Gold Options Report – May 3, 2012
June Gold settled at $1634.80 per troy ounce, a loss of $19.20 for the day.
Gold futures traded lower on Thursday, finding little in the way of encouragement from ECB President Mario Draghi’s post-meeting comments, slightly-better than expected U.S. weekly jobless claims, or the ISM Services Index (53.5 vs. 55.5 expected) to coax prices higher. All eyes will be on tomorrow’s payroll numbers for additional insights into U.S. economic health.
M 1650 C
M 1600/1575 1×2 P. Spread
N 1615 P
Q 1700/1800 C. Spread
V 1750 C
Z 2000 C, Z 2200 C
M 13 1700 Straddle
Options: Volatility was bid, and fences advanced toward the put on today’s move lower. Not everyone was bearish however, with some speculators taking the sell-off as an opportunity to purchase structures such as the August 700/1800 C.S. and December 2000 Call. Activity was slightly bearish overall. Conclusion: Slightly Bearish
Technical: Gold futures continued to trend lower on Thursday, closing lower for the 4th consecutive day. Gold is moving back towards the lower end of the trading range after rejecting the 100-day moving average (currently 1674). This is the third time Gold has failed to break-out above the 100-day moving average since trading below it March 13th. As we continue to reiterate, Gold has been trading broadly sideways this entire period, and we would look for a settlement below the April low of 1613 (or above the the 100-day Moving average) to initiate a possible break-out. That being said, futures appear poised to plumb the bottom of the trading range again. Conclusion: Neutral