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Precious Metals Gold prices trading at US$130 premium over platinum

Gold: 1641.00 – down US$40 on the week. The only positive result for gold over the course of last week is that it is still trading at US $130 premium over platinum. Gold has rediscovered its inverse relationship with the US$ and it is now reacting positively and correlates to rises in equities and also with a stronger Euro.
The US$1600 level was not seriously tested but it seems that gold is firmly stuck, for the time being, between U$1600 and US$1695.

We have seen a pick-up in physical buying ahead of Diwali but it has been less than what we expected. I still look for the gold price to rise but this current see-saw action curbs a lot of enthusiasm and conviction out of the market.

Option volatilities midrates:  Gold atm
1 month       28.00 % up       0.75 %
3 month       28.30 % down 0.20 %
6 month       28.75 % down 0.75 %
1 year          29.40 % down 0.60 %
EFP (Exchange for physical) midrate: Gold spot to December Comex: US $ 1.05
ETF: Holdings nearly unchanged at 2326 tons overall
Support: 1585 and 1568       Resistance: 1664 and 1692
OUTLOOK: Neutral