Gold hit following yen intervention

In the Lead: “I Have A Yen [Or A Few Trillion] for You”

Gold, on the other hand, still needs to overcome the $1,775 resistance area in order to maintain its recently reacquired bullish bent. Commodities traders are also paying attention to the trials and tribulations of MF Global Holdings as it has filed for bankruptcy and as its assets might be sold to derivatives trader Interactive Brokers Group. MF’s market positions are sizeable and difficult to value but special attention will be paid to the firm’s exposure to sovereign risk. For the moment, MF Global has been suspended from trading with the NY Fed as a primary dealer.

Platinum and palladium lost ground as well, with the former slumping $38 to the $1,609 per ounce mark and the latter sinking $13 to the $652 level. The speculative positioning reports from the CFTC still do not appear to reflect a whole lot of bullish optimism in the noble metals albeit trading firms continue to see value in them at the $1,550 and at $600 per ounce, respectively. Production costs remain very much an issue in the complex, unlike for gold and for silver (trading from 2 to 3 times and from 7 to 10 times cash costs).

Copper fell more than 3% making last week’s trader-based apprehensions that its best rally since 1986 might soon come to a halt a reality perhaps…a lot sooner than anticipated. Crude oil fell by over 1% while an assortment of base metals lost anywhere from 1.6% (aluminium) to 5.3% (lead). Finally, the Dow lost over 130 points in the initial hour of Monday morning’s trading as October’s hefty “wall of worry” rally appeared to be possibly morphing into what could be November’s “slope of hope” pullback in values.

Today’s early mood was certainly appropriate for tonight’s costumed, house-to-house events to come. The week ahead presents plenty of opportunities for all kinds of market action as it is quite laden with data to come and dominated by the two-day FOMC meeting that starts tomorrow. We will have reports on October’s light vehicle sales (Tue.), the ADP employment gauge (Wed.), ISM’s nonmanufacturing activity metrics (Thu.), and the Labor Department’s US employment roundup (Fri.).

Investors and other market players will certainly not ignore the reports coming from Cannes this week, either. No, we are not talking about the latest red carpet poses of Angelina Jolie or the seaside antics of Johnny Depp here. The G-20 is what meets later this week on the French Riviera, and its agenda is top-heavy with issues such as flagging global growth and everything Greek in flavor.

China has once again come out in support of the EU and its attempts to fix the mess it finds itself in; its President, Hu Jintao said that the Old World has the ability to surmount its current troubles but that his country stands ready to do whatever it can in order to assist “ a friend in need.” China has also been heard as advocating that Europe begin to borrow in Yuan in order to gain possible ‘favors’ from the world’s largest creditor nation. Picture that US Treasury issuing renmimbi-denominated paper; now, there’s a first for world monetary history books!

Tomorrow also marks the end of the “Trichet Era” as far as the ECB is concerned. Mario Draghi takes over as the head of the institution and he takes the seat of that office amid an epic struggle to resolve the European debt situation. Mr. Draghi will take to the microphones following his first ECB rate-setting meeting on Thursday. Like we noted, this will not be a week lacking in potentially market-moving news stories.

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