10-7-10 Market Recap for Silver and Gold
Gold Market Analysis for 10-7-10
The bears will suggest that gold was overdone and unwilling to face the prospect of significant volatility into the upcoming US payroll report. The bull camp might try to explain the aggressive reversal as a necessary balancing move in the wake of this week’s low to high rally of roughly $53 an ounce. Clearly a mid day recovery effort in the US Dollar partially coincided with the fall back in gold prices and given that the prior day’s lows were violated it wouldn’t be surprising to learn that technical influences accentuated the action today. One could even go so far as to assert that better than expected US claims data either reduces the odds of QE2 or that the better numbers simply push back the expected timing of QE2. In conclusion, the gold market saw a number of elements reverse from earlier in the week and that seemed to usher in a setback in prices.
Silver Market Review for 10-7-10
The silver market also managed to forge a temporary new high for the move before what appeared to be a wide ranging reversal. The fact that a number of physical commodities saw reversal action hints at a broad based profit taking mentality ahead of the Non Farm payroll report and also suggests that the reversal was about external issues instead of internal silver market issues. With the December silver contract to the highs this morning reaching $1.72 an ounce above this week’s lows, the argument for a technical correction seems to be well supported.
After reading the silver and gold recap, traders might want to take a peek at the commercial traders momentum. The Commercial Trader momentum can be tracked by using the Commodity Futures Trading Commission Commitment of Traders reports. Our idea is that, in a value driven commodity futures market no one knows fair value like the people who produce it or, have to use it. In fact, it is precisely their sense of value that provides the commodity market’s rhythmic meanderings that swing traders love so much. Let’s face it, producers know when their product is overvalue and it should be sold just as well as end line users know when they should be stocking up at low prices. Therefore, trader should be able to incorporate this valuable information into their futures market education.
This blog is circulated by Andy Waldock. Andy Waldock is a financial advisor, asset manager, trader, analyst and brokerfor Commodity & Derivative Advisors, located in Sandusky, Ohio. As a result, Andy Waldock may have positions for himself, his family, or his clients in any commodity future market discussed. The blog is meant for educational purposes and to develop a dialogue among those with an interest in the commodity future markets. The commodity markets employ a high degree of leverage and commodity trading may not be suitable for all investors. Investing in the commodity futures could result in substantial risk. If you are interested in reading other published articles, commenting on his publications or subscribing to Andy’s blog, please visit http://blog.commodityandderivativeadv.com, or if you have any questions, please call 1-866-990-0777.
The daily commentaries provide an analysis of the factors that influenced price activity, a recap of any reports released that day, a review of each commodity’s traded price activity, and a look ahead at the schedule for the next day. CME Group provides market commentaries for soybeans, corn, wheat, silver and gold. The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
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