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Morning Gold Fix: June 23, 2010
Submitted by www.fmxconnect.com
Gold rallied Tuesday, recovering $7 from the washout on Monday. Gold continued its uptrend in Asian and European trading and is up about $3 of the day. Traders are keeping their ears to the ground ahead of options expiries tomorrow. The Federal Open Market Committee will announce any changes in interest rates this afternoon and while there is almost no chance of it moving interest rates the accompanying statements they release could influence market prices.
Pin Risk
July
options Expire tomorrow in Gold and Silver. Much has been said about
options pin risk, much of it incorrect. We hope to shed some more light
on the whats and whys and hows of this phenomenon tomorrow. In the mean time accept this analysis:
·
Absent other exogenous factors, expect the gravitational pull of the
8,871 lots of open interest at the 1250 strike to exert some force on
the market.
· Should the market break through or away from the
gravitational force of the 1250, look to the next strike with major
open interest as a target
· Don’t expect much from this
expiration. July is a serial options month and has only been on the
board for 90 days tops. It has not had the life cycle to accumulate and
consolidate short open interest in the strong hands (more on that
tomorrow)
August gold was up 3 to $1243.8 per 100 troy ounces as of 8:25 AM EDT, this morning. The September U.S. dollar index was down .133 to 86.28. July platinum was down 11.2 to $1581.8 per 50 troy ounces. Silver was down 2.2 cents to 18.88.
- Elizabeth Thawne
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Well, today we're going to find out whether or not Bernanke is...
Rasputin
- Wed, Jun 23, 2010 - 07:26 AM
...willing to let "Great Disintegration I" continue to accelerate, or
whether he--and the other Fed Politburo goons--will finally throw in the
towel.
For, anything LESS than a pronouncement from the "Money Masters"
that "QuantSleaze 2.0" AND "Infinite Zero Interest Rates to Infinity and
Beyond" will result in the continued collapse of:
1. The McMansion/McMortgage market
2. The stock gambling casinos
3. The commercial real estate sham
...and
4. the rest of the Ponzi Pyramid economy
...all of which are wholly dependent upon the relentles, metastatic
growth of debt.
(Ras Conclusion): Clearly even the formerly-clueless Bernanke and
the Boys now must be aware that pulling out of buying Fannie/Freddie MBS
and debt by the Fed and Uncle Gorilla yanking the "Bribe for
Homedebtors" enticement have re-scroomed the phony "recovery".
So, unless The Beard has had some religious conversion from
Keynesianism/Miltyaniasm to von Miseanism, then expect the Politburo to
proffer a statement confirming ZIRP forever and perhaps more mumbling
about re-instituting Infinite fiatsco-flinging at the comatose McHousing
sector.
So, what's it gonna be, little Benny? Are you willing to finally
allow the sorely-needed liquidation to continue?
Or will you live up to all your posturing, threats, and previous
actions?
We shall see today at 2:15 pm-ish, when a breathless Steve Liesman
dissects every syllable of his hero's FOMC release.
Futures Options expiration plus a Fed meeting are a frequently used timing points for JPM, HSBC, GS and the rest of the bankster cabal to take down the precious metals. Indeed in advance the equities markets opening, the precious metals are already weakening.
Unless Ben B announces something that can be deemed inflationary, like QE2, I would anticipate another pushdown today through tomorrow. Late Thursday or Friday morning might be a good entry point for those seeking more exposure to the PMs.
Aggregate value of options = f(price). Max pain around 1210, but best bang for buck to keep price in 1225 range. Lots of support at 1220.
PRICE(AU)
AGG. OPT. VALUE
1170
$118,595,000
1180
$92,989,500
1190
$71,359,500
1200
$52,133,000
1205
$51,404,500
1210
$51,095,000
1215
$52,975,000
1220
$55,862,500
1230
$67,959,000
1240
$84,868,500
1250
$105,617,000
1260
$135,124,500
Hmmm, I was looking for a bottom in gold and silver this afternoon, as lately there has been increasing resistance to the manipulation on expiration day. Too bad they couldn't get the article out today, as I am looking to add a substantial portion to my position (I was looking at +5-6% to my silver position).
Hmm.. like clockwork, AU up in overnight trading in all markets, $1247 just before the crimex open then magically drops to $1236 in about 10 minutes. However, it's been VERY encouraging that gold has been holding its own and even recovering from the daily drops in the am session.
What DIRECTION is $1250 from present price AND basic elementary school science says that gravity pulls DOWN!
Same worthless bullshit analysis as yesterday. Who the hell are these CLOWNS?
Think of the sun's gravitational force on the planets. Gravity pulls toward the center. I'm not saying 1250 will be the gold target tomorrow, but it's about center to the high's and where gold is today.
