The euro is surprisingly firm with the US dollar, Japanese yen and Swiss franc under pressure. Risk appetite remains high with commodities higher and peripheral bond markets have received a bid and seen yields fall due to optimism on the Greek vote.
New short-term options contracts for gold, crude oil and natural gas will begin trading under Comex and Nymex rules and regulations on July 16. The new short-term options contracts will have daily expiration dates listed up to five days in advance.
Gold and silver closed higher yesterday after Standard & Poor's, somewhat belatedly, cut its outlook for the US from stable to negative. While the move seemed to surprise some, many market participants have been warning that this was inevitable.
Gold and silver prices jumped, with gold tallying new records, during late-morning US trading as the euro fell against the dollar after Portugal's long-term credit rating was downgraded and the US reported weaker than expect services sector activity.
Precious metals trading opened on a defensive note once again this morning, as currency markets saw the US dollar as well as the euro (at slightly different times) benefiting from hawkish jawboning coming from the official sector.
Gold prices advanced to a new record settle of $1,431.20 an ounce and silver reached new a 31-year high of $34.42 an ounce while oil surged to near $100 a barrel on Tuesday as unrest in Libya spurred safe haven and inflation fears.
Silver prices remain in backwardation, showing buyers are willing to pay a premium for deliverey sooner rather than later. Both gold and particularly silver are vulnerable to a short squeeze sending prices beyond recent record nominal highs.
Traders have to remember they are a zero-sum game. Every short has an offsetting long, and vice versa. It's easy to get bogged down and derailed in the COT, giving this report more credit than it deserves.
Silver's massive autumn rally has utterly captivated speculators and investors, their appetite for all things silver is insatiable. Interestingly a major driver of this metal's recent surge was stock-market buying of the flagship silver ETF, SLV.