Morning Gold Fix – September 20, 2010

FMX | Connect – www.fmxconnect.com - (Reported 9/20/2010)

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.

Bollinger or Buster

Kudos to to Guest poster Vince Lanci on his Bollinger Band break out call. To continue in that vein, the weekly B-Band is hitting up right now.

The trade is to either

· Buy it here with a stop below last week’s settlement or the4 20 day moving average, depending on your risk tolerance OR

· But straddles and let your Gamma run until we get a settlement BELOW the top line of the weekly Bollinger Band.

With last week’s events: the abrupt policy move to weaken the Yen, and the fresh sovereign debt risk in Ireland we can say 3 things

1- Regarding the Yen- there are few if any sacred currency cows left and the race to the bottom of devalued currencies has begun globally (Swiss Franc = proxy for Gold)

2- China’s reactions- this is how trade wars and worse begin. Unilateral action and reaction.

3- Regarding Ireland- a main difference in our opinion between them and Greece, Portugal and the other Mediterranean countries is GOLD. Ireland doesn’t have as much Gold to lease sell or otherwise use to shore up their balance sheet. Not much hope there, except for more Weimer Marks… er… Euros to be printed.

Many people have begun to characterize gold as competing for safety dollars. We prefer to see it as less fiat currencies are able to compete with Gold. They are dropping like flies. For Market Prices Click Here

Good Luck today.

Summary

October Gold settled at $1275.10 per 100 troy ounces on Friday, a net gain of of $3.70 for the day. 

October gold was up $5.10 to $1281 per 100 troy ounces as of 7:35 AM EST, this morning. The December U.S. dollar index was down .231 to 81.41. October platinum was up $8.30 to $1630.20 per 50 troy ounces. December silver was up 11.9 cents to $20.94.

Gold Options Report

FMX Morning Newswire

Bloomberg (Reported 9/20/2010)

“Gold rose to a record for a third day in London and New York as a weaker dollar and concern that the recovery may be faltering boosted demand for the metal as a protection of wealth.

The dollar weakened to near a five-week low against the euro before a report today that may show the U.S. housing market remains weak and on speculation the Federal Reserve will say at a meeting tomorrow it’s considering further measures to keep borrowing costs low. Holdings in gold-backed exchange-traded products reached a record Sept. 17. Silver traded 2.3 percent below $21.355 an ounce, the highest price since 1980.” Gold Climbs to Record on Weaker Dollar, Global Recovery Concern

NS Futures (Reported 9/20/2010)

“At least in the early going today, the December gold contract managed yet another new high for the move and in the process another new contract high. The gold market seemed to garner some support from the recent debt concerns arising in Ireland.

While equity markets were mixed overnight, stock markets in Europe are generally higher this morning. U.S. stock indices have posted moderate gains during the early Monday trade.” Daily Metals Commentary 

Reuters (Reported 9/20/2010)

“Gold hit a record high for the fourth day in a row on Monday, boosted by growing expectations for U.S. interest rates to remain exceptionally low as the economy struggles, while silver came in range of 30-year peaks.

Data on Friday showed Americans were at their most pessimistic in over a year this month, as growing fears about job security and finances undermined U.S. consumer sentiment and painted a muted picture of price pressures.” Gold hits record as investors seek safety

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