Morning Gold Fix – December 2, 2011

FMX | Connect – www.fmxconnect.com - (Reported 12/2/2011)

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.

December gold was up $22.9 to $1758.2 per 100 troy ounces as of 8:20 am EST this morning. The December U.S. dollar index was down 0.273 to $78.160. January platinum was up $13.3 to $1570.5 per 50 troy ounces. December silver was up 78.5 cents to $33.480.

Market Recap

February Gold moved modestly lower on Thursday, failing to maintain its intraday high of 1758. Volumes were down slightly after a robust start to the week, and traders spent most of the day watching the metal trade between 1745 and 1755. The net result was volatility being offered and it concluded the day down between .5 and 1% across the term structure. January and February calls between 1750 and 1850 strikes remain some of the most popular contracts on the market, and have initiated a movement in fences towards the Call over the course of the week. That isn’t to say puts were left out in the cold: there was a large buyer of the December 2012 1200/1000 1x2 Put spread, which is a long way off in both expiration and price.

Market Prices 

In the News

Bloomberg (Reported 12/2/2011)

Gold may drop as a better-than- expected U.S. manufacturing report outweighed concern that Europe’s debt crisis will slow global growth, curbing demand for a haven. Palladium headed for its biggest weekly gain in a year. Bullion for immediate-delivery fell as much as 0.4 percent to $1,738.05 an ounce and traded little changed at $1,743.28 at 3:22 p.m. in Singapore. Gold is set for a 3.6 percent increase this week, the best performance since Oct. 28. Palladium increased 0.9 percent to $636.75 an ounce, poised for a 12 percent five-day gain, the most since December last year. Gold May Decline on U.S. Economic Optimism, Palladium Advances


Reuters (Reported 12/2/2011)

Spot gold edged up on Friday as investors sought to hedge against inflation on the view that the European Central Bank will be forced sooner or later to boost liquidity on a massive scale in a bid to alleviate Europe's debt crisis. Gains were limited, however, ahead of a key U.S. employment report later today. There was widespread investor expectation that a European summit next week could finally yield a concrete solution to the euro zone debt crisis, with Germany and France working hard to reach a compromise deal. Gold up, EU plan to fight debt crisis expected


Kitco   (Reported 12/2/2011)

Reports the Bank of Korea bought 15 tons of gold last month is a bullish factor for gold Friday morning. Many believe South Korea’s central bank will buy still more gold in the future. Traders are awaiting Friday morning’s key U.S. employment report, which could be a market mover if the key non-farm payrolls figure comes in well above or below expectations. The average of forecasts for the non-farm payrolls figure is for up 125,000 in November. The unemployment rate is expected to be unchanged from last month, at 9%. Comex Gold Solidly Higher on Bullish Outside Markets, Central Bank Buying

The market is still in a bear trend, but Wednesday’s surge higher places trade against key 175460* resistance. Posting a close over 175460* signals rallies to the recent downturn gap at 1770-1777 and chance to test against the last swing high. If trade backs off from 175460*, then expect sideways congestion in the upper half of Wednesday’s rally. A close under 170170* is needed to recapture bear trend forces.

MAR SILVER

The market remains in the negative turnover, but closes under 3179* or drop below 30945 are needed to release a slide to 2981*. Wednesday’s outside bull reversal signals for rebounding action for a test of 3379* resistance. A close over 3379* signals a bull turn that should spark rallies to attack the last 3568 swing high. Any congestion inside the upper half of Wednesday’s range over 32025+ should provide a staging level to attempt further rallies.

MAR COPPER

Wednesday’s sharp rally signals a bull upturn out of the past month long selloff and targets rallies to attack the last swing high. A close over 37680 could spark a larger bull wave to 390+. Be prepared for modest corrective congestion inside the upper half of Wednesday’s rally, but stable action over 34310* keeps trade into a strong alignment for rallies. A close under 33775* is negative.

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