gold

Gold tested resistance at 1685 yesterday and started to drift lower for the rest of the day. Only in late trading large sell stops were triggered on moves below 1665 and 1660, as commodities in general saw pressure from risk reduction. Indian jewelers continued their strike, according to the All India Gems and Jewellery Trade Federation, 85% of the 300’000 Jewellers were still on strike. The Istanbul Gold Exchange reported a drop of 57% in year-on-year imports to 7.2 tons, due to a weaker Lira and higher international Gold prices. Bloomberg reported with a bit of delay Global Gold ETF holdings, which saw a drop of 3.8 tons. Silver implied volatilities continued to weaken, with the 6 month vol touching 32%, the lowest level in 13 months. We would still keep the USD index in focus, which has now tried the fourth time the support line. If this holds again, we would not be surprised to see a sudden jump higher to try and test resistances this time. Gold must hold 1650 today, while 1665 should provide first resistance. There will be option expiry on the GLD ETF tomorrow, where the largest open interest sits far away on the 150 strike (1544 spot) with 2.1 Mio. ounces of open interest. Closer strikes see 1.4 Mio. ounces on the 165 strike (1699 spot), but also 1.4 Mio. ounces on the 155 strike (1595 spot), while 1.1 Mio. are on the 160 strike (1647 spot). Depending on how the USD trades, 1600 or 1700 could therefore still get in jeopardy.