Morning Gold Fix – October 11, 2011
FMX | Connect – www.fmxconnect.com - (Reported 10/11/2011)
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 $1,670.80 per troy ounce on Monday, a gain of $35.90 for the day.
December gold was down $11.7 to $1659.1 per 100 troy ounces as of 8:30 am EST this morning. The Dec U.S. dollar index was up 0.299 to $78.110. January platinum was down 10.6 to $1514.5 per 50 troy ounces. Dec silver was down 47.5 cents to 31.505.
Market Recap
Gold rallied on Monday, uplifted by new commitment from the EU to recapitalize ailing and endangered banks. The euro surged, the dollar dropped sharply and dollar-denominated assets were almost universally swept higher.
Exchange volumes did not bear out much conviction for today’s rally with December estimated futures volume clocking in at a tepid 80,635 contracts. Options trading followed a similar pattern, and there was very little to speak of besides the selling and liquidation of front-month options. Volatility was lower across the term structure, and fences were largely unchanged. The biggest single trades of the day were the sales of the November and December 1600 puts. There was not a lot of interest in calls and call spreads overall, and some long speculators are beginning to throw in the towel. November has only 13 trade days until expiration, but there is some heavy open interest in December Calls that could really begin to weigh on this market if a rally doesn’t materialize.
Market Prices
In the News
Bloomberg (Reported 10/11/2011)
Gold declined from a two-week high as investors awaited a vote in Slovakia to approve the European bailout fund. Bullion for immediate delivery shed as much as 0.6 percent to $1,666.65 an ounce, after climbing to $1,684.63 an ounce, the highest level since Sept. 23. It traded at $1,668.25 at 4:10 p.m. in Singapore. The metal jumped 2.4 percent yesterday, the most since Sept. 8. Futures for December were little changed at $1,669.90 an ounce. Gold Declines From Two-Week High Before Slovakia Vote on Bailout Fund
Reuters (Reported 10/11/2011)
Ghana is in talks with gold miners in the country, Africa's second-biggest producer, over additional taxes so as to benefit from the soaring price of the precious metal, the government said on Tuesday. Finance Minister Kwabena Duffuor told Reuters that the ministry was in talks with the miners with options that included the introduction of a windfall tax. Ghana in talks with gold miners over new taxes
Kitco (Reported 10/11/2011)
U.S. and European stock markets are weaker Tuesday as traders and investors awaited a Slovakian vote on expanded the European Union bailout mechanism. The Slovak vote is the last country of the 17 EU members to vote, and many were thinking the Slovaks would vote down the bailout expansion. That put some pressure on the Euro currency and the European and U.S. stock markets. Last weekend the leaders of the two biggest EU economies—Germany and France—pledged to fully support efforts to fix the EU debt and financial crisis. As was seen Tuesday, the EU debt crisis is far from being fully repaired. Comex Gold Modestly Lower On Corrective Pullback As U.S. Dollar Index Firmer
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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