Gold Call Options at $2,000/oz – Goldman and Credit Suisse Bullish Due to US Interest Rates

Gold is trading at USD 1,778, EUR 1,300.20, GBP 1,114.90, CHF 1,606.10, JPY 136,750 and CNY per ounce. 

Gold’s London AM fix this morning was USD 1,780.50, GBP 1,115.29, and EUR 1,299.06 per ounce.

Friday’s AM fix was USD 1,764.00, GBP 1,109.02, and EUR 1,294.39 per ounce.


Cross Currency Table 

Gold is marginally lower today on hopes that changes in the political leadership in Italy and Greece might lead to a resolution of the eurozone’s debt crisis and prevent contagion and the breakup of the monetary union. This has seen risk appetite return with most Asian equity indices posting gains.

European indices are more subdued and may be taking a more realistic view regarding the political changes in Greece and Italy. 

The debt crisis is of a scale that simply changing who is in power and installing unelected technocrats will not solve the crisis. 

There is again a real sense of rearranging the deck chairs on the Eurozone Titanic and the root cause of the crisis – too much debt in the banking and financial sector and too much private debt has yet to be confronted. 

Gold’s positive momentum continued last week with gold recording a 1.8% gain. Gold has now risen three weeks in a row and looks set to record a second monthly gain after October’s monthly gain.

Gold remains up 25% year to date in US dollars and (22% in Euros and British pounds) and thus the recent correction and consolidation was a healthy development that took the short term froth out of the market and has now left the gold market with stronger foundations.

Physical demand from Asia continues but for now is below the very high levels seen in recent weeks.

Central bank demand continues. Overnight, the Russian central bank announced their intention to buy 100 tonnes of gold in 2011. Ria Novosti reports that Russia has acquired over 90 tons of gold since early 2011 and plans to increase the amount by 100 tons, the Central Bank Deputy Head, Sergey Shvecov, stated at a finance conference.

Concerns about the euro and Eurozone and the weak dollar have been cited as reasons for Russia’s continuing FX reserves diversification.

Options traders remain bullish with most open interest for November centering on $2000 calls, $3000 calls.

In options today, the largest change in open interest was seen in $1920 calls for the Nov 22 expiry, where OI rose 643 lots to 1,389 lots. $1900 calls rose 526 lots to 9,242 lots.

Gold ETF data shows continuing safe haven flows and diversification into gold.

Global holdings of gold rose last week, by nearly 897K oz, their largest weekly rise since the week ending Aug 5 2011, when holdings rose by a net 1.089M oz, according to Reuters. 

Total gold ETF holdings stand at around 68.854M oz, up a full 1.749M oz in the last month. November is shaping up to show the largest monthly inflow since July. So far this month, holdings have risen by 947K oz.

Goldman Sachs today reaffirmed that it remains overweight in commodities. On gold it says it will roll over its Dec 11 long to Dec 12.

"We expect gold prices to continue to climb in 2011 and 2012 given the current low level of US real interest rates, and as a result recommend a long gold position." 

Credit Suisse has said, "that gold may climb over $1,800 in the coming days with negative real interest rates as the ‘key driver’."

For breaking news and commentary on financial markets and gold, follow us on Twitter.

SILVER 
Silver is trading at $34.30/oz, €25.12/oz and £21.53/oz 

PLATINUM GROUP METALS 
Platinum is trading at $1,640.70/oz, palladium at $654/oz and rhodium at $1,525/oz. 

NEWS
(Reuters)
Gold steady as Italy, Greece offer hope‎

(MarketWatch)
Gold futures gain in electronic trading

(Reuters)
Gold edges up after Italy, Greece form governments

(RTE)
Oil up amid fresh fears on Middle East tension

COMMENTARY
(MarketWatch)
Brimelow: Is Gold Headed to $2,200?

(FXStreet)
Where is the ECB Printing Press?

(GoldSeek)
Physical gold to trump ETFs by 500% in 2011 hears Dubai conference

(Financial Times)
Currency Wars – Jim Rickards on ‘Currency Wars’

 

Mark O'Byrne

Also on news-goldcore-com

Videos

Tavi Costa- The Fed is Trapped

Silver Market Predictions – Ed Steer Talks about the Silver & Gold Price

Are We In A Financial Bubble? Peter Grandich Interview

Blog posts

Lawrence Lepard – Living in a World with Inflation

Lawrence Lepard Portfolio Manager and advocate of sound money, is our guest on this episode of GoldCore TV. With 40% of money in the US being created in the last 2 years, we ask Lawrence if the Fed is trapped. If so will this mean that it is going to be very difficult for them […]

READ MORE

Supply Chain Crisis Effects on Gold & Silver

The broken chain – could the supply crunch be worse than the oil crunch of the 1970s Anyone that has bought a new or used car in the last year has faced higher prices and long wait times for delivery. This is all because of the very small but essential semiconductor, which is in short […]

READ MORE

This is a Long Term Bullish Pattern for Gold – Gareth Soloway on GoldCore TV

“This is a long term bullish pattern for gold!” – Gareth Soloway Gold In this latest episode of GoldCore TV, Gareth Soloway joins Dave Russell to discuss what what the charts are suggesting for the stock markets, bond markets and #bitcoin. In addition to this he also takes a look at his gold price forecast 2021 and beyond.Gareth identifies the key levels that […]

READ MORE

Featured

Gold, the Tried-and-True Inflation Hedge for What’s Coming!

READ MORE

How High is Too High for Rising Government Bond Yields?

READ MORE

Silver – 7 Reasons it is Still Set to Soar

READ MORE
Newsletter
Category
Archives
Popular

No posts available

Videos

Tavi Costa- The Fed is Trapped

Silver Market Predictions – Ed Steer Talks about the Silver & Gold Price

Are We In A Financial Bubble? Peter Grandich Interview

Blog posts

Lawrence Lepard – Living in a World with Inflation

Lawrence Lepard Portfolio Manager and advocate of sound money, is our guest on this episode of GoldCore TV. With 40% of money in the US being created in the last 2 years, we ask Lawrence if the Fed is trapped. If so will this mean that it is going to be very difficult for them […]

READ MORE

Supply Chain Crisis Effects on Gold & Silver

The broken chain – could the supply crunch be worse than the oil crunch of the 1970s Anyone that has bought a new or used car in the last year has faced higher prices and long wait times for delivery. This is all because of the very small but essential semiconductor, which is in short […]

READ MORE

This is a Long Term Bullish Pattern for Gold – Gareth Soloway on GoldCore TV

“This is a long term bullish pattern for gold!” – Gareth Soloway Gold In this latest episode of GoldCore TV, Gareth Soloway joins Dave Russell to discuss what what the charts are suggesting for the stock markets, bond markets and #bitcoin. In addition to this he also takes a look at his gold price forecast 2021 and beyond.Gareth identifies the key levels that […]

READ MORE

Featured

Gold, the Tried-and-True Inflation Hedge for What’s Coming!

READ MORE

How High is Too High for Rising Government Bond Yields?

READ MORE

Silver – 7 Reasons it is Still Set to Soar

READ MORE