Gold Glitters On New Fundamentals
An agreement by European central banks to limit sales boosted gold to its largest gain in 14 years. The promise to cap sales and lending of bullion changes the fundamental backdrop for the metal by reducing the threat of a global gold glut.
December gold [GCZ9>GCZ9] reached levels not seen since May, ending 14.0 higher at 283.8 and solidifying its position on the Momentum-5 List.
Silver [SIZ9>SIZ9] followed on gold’s heels, rising 10.0 to 535.5.
December T-bonds [USZ9>USZ9] sold off as stocks rebounded, falling 24/32 to 114 20/32.
Stock index futures opened strong but faded as the day wore on. December Dow futures [DJZ9>DJZ9] pared triple digit gains to end up 42.0 at 10,405. The S&P futures [SPZ9>SPZ9] added 7.90 to 1296.40 and NASDAQ 100 futures [NDZ9>NDZ9] gained 26.25 to 2451.25.
December dollar index futures [DXZ9>DXZ9] rose slightly to 99.33 on the back of a weaker yen. Traders sold yen on the view the Bank of Japan will add liquidity to its monetary system in an effort to keep the strengthening currency from de-railing a nascent economic recovery. The December yen [JYZ9>JYZ9] fell .0170 to .9549 and British pounds [BPZ9>BPZ9] rose .0040 to 1.6476.
OPEC’s agreement last week to maintain production quotas continues to bolster energy contracts and keep them on the Momentum-5 List. Unleaded gas [HUX9>HUX9] closed at a new high of .6930 after gaining .0046. Heating oil [HOX9>HOX9] hit an intra-day high, then made good on its Turtle Soup Plus One Sell setup, closing at .6270. November crude [CLX9>CLX9] fell .15 to 24.61 and natural gas [NGX9>NGX9] rallied .018 to 2.931.
The grains ended modestly higher but will have to make a bigger move if they are to come off the Multiple Days Low Volatility List. December wheat [WZ9>WZ9] rose 2 to 279 ¾, December corn [CZ9>CZ9] added 3 ¼ and November soybeans [SX9>SX9] gained 4 ¾ to close at 484 ¾.
Pork contracts rallied their daily limit: From the Momentum-5 List, February pork bellies [PBG0>PBG0] gained 3.000 to close at 65.425 and October lean hogs gained [LHV9>LHV9] 2.000 to 48.500.
In soft and fiber contracts, December cocoa [CCZ9>CCZ9] rallied for a second day, moving up 25 to 1032 and November orange juice [OJX9>OJX9], from the Pullback Off Lows List,
ended at its lowest level in five weeks, falling 1.95 to close at 89.65.