Gold futures price advanced to a one-month high, extending the longest rally since August, as delays in resolving Europe’s debt crisis spurred demand for the precious metal as a protection of wealth.
Commodity gold for December delivery gained 1.4 percent to settle at $1,723.50 an ounce on the Comex in New York. The four-session rally is the longest since Aug. 22.
Commodity gold for December delivery gained 1.4 percent to settle at $1,723.50 an ounce on the Comex in New York. The four-session rally is the longest since Aug. 22.
Rally for gold price came as investors turned more optimistic about Europe’s plan to recapitalize banks, said Tom Pawlicki, a metals analyst with MF Global in Chicago.
The hopes Europe will be able to keep its sovereign-debt woes under control grew as European Commission President Jose Manuel Barroso on Wednesday outlined the plan.
Gold had tanked in recent weeks as the euro zone’s sovereign-debt concerns grew so intense investors dumped the metal to raise cash and make good on their bets in other investments.
Gold ended lower Tuesday as investors were sidelined ahead of a key vote about Europe’s bailout fund. After gold’s floor trading closed, Slovakia rejected a plan to enhance power of the fund, disrupting attempts to keep the crisis contained.
Another ray of hope for gold came from recent data from the U.S. Commodity Futures Trading Commission. Data Friday showed fund managers have started to modestly move back to gold.
“(Money managers) are buying again,” and numbers, however modest, could foretell a shift in sentiment for gold, Pawlicki said.
CFTC data released late Friday showed managers’s net-long positions, or bets gold will go higher, increasing by more than 5,000. That was only the second increase of net longs in nine weeks, Pawlicki said.
Amid the recent volatility in gold, fund managers liquidated more than 100,000 net-long positions, so the increase is “a drop in a bucket” but a step in the right direction, he added.
Other metals tracked gold higher, with December silver SI1Z +2.41% rising 71 cents, or 2.2%, to $32.71 an ounce. Copper for the same month’s delivery HG1Z +3.01% rose 11 cents, or 3.3%, to $3.40 a pound.
Meanwhile, the dollar index DXY -0.88% , which compares the greenback against a basket of six currencies, fell to 76.951 from 77.549 late Tuesday.
A lower dollar generally helps gold and other commodities as it lowers their price for holders of other currencies, broadening their investment appeal.
Gold for December delivery GC1Z +1.20% added $20.50, or 1.2%, to $1,681.40 an ounce on the Comex division of the New York Mercantile Exchange. It had earlier traded as high as $1,693.90 an ounce and as low as $1,662 an ounce.
The hopes Europe will be able to keep its sovereign-debt woes under control grew as European Commission President Jose Manuel Barroso on Wednesday outlined the plan.
Gold had tanked in recent weeks as the euro zone’s sovereign-debt concerns grew so intense investors dumped the metal to raise cash and make good on their bets in other investments.
Gold ended lower Tuesday as investors were sidelined ahead of a key vote about Europe’s bailout fund. After gold’s floor trading closed, Slovakia rejected a plan to enhance power of the fund, disrupting attempts to keep the crisis contained.
Another ray of hope for gold came from recent data from the U.S. Commodity Futures Trading Commission. Data Friday showed fund managers have started to modestly move back to gold.
“(Money managers) are buying again,” and numbers, however modest, could foretell a shift in sentiment for gold, Pawlicki said.
CFTC data released late Friday showed managers’s net-long positions, or bets gold will go higher, increasing by more than 5,000. That was only the second increase of net longs in nine weeks, Pawlicki said.
Amid the recent volatility in gold, fund managers liquidated more than 100,000 net-long positions, so the increase is “a drop in a bucket” but a step in the right direction, he added.
Other metals tracked gold higher, with December silver SI1Z +2.41% rising 71 cents, or 2.2%, to $32.71 an ounce. Copper for the same month’s delivery HG1Z +3.01% rose 11 cents, or 3.3%, to $3.40 a pound.
Meanwhile, the dollar index DXY -0.88% , which compares the greenback against a basket of six currencies, fell to 76.951 from 77.549 late Tuesday.
A lower dollar generally helps gold and other commodities as it lowers their price for holders of other currencies, broadening their investment appeal.
Gold for December delivery GC1Z +1.20% added $20.50, or 1.2%, to $1,681.40 an ounce on the Comex division of the New York Mercantile Exchange. It had earlier traded as high as $1,693.90 an ounce and as low as $1,662 an ounce.
Gold as mining commodity and agriculture commodities like sugar, corn and soybean climb, while copper trader most bullish on speculation price at one year low. Copper to rise next week and 5 predicted a drop, the most bullish reading in six weeks. It’s the first time in four weeks that the separate surveys forecast gains for all five commodities.
Copper slumped to a 14-month low on Oct. 3 as commodities slid on concern that demand may wane as economies slow. Diego Hernandez, chief executive officer of Codelco, the world’s largest copper producer, said the next day that China should take advantage of the slump to restock. In 2008, during the worst global recession since World War II, China’s copper demand still jumped 4.9 percent, according to Morgan Stanley.
“The market has overshot, leaving prices more negative than the risks to growth imply,” said Nic Brown, head of commodities research at Natixis Commodity Markets Ltd. in London. “It’s likely to be choppy for a while, but looking back this will probably be seen as a good buying opportunity.”
The three-month contract for copper traded at $7,360 a metric ton today on the London Metal Exchange, cutting its loss this year to 23 percent, heading for its second-worst year in almost a quarter century. Prices dropped 54 percent in 2008. Gold futures were at $1,653.80 an ounce on the Comex in New York, for a 16 percent gain this year. Raw sugar in New York slipped 21 percent this year to 25.35 cents a pound. Corn has fallen 4.4 percent to $6.0125 a bushel and soybeans declined 17 percent to $11.635 a bushel in Chicago.
