Weekly Gold Futures Report

09 Dec

February Gold Futures Settle At $1716.80 For The Week…

Top Down PitThis week the February Gold futures contract covered a range of $55.60 with a high of $1760.50 and a low of $1704.90. The trade itself has been very choppy and volatile in a daily basis. It has been another week driven by news from the European Union. Early in the week there appeared to some optimism mixed with skepticism regarding the European Summit causing traders to cover short positions and profit taking. Many traders and investors alike heard the promises from Chancellor Merkel and President Sarkozy and were optimistic the European Summit would help the world regain confidence in the Euro region and the Euro Dollar. However the results of Thursday meeting disappointed the Global market place. There is obviously no quick fix, but it is my opinion the worlds investors felt more drastic measures could have been taken…

Noteworthy News This Week:

Thursday:

February Gold Futures traded another very volatile and choppy $52.70 range as the market reacted to the day’s conflicting news and leaving investors and traders less than confident with the European Union’s financial leadership. The European Central Bank cut its key interest rate by .25 basis points Thursday, but the majority of analysts predicted it would .50 basis points. The key interest rate sent gold rallying early in the session and producing a high of $1760.50. The rally was halted and an avalanche type sell-off followed after ECB President Mario Draghi announced that the purchase of sovereign bonds would be limited. Once again the leaders from the European Union disappointed the world markets. Today’s United States Initial Jobless Claims was 381,000 this was much better than the 395,000 that was projected. All in all the news today was very “bearish Gold” and despite all the negativity February Gold is still trading above $1700.00 an ounce. It is reported that Standard Poor’s may cut 15 Spanish Banks credit ratings……The news from the EU continues to worsen…

Wednesday:

February Gold Futures traded a very subdued $21.80 range as traders and investors may be side-lined awaiting news from tomorrows European Summit. As Timothy Geithner stated yesterday “the whole world is watching” and indeed that appeared to be the case today. Today’s mid-late session rally may have been caused by some short position profit taking as well as some “bargain hunter buying” in my opinion. I think when the February Futures held the $1700.00 range yesterday it was technical and psychological buy signal. Tomorrows EU summit will hopefully be a powerful meeting resulting in a deal to get their debt crisis under control. President Nicholas Sarkozy and Chancellor Angela Merkel are expected to address the EU treaty, restore market confidence, and to prevent the sovereign debt crisis from spiraling out of control. Once again Standard and Poor’s placed large banks on a negative credit watch including BNP Paribas, Commerzbank, Deutsche Bank, Societe Generale, Unicredit, Rabobank, Credit Foncier, Credit du Nord, Ulster Bank, and Banca Nazioale del Lavoro.Tomorrows summit coupled with the release of key U.S economic data should make for a very interesting trading session on Thursday…

Monday:

There was early optimism that the European Union leaders will devise a scheme to address the sovereign debt crisis in the region during their upcoming Thursday summit.

It is reported that the European Union will take big steps in an attempt to right the debt crisis ship. They are scheduled to discuss (1) Strengthening the European banking system (2) Ensuring global financial-system liquidity (3) Facilitating a de-leveraging of debt-encumbered economies (4) Ensuring sufficient growth within the global economy to boost demand for troubled economies.

German Chancellor Angela Merkel stated that France and Germany must work together in the closest terms and added the summit purpose is to regain lost confidence. French leader Nicolas Sarkozy said he wanted monthly Euro region summits during the crisis and in order to preserve Europe the crisis must be stopped.

Chicago Fed Boss Charles Evans said ‘it is imperative for Fed to escape the liquidity trap and that further monetary stimulus is needed”.

Late in the day session Standard and Poor’s warned that Germany and other European states with AAA ratings are at risk of a downgrade. According to FT (Financial Times) Germany, France, Austria, Finland, and the Netherlands are on a negative credit watch. The downgrade has since been expanded to all 17 Euro states.

It certainly has been a rough week for the European Union and for gold bugs

NEXT WEEK: FOMC MEETING

My Swing Numbers 12/12

FEBRUARY GOLD

RESISTANCE # 2……………$1740.00

RESISTANCE # 1……………$1729.00

PIVOT………. ………………$1717.00

SUPPORT # 1………………..$1705.00

SUPPORT # 2………………..$1694.00

There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. PFGBEST, its officers and directors may in the normal course of business have positions, which mayor may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

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