Morning Gold Fix – November 8, 2011
FMX | Connect – www.fmxconnect.com - (Reported 11/8/2011)
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 $1,791.10 per troy ounce on Monday, a gain of $35.00 for the day.
December gold was down $0.3 to $1790.8 per 100 troy ounces as of 8:25 am EST this morning. The December U.S. dollar index was down 0.146 to $76.995. January platinum was up 4.5 to $1662.5 per 50 troy ounces. December silver was down 6.8 cents to 34.760.
Market Recap
Gold stretched higher on Monday, trailing just below $1,800 an ounce as we approach 5:00. Instability in Europe contributed to the metal’s gains, with Italian Prime Minister Silvio Berlusconi coming under fire amidst speculation that Italy could go the way of Greece and default without assistance from the ECB.
Volatility opened higher, rebounding from some of the selling pressure that is typical going into the weekend. Once again, speculative buying drove prices higher, both in futures and options. While the majority of the buying is limited to the front three months, longer-term investors are staying involved through December 2012. At-the-money options and calls both finished higher. Volatility was up nearly 1 percent on a tilt across the term structure.
Market Prices
In the News
Bloomberg (Reported 11/8/2011)
Gold may gain for a second day in New York as concerns about Europe’s debt crisis spur demand for the metal as a protection of wealth. Italian Prime Minister Silvio Berlusconi faces a budget vote amid pressure to quit and a surge in borrowing costs, stoking concern the region’s debt crisis is spreading. Gold yesterday reached the highest level in more than six weeks and holdings in exchange-traded products backed by bullion rose by the most since August. Gold May Advance as Concern About European Crisis Stokes Investor Demand
Reuters (Reported 11/8/2011)
Gold prices hovered above $1,790 on Tuesday, after soaring more than 2 percent in the previous session, supported by safe haven demand as Italy took center stage in the euro zone debt crisis. Italian government bond yields soared to near 15-year highs, putting the euro zone's third largest economy front and center of the region's debt crisis, despite efforts by policymakers scrambling to stem growing contagion. Gold steady on mounting Italy debt worry
Kitco (Reported 11/8/2011)
Underlying safe-haven investor demand is still limiting selling interest in gold Tuesday morning, but the market is pausing after recent strong gains that saw prices hit a fresh six-week high of $1,799.90 an ounce in late trading Monday. Developments on the European Union financial and sovereign debt crisis front include an Italian government vote on its budget. This vote, scheduled for later Tuesday, will help the market place determine if Italian leader Berlusconi can remain in power. Italian bond yields are at Euro-era record highs this week, which is a bad sign for prospects of the third-largest EU economy pulling itself out of the debt quagmire in which it’s presently stuck. Traders and investors worldwide are pondering what will be next in the EU debt crisis saga, but most believe it won’t be positive for the market place. This heightened uncertainty remains a bullish underlying factor for the precious metals markets, and especially gold. Comex Gold Trades Near Steady; Fresh News Regarding EU Debt Crisis Awaited
Technical Overview DEC GOLD
The market is bullish and yesterday’s surge higher calls for rallies against previous downturn levels associated with the 1789-1808 area. Yesterday’s strong close implies continued rallies today. A close over 1803 is bullish and could extend out rallies to 184450. If rallies are blunted against 1803+, be prepared for a pullback into congestion around 1750+/-. Only a close under 172370* marks a reversing turn to start a corrective phase.
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.
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