Morning Gold Fix – October 10, 2011
FMX | Connect – www.fmxconnect.com - (Reported 10/10/2011)
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 $1,635.80 per troy ounce on Friday, a loss of $17.40 for the day.
December gold was up $25.7 to $1661.5 per 100 troy ounces as of 7:55 am EST this morning. The Dec U.S. dollar index was down 0.869 to $78.280. January platinum was up 26.2 to $1519.5 per 50 troy ounces. Dec silver was up 109.2 cents to 32.085.
Market Recap
Today’s markets saw improved U.S. September payrolls and Fitch downgrade Spain and Italy, yet gold was nonplussed. After drifting close to the top of its trading range overnight Gold sold off during the day, finishing at a loss of just over $17.
Range-bound trading makes for calmer markets, and volatility continued to trend lower on Friday, led by November and December. Back-month volatility remains resilient in comparison, and providers a strong indication of just how large the divide is between short-term and long-term expectation for the metal. While options were sold on the day, speculative buying interest helped call skew outperform the puts. Turning to December options, one will notice they have less than 6 weeks until expiration. We expect some intense speculative liquidation if a major move fails to materialize in the near future.
Market Prices
In the News
Bloomberg (Reported 10/10/2011)
Most Hong Kong stocks fell as Chinese developers dropped on concern tight monetary policy and increased supply will lead to lower property prices and oil producers slid after China cut fuel prices. Agile Property Holdings Ltd. (3383), which develops land in the southern province of Guangdong, tumbled 8.8 percent. China Petroleum & Chemical Corp. (600028), a refiner known as Sinopec, fell 4.4 percent after China cut fuel prices for the first time this year and its parent agreed to buy a Canadian oil explorer. Aluminum Corp. of China Ltd., the nation’s biggest producer of the metal by market value, dropped 3.5 percent after UBS AG resumed its rating on the stock at “sell” from its previous “buy” rating. Most Hong Kong Stocks Fall as China Developers, Sinopec Decline
Reuters (Reported 10/10/2011)
Gold rose more than 1 percent on Monday as the dollar fell versus the euro after France and Germany pledged to strike a proposal to recapitalize euro zone banks, while traders remained cautious ahead of further details of the plan. German Chancellor Angela Merkel and French President Nicolas Sarkozy said after talks on Sunday that they aimed to come up with a sustainable answer for Greece's debt problems and agree how to recapitalize European banks. Gold rises 1 percent after EU banks pledge
Technical Overview
DEC GOLD
Overall the market is bearish and last Tuesday’s outside bear day still suggests a top end of near term retracements. A close under 1591* will send selloffs to test 1560/154850 support for a larger downturn. Be ready for additional sideways corrections. However, still expect residual bear forces to blunt retracements under 168150. A pop over 168150 is needed to boost recovery moves to 169180* and 171590*.
DEC SILVER
The market is bearish and may again slip to test 28085* monthly support. A close 3012* is needed to start secondary declines to attack 28085* and the recent swing low. Last week’s sideways higher trade suggests a near term shift back to recovery action and favors additional recovery rallies or sideways congestion at 3100-3200. A close over 3285 could fuel retracements to test 3519*.
DEC COPPER
The market is bearish. A close under 31255* is bearish and could renew selloffs to reach under the recent low. Last week’s surge higher alerts for a multi-day upswing with corrective congestion at 315- 34635*. Friday’s friendly close should help boost rallies around 34635*. A close over 34635* is needed to start a bottoming turn and sustained corrections.
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