Gold Options Report – May 3, 2012

Summary

June Gold settled at $1634.80 per troy ounce, a loss of $19.20 for the day.

 

 

Market Recap:

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.

 

Active Options

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

 

Directional Commentary:

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

 

 

Closing Straddles

GC
	Future	Bid	Offer
M12	1635	42	46
N12	1640	73	77
Q12	1640	99	103
U12	1640	124	128
V12	1640	144	148
X12	1645	162	166
Z12	1645	182	186