DECEMBER GOLD FINISHES SESSION UP $4.90 AND SETTLES AT $1725.10 FOR THE WEEK
This week the December Gold Futures contract covered a vast $86.60 trading range. On Monday November 14th we traded as high as $1797.60 and on Thursday November 17th we traded as low as $1711.00 the volatility and choppy market conditions continue to be fueled by the increased fragility in the European Union. The economic news here in the United States coupled with the worsening debt crisis in the Euro region has fueled a STRONGER U.S DOLLAR and therefore pressuring the precious metals markets.
The recent SELL-OFF in the Crude Oil futures has also halted the rally momentum in the Gold market. Both Gold and Crude oil NORMALLY are ANTI Dollar, therefore when The Dollar is WEAK normally Gold and Crude oil are STRONG and VISA VERSA.
WEEKLY NOTEWORTHY NEWS:
THURSDAY:
Traders and investors alike are liquidating their precious metals in order to raise cash. This is almost exactly the opposite in the normal thinking in trading gold during times of economic crisis. The European continent is facing its worst economic crisis since World War 2. This should be reason enough for a flight to “safer havens”. However, in my opinion European and global investors are liquidating Gold and Silver to raise cash and are choosing the U.S dollar as their currency of choice recently.
The U.S economic data recently has shown that the United States economy is growing stronger despite the continued slide in the European union. The weekly report on Initial Jobless Claims is 388k this was expected to be 395k.
WEDNESDAY:
According to Chris Kahn of the associated press: Iran, the world’s fourth-largest oil exporter, is suspected of developing nuclear weapons, according to a United Nations report in early November. Its nuclear program could lead to international trade sanctions, and Israel has threatened military action.
Companies operating in Nigeria also say that oil production has been hurt by spills, sabotage and outright thefts. Nigeria is one of the top five oil exporters to the U.S. Supplies of oil, gasoline and diesel also have been falling in the U.S., increasing the price pressure on those commodities.
TUESDAY:
The wide ranges have been very technical as they have traded between technical support and resistance levels…. I believe these technical ranges indicate the true lack of confidence that investors have. Gold bugs are not pushing the boundaries since the avalanche sell-off on September 23rd. (9/23 trading range…High-$1757.90 Low-$1631.70).
The volatility has left many traders a bit gun shy. Crude Oil prices are once again approaching $100 per barrel. The higher Crude prices are normally `bullish” for Gold. The higher Crude oil prices helped to offset the higher U.S Dollar today.
MONDAY:
The stronger U.S Dollar pressured the Gold as investors viewed German Chancellor Angela Merkel’s comment “Europe could be living through its toughest hour since World War 2″as as a reality check after initial optimism concerning the change in governments in both Greece and Italy.
The Dollar rose against the Euro after the sale of 5 year Italian Government Bonds came at the highest price in 14 years….Today’s trading volume was extremely light as investors remain very tentative and are seeking economic and geo-political data in order to choose their trading strategies…. The whippy and volatile ranges have side-lined smaller and less aggressive traders.
I expect the precious metals to remain volatile as the world awaits to see the post Papandreou and Berlusconi regimes.
MY SWING NUMBERS 11/21
DECEMBER GOLD
RESISTANCE # 2……………………………$1753.00
RESISTANCE # 1……………………………$1739.00
PIVOT …………………………………………$1725.00
SUPPORT # 1……………………………….$1712.00
SUPPORT # 2……………………………….$1698.00
VOLUME …………………………………….230,000
Mike Daly / Gold Specialist
Research Division
312.563.8029
877.294.4669
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