Morning Gold Fix – November 18, 2011
FMX | Connect – www.fmxconnect.com - (Reported 11/18/2011)
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 $1,720.20 per troy ounce on Thursday, a loss of $54.10 for the day.
December gold was up $11.7 to $1731.9 per 100 troy ounces as of 8:15 am EST this morning. The December U.S. dollar index was down 0.554 to $77.935. January platinum was up $17.3 to $1598.4 per 50 troy ounces. December silver was up 60.8 cents to $32.105.
Market Recap:
Gold futures tumbled on Thursday as the global perception of the European crisis escalated another notch. The commodity sector was devastated on a smattering of foreboding headlines. Yesterday IMF director Antonio Borges resigned abruptly and the organization is prepared to withhold the next tranche of aid from Greece without firm commitment from its politicians. Bond yields surged in recent auctions from Spain and France. Additionally, Hungary announced its intention to speak with the IMF about some form of assistance (note: While a member state, Hungary does not use the euro).
Gold trended lower on Thursday, pummeled by hefty liquidation across the asset classes. Much like yesterday, December gold options were the first item on the agenda and call owners couldn’t find the exit fast enough. Whereas once market participants could envision the possibility of pinning the 1800 strike, today the 1800 Call was sold by the thousands and downside risk became a more pressing concern. Puts were bid, but volatility was surprisingly unresponsive to a $50 sell-off, suggesting the market is still in a call skew. Heavy options volume for April may have contributed to this phenomena with both the 1775 Straddle and some wide fences observing some size.
Market Prices
In the News
Bloomberg (Reported 11/18/2011)
Copper traders and analysts are the most bearish in almost two months because of mounting concern that Europe’s debt crisis will curb demand in the region that accounts for about 19 percent of global consumption. Eleven of 23 surveyed by Bloomberg expect the metal to decline, the second consecutive week that their outlook worsened and the highest proportion since Sept. 23. The last time so many were bearish, prices dropped 4.6 percent the following week. Copper Traders Most Bearish in Two Months on Europe: Commodities
Reuters (Reported 11/18/2011)
Gold inched up on Friday helped by a weaker dollar and some bargain-hunting but was still on track for its largest weekly loss since September as euro zone debt contagion worries spooked investors. Silver also rose slightly after falling almost 6 percent in the previous session amid a broad retreat in both precious and industrial metals, triggered by a flurry of stop-loss selling. Gold inches up on weaker dollar, Euro worries weigh
KITCO (Reported 11/18/2011)
Some bargain hunting buying interest and a technical corrective bounce are seen Friday morning in the wake of $50-plus losses suffered in gold on Thursday. It was a “when in doubt, get out” day in the market place Thursday, as many markets saw heavy selling pressure amid keener uncertainty regarding the European Union sovereign debt crisis. The market place has stabilized in early U.S. trading Friday. However, the EU debt crisis is far from being resolved and could blow up again at any time. Comex Gold Sees Corrective Bounce As U.S. Dollar Index Backs Off, Crude Oil Gains
Technical Overview
DEC GOLD
Yesterday’s sharp break signals a peaking turnover and targets selloffs to 1690 and likely 1667. Trade is poised for follow through selloffs and a close under 169680 will encourage selloffs into next week. Any corrective action contained within yesterday’s downturn will quickly bear flag. A close over 177550* is needed to rekindle the bull trend.
DEC SILVER
The sharp drop off signals a topping turnover, suggesting the past two month recovery was a larger bear flag. Be alert for selloffs to 2980. A close under 2980* alerts for a larger unfolding break against the late September spike. Any corrections trapped within yesterday’s downturn under 33435* will quickly bear flag and return to selloffs. A close over 3392* is needed for a bull turnaround.
DEC COPPER
The market is signaling for another bear wave to test 33055* support. Yesterday’s slide should promote declines today. A close under 33055* is bearish and could add to selloffs into the low 320’s. If trade holds the low 330’s, then we may see additional sideways flagging days. Trade will need a pop over 360 or close over 35850* to rekindle bull forces.
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