US gold futures jumped more than 1 percent Monday as a dollar drop against the euro triggered buying in an oversold gold market, traders said. December gold up $11.80 or 1.6 percent at $730.00 an ounce on the COMEX division of the New York Mercantile Exchange at 10:46 am EST (1546 GMT).
Futures traded in a range between $724.10 and $739.50. A bounce in the euro, an oversold market and a sharp gain in silver cited, said COMEX gold options floor trader Jonathan Jossen. Buying of out-of-the money call spreads, and April call options were seen, and volatility dropped, added Jossen.
COMEX gold open interest dropped 1.8 percent to 313,709 lots last week, as net non-commercial length fell to 78,315 lots to 99,202 contracts last week, according to CFTC. A sharp drop of the COMEX open interest signalled more unwinding of long positions as extreme price volatility took a toll on buying sentiment.
Bullion has lost as much as 21 percent of its value in October alone, and is down about 12 percent this year, well below the record high of $1,030.80 struck in March. COMEX estimated 9:00 am volume at 28,613 lots, and options turnover at 783 lots. Spot gold was at $729.85 which was 0.9 percent lower than Friday's close of $723.05. December silver up 16.0 cents or 1.6 percent at $9.89 an ounce.
COMEX estimated 9:00 am volume at 5,411 lots. Spot silver at $9.87 which was up 0.6 percent from Friday's close of $9.81. NYMEX January platinum down $4.50 at $827.10 an ounce. Recession worries hurt platinum, which is mostly seen as an industrial metal used for catalytic converters in cars. Spot platinum fetched $811.00. December palladium up $3.15 or 1.6 percent at $202.70 an ounce. Spot palladium fetched $197.50.
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