Morning Gold Fix – May 25, 2011
FMX | Connect – www.fmxconnect.com - (Reported 5/25/2011)
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
June Gold settled at $1523.30 per troy ounce on Tuesday, a gain of $7.90 for the day. Futures rallied and traders squared up their position ahead of the June options expiry.
June gold was up $2.3 to $1526.6 per 100 troy ounces as of 8:30 am EST this morning. The June U.S. dollar index was up 0.097 to $76.120. Jul platinum was up $9.5 to $1772.0 per 50 troy ounces. Jul silver was up 100.7 cents to 37.135.
Market Commentary
After trading as high as 1529 overnight gold opened closer to 1525. Activity was light to moderate the day before June expiration with the majority of trading occurring in June and July. Market participants squared up positions in anticipation and did not have a whole lot to do otherwise. Volatility was bid during the rally but returned to near unchanged after futures stabilized. July saw some put selling and a buyer of the 1550 Call during this time. The 1600 Call buyer in October and December was absent but the back months stayed firm for the most part. Skew was slightly offered towards the end of the day as market makers became increasingly confident they would not be run over by a gargantuan order. Be sure to check back tomorrow morning for our Pin Risk report.
Market Prices
Technical Analysis (GRI)
JUN GOLD
Overall the market remains in a short term peaking turnover. However, the near term thrust up from tight congestion, alerts for secondary rallies. Look for attempts to continue climbing rallies and stretch to a test of 153350* resistance. A close over 153350* should launch secondary drives against the last swing high. Stalled action against 153350* hints for a reversal. A close under 149320* will likely renew selloffs to 145690*.
JUL SILVER
Overall the market remains bearish and still calls for selloffs to attack the last swing low and 3285 target. A close under 3397* will renew negative trade. A close under 3285 is negative and could add a wash to 3100-. However, corrective rallies have push up against 3673* resistance. A close over 3673* will turn trade to a recovery and motivate a sustained climb back up near 3900.
JUL COPPER
Last week’s rebounds were rejected by 41195* resistance. A close over 41195* or thrust over 416 confirms a reversal and should fuel a retracement climb to 423-425. The back off from 41195* still hints
for a bear flag downturn and secondary selloffs against the recent swing low. Expect further selling pressures to test 39645*. A close under 39645* confirms a drop to 389-38535.
In the News
Bloomberg (Reported 5/25/2011)
Gold may gain for a fourth day in New York as concern about Europe’s debt crisis spurs demand for a protection of wealth. Christian Noyer, a Governing Council member of the European Central Bank, yesterday ruled out a restructuring of Greece’s debt, calling it a “horror story” that would leave the nation shut out of financing for years. Gold climbed to records priced in euros and British pounds today as policy makers disagree over how to solve Greece’s fiscal woes. Gold May Gain for Fourth Day as European Debt-Crisis Concern Stokes Demand
Reuters (Reported 5/25/2011)
Gold hit a three-week high on Wednesday, boosted by fears about the debt crisis in euro zone countries such as Greece while the resulting stronger dollar against the euro undermined sentiment. Spot gold hit $1,528.40 a troy ounce, its highest since May 4. It was bid at $1,526.79 an ounce at 1120 GMT from $1,525.75 an ounce late in New York on Tuesday. Gold hits 3-week high on euro zone debt jitters
NSFutures (Reported 5/25/2011)
Apparently gold prices continue to draft off residual concerns over the Euro zone debt problem, but part of the flow into gold off that issue is being tempered by lingering favor toward the US Dollar. News of a slight decline in German consumer confidence overnight probably adds to the concern for the Euro zone, but that news has also served to lift the Dollar relative to the Euro. World stock markets traded lower overnight, led by weakness in China and Japan. The weakness in Europe, with a great deal of focus on possible solutions to the Greek debt situation. Daily Metals Commentary.
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