Morning Gold Fix – October 26, 2011
FMX | Connect – www.fmxconnect.com - (Reported 10/26/2011)
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 $1,700.40 per troy ounce on Wednesday, a gain of $48.10 for the day.
December gold was up $6.4 to $1706.8 per 100 troy ounces as of 8:30 am EST this morning. The December U.S. dollar index was down 0.001 to $76.320. January platinum was up 6.4 to $1575.2 per 50 troy ounces. December silver was up 18.3 cents to 33.235.
Market Recap
Gold surged higher on Tuesday, pushing above $1,700 an ounce for the first time in more than a month. Decreased expectations out of the EU summit helped restore the luster of gold’s safe-haven appeal, which has weathered increased scrutiny the past several weeks. U.S. Consumer Confidence also fell to a forlorn 39.8 in October from 46.4 in September. Tepid economic data and growth projections out of the U.S. have spurred predictions of additional quantities easing, which would also provide support for the metal.
Gold trended solidly higher from the U.S. open, drawing support from the confusion and diminished expectations surrounding the EU summit tomorrow. This was punctuated by the cancellation of the finance minister meeting, which in early news reports, led many investors to believe tomorrow’s discussions were abandoned entirely. The leader summit was never canceled but global markets were decidedly skittish, choosing to interpret the cancellation as a sign that participants were struggling to find a consensus. Calls, straddles and volatility were all bid during today’s rally, and futures volume picked up significantly. In addition to event risk, traders also had to contend with November options expiration tomorrow. The November 1700 Call and 1725 Call both traded heavily, as did the December 1700 Call, December 1550 Put and February 2000 Call.
Yesterday we called for a break-out in Silver; read the follow-up here: Silver Trend-Vol Alert Update
Market Prices
In the News
Bloomberg (Reported 10/26/2011)
Scott Garber and his three partners have been opening gold-buying stores at the rate of more than one a week since they started their business three years ago. Thanks to the rising price of gold and recession-battered Americans eager to trade jewelry for cash, the stores are on a pace to generate a total of $175 million in revenue this year, almost quadruple the $45 million in sales in 2010, Garber said. The price of gold, heading for its 11th straight annual gain, has jumped 20 percent this year, outperforming global equity markets, industrial commodities and Treasuries. Surging Gold Sparks U.S. Retail Chain Promoted by Robin Leach
Reuters (Reported 10/26/2011)
Gold hit one-month highs on Wednesday in its longest stretch of gains in over two months as investors sought the safety of bullion in the face of an uncertain outcome to a key EU summit and after a surprisingly poor read of U.S. consumer confidence. Expectations of a comprehensive solution emerging from a second European Union summit in four days have diminished as officials wrangle over how to scale up the euro zone rescue fund and over how much of a loss private bondholders will take on Greek debt. Gold reprises haven role in four-day rally
Kitco (Reported 10/26/2011)
Perceived bargain hunting and safe-haven buying have rushed into the precious metals markets this week. The market place has now become disenchanted with the progress, or lack thereof, on the European Union sovereign debt crisis. An EU summit meeting Wednesday is anxiously awaited, but the market place is now expecting more of the same: kicking the can down the road on the matter. The safe-haven gold market has and will likely continue to garner at least some underlying investment demand from the EU debt crisis. Comex Gold Firmer On Follow-Through Strength From Tuesday's Big Surge
Technical Overview
DEC GOLD
1* Market showing a breakout over a previous daily swing high and should quickly extend rallies. Failure to extend the breakout now alerts for a bull failure. A close back under 1670.21 signals a breakout failure and turnaround. 2* Historical analysis of this minor swing pattern shows a definite bullish bias for today's action, with the odds of this market taking out yesterday's high in the next two trading sessions around 71 percent. 3* Yesterday's close signals breakout over a previous daily swing high and should prompt continuation rallies the next 1-3 days. Sustained trade over the previous high will help motivate rallies. Corrections should not close below 1670.21 to maintain the breakout. 4* The upside target zone for this pattern is from 1729.10 to 1788.90 with a close under 1645.19 needed to negate a bull trading stance. 5* Market is within proximity of this week's projected resistance range of 1761.13-1720.90, which may provide a likely zone for topping action or setbacks. 6* The penetration of the recent 1666.90 inside day high provides a bull trend signal.
DEC SILVER
1* Market showing a breakout over a previous daily swing high and should quickly extend rallies. Failure to extend the breakout now alerts for a bull failure. A close back under 3206.71 signals a breakout failure and turnaround. 2* Historical analysis of this minor swing pattern shows a definite bullish bias for today's action, with the odds of this market taking out yesterday's high in the next two trading sessions around 71 percent. 3* Yesterday's close signals breakout over a previous daily swing high and should prompt continuation rallies the next 1-3 days. Sustained trade over the previous high will help motivate rallies. Corrections should not close below 3206.71 to maintain the breakout. 4* The upside target zone for this pattern is from 3436.50 to 3541.50 with a close under 3125.29 needed to negate a bull trading stance. 5* Market is within proximity of this week's projected resistance range of 3499.34-3372.65, which may provide a likely zone for topping action or setbacks. 6* The penetration of the recent 3215.00 inside day high provides a bull trend signal.
DEC COPPER
1* Market showing a preliminary breakout over a previous daily swing high and needs to quickly extend rallies into a close beyond 346.35. Failure to extend the breakout today-tomorrow alerts for a bull failure. A close under 334.49 helps confirm a breakout failure. 2* Market is challenging a previous daily swing high and may attempt a breakout. Closing beyond 346.35 calls for continuation rallies. A failure around 346.35 cautions for a reactionary setback. 3* The upside target zone for this pattern is from 379.30 to 389.60 with a close under 322.51 needed to negate a bull trading stance. 4* Market is within proximity of this week's projected resistance range of 366.75-350.82, which may provide a likely zone for topping action or setbacks. 5* Yesterday's penetration of support range levels gives a
statistical bias for declines today-tomorrow.
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