benefit of the U.S. dollar. Gold eases as Greek vote, MF Global rattle markets
Kitco (Reported 11/1/2011)
The U.S. dollar index soared again overnight, while the Euro currency, stock and commodity markets slumped on news Greece says it will hold a referendum on whether to implement last week’s EU bailout package for that beleaguered nation. Given the Greek public’s overt displeasure for austerity measures, most believe any referendum would not support a bailout package. This has once again put the EU debt crisis back on the front burner of the market place, and in a bearish fashion for most markets, including gold and silver. The precious metals markets have recently chosen to follow most other commodity markets lower during the “risk off” trading days. Comex Gold Sharply Lower as U.S. Dollar Index Rallies Amid "Risk-Off" Environment
Technical Overview DEC GOLD
The thrust higher last week signals a short term upturn, extending the larger bear flagging congestion of the past month. Trade is poised for further rally attempts and a close over 1750-1754 signals for a run to 177520* weekly resistance. Be prepared for near term congestion to test for support just under 1700- the next 1-2 days, but only a close under 166170* marks a reversing turn back to bearish trade.
DEC SILVER
The market is showing a short term bull upturn from congestion of previous weeks and signals for a retracement of the September break, reaching for 3700. A close over Monday’s high or pop over Friday’s high could spark advances. Be ready for flagging consolidation for a few days, but trade should fight to hold back around 3300+/-. Only a close under 32135* marks a turn back to negative trade.
DEC COPPER
The market is showing a head and shoulders bottoming upturn and targets additional bull moves to 390-385. Be alert for weekly resistance to top the drive up against 395. We may see near term flagging dips to consolidate gains and test for support in the mid 340’s. A bounce from the low 340’s is bullish. A close under 33055* is needed to mark a turn back to bearish trade.
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