Commodity Update 17 August 2012

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Financial Spreads: Spread Betting and CFD Trading

Commodities Trading: 17 August 2012

In commodities trading, gold has bounced from the fallout of another failed attempt at breaking above $1,630. Buyers will be hoping that we can build on this for yet another attempt to break higher.

Conversely, the bears will be looking to sell at anything north of $1,625, in the hope of a repeat of the last four failures.

The price of gold is currently at $1,617, up from $1,605 yesterday morning.

There is resistance at $1,619/20 before the major barriers between $1,626 and $1,630. On the support side, we have light levels at $1,612/13 and $1,607/8.

Commodities Trading: 16 August 2012

The oil futures market saw some gains yesterday, with the price of a barrel of WTI crude increasing by $1.08 to $94.33. This was mainly driven by a larger-than-expected fall in crude inventories, as indicated by the US Department of Energy.

Another factor buzzing about in the back of financial spread trading investors' minds is the ongoing tension in the Middle East, which is still providing some support.

Bargain hunters flocked to the gold market in yesterday's trade, pushing the price above the psychologically important level of $1,600.0.

It seems that there is still some optimism that the Fed will produce another bout of stimulus, helping to nudge along the pace of economic growth.

News also came to the market that a number of large hedge funds were boosting their holding of the precious metal, adding extra support.

The gold market is currently trading at $1,601.6 this morning.

Commodities Trading: 15 August 2012

Gold saw another dip yesterday, dropping from $1,615 down to $1,590 in a few short minutes.

As with the previous day, the fall was followed by a 50% bounce but prices are now starting to slip once again.

There is support at $1,586/90, but if we have a repeat of the last few rallies/falls, bulls must be wary of a drop to below $1,560.

Over the last month or so, crude oil has been quietly moving higher without getting any headlines or comments. Brent crude oil now stands at $111.80, $23 higher than the June lows.

With GDP numbers apparently stalling, it seems that there must be something going on in the background as prices should not be edging higher on an almost daily basis.

I fear that the answer may lie in supply. We may be finding that the oil producing nations are quietly cutting back on production to maintain a $100+ price.

Commodities Trading: 14 August 2012

Gold rejected the $1,630 level again; in fact it did not get closer than $1,626 this time. The initial pull-back was quite violent, dragging us down to $1,607 in yesterday's session.

Having said that, the buyers have drifted in again to nearly halve the loss and we are currently trading at $1,615.

In truth this is a very difficult call; Friday's activity was an 'outside day' with a 'lower low', a 'higher high' and a higher closing price. This is often an indication of a break out, but yesterday's action may have negated the technical trend.

The medium-term trend (at around three years) remains bearish, but both the very long-term (ten years) and short-term (six month) trends remain bullish.

Whichever way the market goes, someone will be able to say that the gold technical analysis backed the move.

Commodities Trading: 13 August 2012

The gold spread trading market is still seeing fairly quiet trading, but there is the possibility of things becoming more interesting in the near future.

Since mid-May we have been constrained by the $1,630/35 level, with every rally failing to break higher, sometimes quite spectacularly.

With the market now grinding upwards, and currently trading at $1,624, we may see yet another attempt in the near-term.

Dealers will be watching closely for a break, as this could be the trend reversal that opens the way back up to the $1,700 level.

Unfortunately, eyes will be just as peeled for a failure, as the last four attempts have resulted in swift $50 to $90 pull-backs.

Commodities Trading: 10 August 2012

Amid reduced volumes, gold futures moved $4 higher to finish at $1,616. However, if we consider the bigger picture, the precious metal remains locked within the sideways trend witnessed since early June.

It appears that gold investors are unimpressed by slightly better signs for the US economy and are instead waiting for the ''promised'' quantitative easing, be it in Europe or America.

Despite the larger-than-expected drop in US jobless benefits, the energy sector was still searching for direction as WTI crude oil futures hardly changed, closing at $93.36.

It could have been that weak Chinese data, which showed lower industrial production and retail sales, increased concerns of future demand from the world's second biggest consumer.

Commodities Trading: 09 August 2012

As with the previous session, gold investors refused to commit too much yesterday and decided to wait on the sidelines for further developments.

The precious metal has undoubtedly lost some of its appeal lately as the sideways trend around the $1,600 mark is still on. The gold market closed at $1,611.7 yesterday and is currently at $1,615 this morning.

The US Energy Department released its weekly crude oil inventory numbers, showing a larger-than-expected fall of 3.7 million barrels, against estimates for a decline of just 0.5 million barrels.

Despite that bullish report, the US crude oil market finished nearly flat at $93.41. It could be that energy investors took some profits off table after the recent rally.

Commodities Trading: 08 August 2012

In commodities trading, the gold market saw an intraday high of $1,618.4 before settling almost flat at $1,611.1 after the late retracement in the euro.

Recently, the precious metal has attracted buying interest on expectations of extra quantitative easing from the central banks. Nevertheless, investors now seem to be waiting for them to actually deliver, looking rather fed up by so much rhetoric and so little action.

The shares spread trading market continued its advance on better-than-expected earnings, and this provided optimism for the energy sector.

As a result, the price of WTI crude posted another positive session, climbing $1.62 to $93.67 a barrel.

Support also came from hopes of additional stimulus measures and concerns over oil supply disruptions from Hurricane Ernesto.

Commodities Trading: 07 August 2012

It seems that global markets have grown even more dependent on political news than they were at the beginning of the debt crisis. As a result, a day lacking both political and economic news was always likely to see some quiet trading.

Gold was no stranger to that and, despite moving $7.9 higher to $1610.8, volumes were pretty thin on the ground. A slightly lower dollar was probably the largest supportive factor for the price of gold.

In the absence of major announcements regarding economic data or involving the regulators, crude oil resorted to following the usual suspects yesterday.

A weaker US dollar, combined with modestly higher equities, drove Nymex crude oil $0.86 higher to $92.20. However, low volumes were also a dominating feature as many energy investors remained on the sidelines.

Commodities Trading: 06 August 2012

Commodity investors' appetite for risk was revived by the US employment report, which literally saved the week.

Some of that renewed interest was attracted by the precious metals, which pushed gold prices $12.3 higher to $1,601.2 on Friday.

This move was unusual compared to the past as a good figure would usually bring out the sellers of gold, but not this time.

The bigger picture still looks to be a sideways move for the precious metal, swinging around the $1,600.00 mark, and today we sit at $1,604.

Mirroring other world markets, the energy sector received a big boost of confidence once the US announced a bigger increase in its jobs number.

As a result, the price of WTI crude jumped nearly 5%, rising $4.13 to $91.39, as demand for oil remained strong, with more motorists expected to be on the roads.

A weaker dollar, with participants exiting the safe haven currency, added to the rise in black gold.

By Simon Denham, 17 August 2012

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