Check out silver. A mugging in broad daylight. I'm sure Bert and Ernie, I mean Bart and Gary are wondering what all this selling is about. They might even investigate some day.
http://www.kitcosilver.com/
As long af the Fed continues policy that favors banks over citizens, I would put my money in guns and ammunition and a number of other defensive weapons.
Forget gold, there is an estimated $four Trillion in existence above and below ground. That's not much when you hold it up to a $14 Trillion dollar economy and printing presses. It won't work as a reserve currency. At some point a government out of touch will realize it screwed the pooch and at that realization will have no choice but to disarm its' increasingly pissed off citizens.
That old straw man argument as "not enough Gold" is so lame it's ridiculous. The price of Gold will adjust upward to meet demand, HELLO. Gold has been and is the world's reserve currency because it is accepted worldwide NOW.
So then what the hell good are these guns and ammo if the gov disarms everyone?!?!
The paperbugs constantly say guns and ammo and FRNs, oh watch out the gov will seize your gold!!!!!!
WTF, they won't seize your FRNs and guns too!??!
And pray tell HOW would the goobermint go about disarming a pissed-off citizenry and prevent states like Texas, New Mexico, Wyoming, Montana, et.al. from seceding?
Not so. You have not accounted for the gold in the oceans that someday technology will make it feasible to extract.
In a world where everything seems so upside down and unpredictable, isn't it nice to see something remain consistent. How the bastards of the Evil Empire are allowed to play their bullshit games on the Crimex, day in and day out, is beyond me. An absolute joke of a "market".
What time of the day do these options officially expire?
For gold and silver, the COMEX closes at 1:30 and 1:25 Eastern respectively.
http://metalprices.com/introduction/comex_hours.htm
Options Expiry isn't until tomorrow, June 24th...
Does anyone know the key strike prices on the options?
WHAT do you think the ABOVE tables are telling you??????????
Yes, for example, if the key strike price is $1240, and open interest is 125K contracts, then those working the contracts will go on strike at 1:25 PM tomorrow. Everyone else will continue working.
Right, I've no experience in investing so all the jargon is confusing me.
Does 12000 mean the same as $1 200 per ounce? If that level has all the open interest does that mean we can see suppression maybe going below $1 200?
Sorry, confused.
Yes 1200 strike means $1200 per ounce.
They might want to take the price under $1200 to knock out more calls from taking physical delivery, because the comex has many, many times the paper representing gold than actual gold, but if physical demand is overwhelming at that strike so much that it threatens shortages at the retail level, they won't do it tomorrow. They'll may instead offer big cash incentives for not taking delivery or penalties for taking physical delivery or scramble to come up with it. They can take gold about $10 above the target strike so that the call is still in the money, but it's not enough above to make taking physical delivery worthwhile. Same with silver but about 10 cents above.
Yes 1200 strike means $1200 per ounce.
They might want to take the price under $1200 to knock out more calls from taking physical delivery, because the comex has many, many times the paper representing gold than actual gold, but if physical demand is overwhelming at that strike so much that it threatens shortages at the retail level, they won't do it tomorrow. They'll may instead offer big cash incentives for not taking delivery or penalties for taking physical delivery or scramble to come up with it. They can take gold about $10 above the target strike so that the call is still in the money, but it's not enough above to make taking physical delivery worthwhile. Same with silver but about 10 cents above.
Found this on GATA Peter Grandich on the Options Expiry
The Farce and The Fact http://www.grandich.com/2010/06/the-farce-and-the-fact/Thanks. Great chart. Really shows how the gold suppression scheme, led by Greenspan, Rubin and Summers, took gold way down in the mid to late 1990's even when inflation was booming. It was done by corrupting the CPI data, and leasing the physical gold into the market. And as the dot.com stock bubble grew, everyone assumed all was well in the world. Not so. After that market crashed and then the housing bubble popped a few years later, you can see where gold has gone compared to stocks. No contest.
Every subsequent takedown has less and less steam behind it.
The wheels will eventually come off.
"Gold and silver are to be bought"
Patience.
"And pray tell HOW would the goobermint go about disarming a pissed-off citizenry and prevent states like Texas, New Mexico, Wyoming, Montana, et.al. from seceding?"
I didn't say they would disarm the population, but they certainly must try. When We The People get handed the bill for the $12.5 Trillion gift to the ultra rich, I think there will be a general lack of cooperation from tax payers. That should get the party started.
I'd say actions taken by TPTB up to now were not well thought out. The first thing they should have done was take every ones guns away BEFORE they robbed us. But they didn't. Now they have a problem.