Commodity Update 7 December 2012

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Commodities Trading: 07 December 2012

Gold futures re-gained some of their recent losses yesterday, adding $5 to close up near the $1,700 mark at $1,698.

The buying started after Mario Draghi said that the Eurozone economy was likely to shrink next year, prompting a return to the safe-haven. That probably combined with a bit of short-term profit taking / bargain hunting.

Crude oil futures fell to their lowest level in three weeks yesterday, dropping sharply by $1.6 to close at $86.26.

The fall came as budget negotiations in the US failed to make any progress and the negative European growth forecasts. The Eurozone is now expected to contract by 0.5% compared to the previously expected expansion of 0.4%.



Commodities Trading: 06 December 2012

Gold inched lower yesterday after the previous session's dramatic fall, closing $3 in the red at $1,693.5.

The metal deepened its recent losses as strength in the US dollar hurt sentiment, weighing on commodities.

Despite a bigger-than-expected fall in US crude oil inventories, WTI dipped back below $88 a barrel yesterday, slipping $0.60 to $87.88.

Economic data was strong yesterday, but crude was been dragged lower by a 1.7% drop in gasoline futures, which itself has increasing inventories and decreasing domestic demand.



Commodities Trading: 05 December 2012

Gold suffered from another big day of selling yesterday, slumping $18 to close below the $1,700 mark at $1,697.

Economic uncertainty is partly responsible, but some have blamed heavy fund liquidation and options-related selling for the sharp drop.

The recent rally in crude oil came to an end on Tuesday as the market closed $0.43 lower at $88.50.

Energy investors seemed concerned about the broader economy and so the price of oil dropped back into its recent trading range.

Traders will now await this afternoon's weekly US oil supply data for further direction.



Commodities Trading: 04 December 2012

After breaking below key support levels and closing at $1,715.83 yesterday, gold fell by around 1% this morning to its lowest level in nearly a month.

The market dipped below the $1,700 mark as a stalemate in US fiscal cliff talks dented confidence and weighed on commodities, including other precious metals such as silver.

In the near-term, these talks will continue to dominate investors' focus. However, the sentiment amongst the bulls is that the long-term prospects for gold remain positive.

In fact, some bargain hunters and long-term funds may see a buying opportunity on the expectation of further loose monetary policy in 2013.

Crude oil futures continue to rise, having appreciated another $0.25 yesterday. At one point, the market moved well above the $90 mark, but finally closed at $89.09.

Signs of revived growth in China caused the early rise, but this was offset by poor US manufacturing data, now at a three year low.



Commodities Trading: 03 December 2012

Gold fell by around 0.6% on Friday, closing at $1,713.5, after The Speaker of the House suggested that stalemate was on the cards over the outcome of the US fiscal cliff talks.

Precious metal investors are still nervous as the gold market declined for its second consecutive month in November. It also seems likely that the metal will remain in a trading range of $1,700-50 before we see any clarity in the US.

This morning, gold is edging upwards on the strength of the euro.

The rally in the price of a barrel of crude oil continued at the end of last week, adding $1.25 to finish at $88.91.

The rise wasn't caused by any new news, just increasingly strong sentiment that the US fiscal cliff can be avoided.

In addition, the ongoing tensions and supply risks in the Middle East are helping to support the market.



Commodities Trading: 30 November 2012

After Wednesday's sharp drop, gold prices retraced some of their losses yesterday, gaining $6 to settle at $1,725.

The main reason for the rise seemed to be the precious metal's inverse relationship with the US dollar, as the US currency lost out to its contemporaries.

Crude oil ended its three-day losing streak as strong economic data from the US improved investors' risk appetite.

Mounting tensions in the Middle East, the world's primary source of oil, also supported crude prices, with West Texas Intermediate rising $1.50 and closing above $88 per barrel.



Commodities Trading: 29 November 2012

The gold spread trading market had a torrid time on Wednesday, dropping $22 to end up at $1,719.

The sell-off was blamed on a range of factors, including a stronger US dollar, the expiration of options and futures contracts, and technical selling.

Within one particular five minute period, the precious metal dropped by as much as $20 and more than 2 million ounces of Comex gold futures were traded.

Crude oil fell for a third consecutive day, closing at $86.50 after an $0.80 drop.

Energy investors are expressing concern with the lack of detail regarding Monday's arrangement with Greece and they are worried that US legislators may not be able to side step the fiscal cliff.



Commodities Trading: 28 November 2012

Gold dropped by almost $7 yesterday, settling at $1,741.65, after comments about the fiscal cliff and good US economic numbers lifted the dollar.

The price of gold was also hurt as India, last year's biggest buyer, reduced its demand for the precious metal.

In yesterday's commodities futures trading, crude oil suffered from a second day of falls, closing $0.54 lower at $87.18.

This largely came on the back of forecasts for US crude oil inventories to increase and the apparent lack of progress in the fiscal cliff negotiations.

Interesting, the US crude oil chart now shows that the market has fallen by around 12% in 2012.



Commodities Trading: 27 November 2012

The price of gold closed almost unchanged yesterday, but the precious metal continues to trade at a six week high near the $1,750 level.

Investors had been gaining confidence ahead of the Greek deal so, with that now out the way, there's a little bit of ''buy the rumour, sell the fact'' happening as gold dips back to $1,748.

Crude oil, like many other financial spread trading markets, had remained fairly flat since the Thanksgiving holiday as energy investors waited for news from the Eurozone regarding an agreement to send financial aid to Greece.

Now that the news is out, the move to the upside has not been as explosive as expected, with Brent crude trading flat at $111.



Commodities Trading: 26 November 2012

Gold closed around $20 higher on Friday, settling at $1,752, after the dollar weakened against the euro.

The gold market rallied to its highest level in more than a month, although it is edging lower this morning as profits are being booked and unresolved issues remain.

The focus is now on this week's negotiations between The White House and Congress to avoid the fiscal cliff that could mean a recession for the world's largest economy.

However, even though this risk may increase the precious metals safe haven appeal, it still has to pass certain resistance levels before it can aim for the September 2011 highs of $1,920.

Crude oil futures enjoyed their biggest weekly gain for more than a month, with the January contract closing at $88.28 on Friday.

Strong German business confidence data was responsible for the gain, on expectations that a stronger European economy will increase demand for the fuel.

Protests and unrest in Egypt also added to the rise, as fears mount over supplies.


By Simon Denham, 7 December 2012


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