Morning Gold Fix – November 7, 2011
FMX | Connect – www.fmxconnect.com - (Reported 11/7/2011)
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 $1,756.10 per troy ounce on Friday, a loss of $9.00 for the day.
December gold was up $20.0 to $1776.1 per 100 troy ounces as of 8:25 am EST this morning. The December U.S. dollar index was up 0.173 to $77.335. January platinum was up 9.7 to $1639.0 per 50 troy ounces. December silver was up 41.1 cents to 34.495.
Market Recap
Gold drifted lower on Friday, as investors booked profits and reduced risk ahead of the conclusion of the G20 meeting and unforeseen weekend events. Traders also noted some positive revisions to August and September payrolls, as well as a dip in the U.S. unemployment rate to 9%.
Gold trading was largely uneventful on Friday. ATM calls and straddles were offered. Not only were volumes low, gold traded only a $16.70 range. Volatility was down across the term structure, with December taking the worst of it, coming in 2.7%. One of the more interesting trades of the day was the purchase of the April 1800/1975/2300 Call Butterfly. This is a sophisticated directionally play, but still carries very large risks for investors. For one, a rapid move higher can make this position expensive to hold even if it finishes as a winner, because the buyer is short the volatility of the 1975 Calls.
Market Prices
In the News
Bloomberg (Reported 11/7/2011)
Gold climbed to a six-week high in London as concerns about Europe’s debt crisis spurred demand for the metal as a protection of wealth. Italian Prime Minister Silvio Berlusconi’s allies pressured him to step aside after contagion from the region’s sovereign debt crisis pushed Italy’s borrowing costs to euro-era records. That overshadowed Greek Prime Minister George Papandreou’s agreement to step down, sending European equities lower. Gold Climbs to Six-Week High as Greek, Italian Risk Stokes Haven Demand
Reuters (Reported 11/7/2011)
Gold rose more than 1 percent on Monday as investors piled into the traditional safe haven asset as Europe's debt crisis intensified on concerns about political instability in Italy and Greece. Worries about Italy, where Prime Minister Silvio Berlusconi is battling party rebels threatening to bring down his government, have overshadowed a coalition deal in Greece to help secure its latest bailout package. Gold rises as Europe debt crisis intensifies
Kitco (Reported 11/7/2011)
Safe-haven investor demand is again featured to start the trading week amid weekend developments on the European Union financial and sovereign debt crisis front. Just as it appears Greece will comply with its EU debt plan constricts—after a weekend shuffle in its government—now Italy comes to the front burner as its bond yields are soaring Monday and rumors of a leadership change in that nation abound. Traders and investors worldwide are wondering what will be next, but most reckon whatever it is, it won’t be positive for the market place. This heightened uncertainty remains a bullish factor for the precious metals markets. Comex Gold Higher On Safe-Haven Demand As Italy Now In The EU Debt Crisis Spotlight
Technical Overview DEC GOLD
The market is short term and trade is lined up for a run to 177520* weekly resistance. A close over 177520* calls for a push into previous downturn levels associated with the 1789-1808 area. If rallies are blunted against 177520*, be prepared for a near term slip into congestion at 1750-1725. Only a close under 171490* marks a reversing turn to start a corrective phase with selloffs back to 1680-1670.
DEC SILVER
The market is remains in a short term bull upturn. A surge back over last week’s high or close over 3515 should spark a bull leg reaching for 3700. Trade may hang in additional sideways flagging congestion for 1-2 days. View sideways trade as a staging level to attempt further rallies. A close under 3305 could drive selling to again test key 32135* support, but 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. Last week’s sideways days hint for a platform to push off for rallies. A close over 37640 will spark a run to 385-395. A close under 34635 signals for harder corrections, but a close under 33055* is needed to mark a turn back to sustained bearish trade.
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