Morning Gold Fix – November 21, 2011
FMX | Connect – www.fmxconnect.com - (Reported 11/21/2011)
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 $1,725.10 per troy ounce on Friday, a gain of $4.90 for the day.
December gold was down $18.5 to $1706.6 per 100 troy ounces as of 8:15 am EST this morning. The December U.S. dollar index was up 0.340 to $78.398. January platinum was down $23.2to $1565.5 50 troy ounces. December silver was down 116.7 cents to $31.250.
Market Recap:
Markets opened higher Friday morning, but struggled to preserve gains in the wake of yesterday’s sell-off. By the end of the day the move proved mostly a modest retracement, with the Dollar index trading back close to the highs of the day after being down more than a basis point.
December Gold retraced higher on dollar weakness this morning but recorded only modest gains on the day. It seemed as if the pattern was buy the European open and sell the U.S. open, and futures failed to break support at 1711 for the second day in a row. As one might expect, market participants continued to unwind December options open interest ahead of Tuesday expiration. The 1700 put was heavily traded. On the day, volatility was mostly unchanged and fences moved toward the put.
Market Prices
In the News
Bloomberg (Reported 11/21/2011)
Hedge funds cut bullish commodity bets by the most in seven weeks on mounting concern that Europe’s debt crisis will restrain global economic growth and demand for raw materials. Money managers reduced combined net-long positions across 18 U.S. futures and options by 10 percent to 754,558 contracts in the week ended Nov. 15, Commodity Futures Trading Commission data show. That’s the biggest decline since the seven days ended Sept. 27. Sugar wagers fell 30 percent, the most since December 2008, and bets on lower copper prices almost doubled. Hedge Funds Cut Bullish Bets by Most in Seven Weeks on Europe: Commodities
Reuters (Reported 11/21/2011)
Gold fell by more than 1 percent on Monday, swept lower by a firm dollar and falls in other financial markets as worries deepened about government debt in Europe and the United States. Gold has moved in tandem with riskier assets in recent months, instead of as a traditional safe haven, over the past few weeks. It could fall further in sell-offs in other markets, as investors liquidate gold positions to cover losses elsewhere as funding dries up in the turmoil. Gold falls as dollar firms, fear sweeps markets
Technical Overview
DEC GOLD Last week’s sharp break signals a peaking turnover and targets selloffs to 1690 and likely 1667. Friday’s inside day keeps trade poised for follow through selloffs and a close under 169680 will encourage selloffs into next week. Any corrective action contained within Thursday’s downturn will quickly bear flag. A close over 177550* is needed to rekindle the bull trend.
DEC SILVER
Last week’s drop off signals a negative 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 Thursday’s downturn under 3339* will quickly bear flag and return to selloffs. A close over 33875* is needed for a turnaround.
DEC COPPER
The market is signaling for another bear wave to test 33055* support. Corrections contained to the 340’s will stay positioned for declines. 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 rebounding days, but trade will need a pop over 360 or close over 35850* to rekindle bull forces.
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