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Bobbys Corner-Open Market-Oct.10.2012

Good Morning:

A fairly lackluster overnight session-with the majors showing no real activity.

Fitch Ratings commented that the US fiscal cliff, EU crisis, and a potential “hard landing” for the Chinese economy will be
a risk to the global economy.  Thanks-I think we knew that!

Gold margin increase triggers rout

The past week in metals has been one for the record books. Silver dropped by 34 percent in a matter of days, its sharpest drop in 30 years. Gold meanwhile corrected by 20 percent from its peak, which has only happened twice before during the last decade. Copper corrected by one third from the February high as hedge funds reversed their positions into shorts for the first time in more than two years.

Gold begins decline as equities strengthen

Gold is beginning to look more bearish as it drops below its 100 day M/A of 1661.88. It is likely that strong equity markets is lessening the demand for the precious metal. Support should come in at 1550.00, coinciding with the 200 day m/a of 1549.60, which would be a downside target for Xau/Usd.


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