Gold opens September with reduced volatility

In the Lead: “Hey, Hey What Can I Do”

September’s first trading session got off to a mixed start in the precious metals’ complex as traders were on hold for the release of US economic data and as they were digesting similar bits of information already in the pipeline from overseas. The overall market tenor is uncertain and is likely to remain so even after tomorrow’s release of US employment statistics and ahead of the extended holiday weekend. Many expect Tuesday to really be the start of “proper” trading action as more and more players who are still out on summer holiday return to their workstations in a rite that resembles another annual event in San Juan Capistrano, CA.

Spot gold dealings opened with a gain of…$1.00 – if you can believe such a number after the past couple of weeks of that market’s gyrations. The $1,830 resistance area (and the more significant one at $1,855 or so) is holding up for the moment but then again so has the $1,775 support one (as well as the far more pivotal one at $1,650), thus far. Spot gold was bid at $1,825.20 the ounce and players were eyeing a rising greenback as well as a small slippage in crude oil and a larger one (1.35%) in copper. More on the commodities’ saga follows below.

Silver added 16 cents to start Thursday’s action at $41.71 per ounce. Resistance in the white metal is currently in place above, near the $41.15 and up to the $43.10 level while the $37 level still presents a pivot point/ cliff-edge situation to be watched as we go forward. Platinum and palladium both gave back a tad in value as they opened for trading this morning. The former sank $4 to ease to the $1,839 level per ounce while the latter declined $5 to start off at $775 per troy ounce.

The ninth month of 2011 (my, how time is fun when you are having fun!) also rolled in amid hopes by market participants that the wall-to-wall volatility and nervousness that defined August might become a distant memory and that September might present a calmer environment within which to try to make a buck of five. However, with the US and European economies still appearing less than robust and with perceptions that a real pick-up in growth may be some months away, at least the commodities’ sector appears to be starting the month off on the back foot.

Not that this is some kind of new, surprise development; the S&P Goldman Sachs Continuous Index of 24 commodities fell 1.7% in August, making for the third such decline in three months. August was also the month in which bonds outperformed commodities as speculators cut back on buying “stuff” in anticipation of the aforementioned slow and possibly contracting economic environment. We are now at a juncture where oil has lost 23% since its $115 peak on May Day and where copper has declined 10% since Valentine’s Day.

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