Gold is the best performer this year in the Standard & Poor’s GSCI Index of 24 commodities, which slipped 3.8 percent in 2011 and this week touched a 10-month low. The MSCI All- Country World Index of equities plunged on Oct. 4 to the lowest since July 2010 and is down 13 percent this year. Treasuries returned 8.6 percent since December, a Bank of America Corp. index shows.
Copper’s plunge this week took its 14-day relative-strength index to about 20, below a level of 30 that indicates to some investors who study technical charts that price gains may be imminent. The metal will average between $7,000 and $9,000 a ton next year, according to 55 percent of those attending an LME conference on Oct. 3. As many as 5,000 merchants were in the city this week for the exchange’s annual event for talks on metals markets and supply contracts.
The industrial metal is up 4.9 percent this week, while gold has gained 1.9 percent. Bullion has plunged 14 percent from a record $1,923.70 set a month ago as some investors sold the metal to cover losses in other markets. UBS AG this week said physical demand for bullion was “very strong.”
Sugar is little changed this week and fell to a three- month low in September on speculation supplies would improve with the start of the harvest in the Northern Hemisphere.
Corn fell 23 percent in September on concern slower growth would curb demand for grains and as the U.S. Department of Agriculture estimated inventories that were 20 percent higher than forecast by analysts in a Bloomberg survey. Soybeans fell to the lowest in almost a year on Oct. 4.
The risk to commodities, particularly industrial metals, is slowing economic growth. The Bank of England yesterday expanded its bond-purchase plan for the first time in almost two years as government budget cuts and Europe’s debt crisis jeopardize Britain’s economic recovery. German factory orders unexpectedly fell for a second month in August and Standard Bank Plc estimates the likelihood of another recession in Europe and the U.S. at greater than 50 percent.
Copper dropped 28 percent from a record $10,190 in February. Goldman Sachs Group Inc., Barclays Capital and Standard Bank cut their forecasts since last week.
“We believe that policy risk, especially in Europe, remains elevated, and the current cyclical slowdown is much more pronounced,” Walter de Wet, a Standard Bank analyst in London, said in a report e-mailed yesterday. “We therefore do not expect much upside yet for most commodities. We would look to sell base metals into rallies rather than worry, just yet, about missing a potential dip/entry point for metals such as copper.”
Concern about slowing growth and debt woes may boost demand for gold as a protection of wealth. Bullion’s in the 11th year of a bull market as governments and central banks cut borrowing costs and spent trillions of dollars to aid economies. Federal Reserve Chairman Ben S. Bernanke this week signaled willingness to step up measures to spur U.S. growth. While the Fed has no immediate plans for another round of large-scale asset purchases, it doesn’t take “anything off the table,” he said.
The Diwali religious festival later this month in India, the biggest bullion buyer, and then the traditional wedding season may increase demand. The slump to near $1,600 is attracting physical buyers “eager to pre-empt the scramble for metal at the last minute,” Edel Tully, London-based analyst at UBS, said yesterday in a report.
Sugar production in Brazil, the world’s largest producer, may be lower than initially estimated as mills are running out of cane, Newedge Group SA said in a report e-mailed Oct. 5. Cane output in the nation will fall for the first time in 10 years, according to industry group Unica, as unfavorable weather lowers yields. The harvesting season in the Center South usually lasts until December.
Soybean prices may rebound on increased demand for cheaper U.S. supplies as farmers in Brazil and Argentina, the two biggest exporters, plant less of the crop this year. The USDA will update its forecasts of U.S. production and global demand on Oct. 12 for corn and soybeans. U.S. corn exports in the last week of September were twice what exporters sold a year earlier and ethanol production jumped 2.6 percent from a week earlier.
The S&P GSCI Enhanced Commodity Index will rise 20 percent in 12 months, led by industrial metals, energy and precious metals, Jeffrey Currie, an analyst at Goldman in London, wrote in a report on Oct. 4.
“The events of 2007-08 showed us that emerging market economies, and by extension the world economy, can be relatively resilient to a slowdown in developed market economies,” Currie wrote. “If we can avoid a financial crisis, we can avoid a global recession and repeat of 2008.”
Copper survey results: Bullish: 10 Bearish: 5 Hold: 0
Gold survey results: Bullish: 20 Bearish: 5 Hold: 3
Corn survey results: Bullish: 19 Bearish: 7 Hold: 2
Soybean survey results: Bullish: 19 Bearish: 7 Hold: 2
Raw sugar survey results: Bullish: 5 Bearish: 2 Hold: 4
White sugar survey results: Bullish: 6 Bearish: 1 Hold 4
White sugar premium results: Widen: 1 Narrow: 3 Neutral: 7
Copper slumped to a 14-month low on Oct. 3 as commodities slid on concern that demand may wane as economies slow. Diego Hernandez, chief executive officer of Codelco, the world’s largest copper producer, said the next day that China should take advantage of the slump to restock. In 2008, during the worst global recession since World War II, China’s copper demand still jumped 4.9 percent, according to Morgan Stanley.
“The market has overshot, leaving prices more negative than the risks to growth imply,” said Nic Brown, head of commodities research at Natixis Commodity Markets Ltd. in London. “It’s likely to be choppy for a while, but looking back this will probably be seen as a good buying opportunity.”
The three-month contract for copper traded at $7,360 a metric ton today on the London Metal Exchange, cutting its loss this year to 23 percent, heading for its second-worst year in almost a quarter century. Prices dropped 54 percent in 2008. Gold futures were at $1,653.80 an ounce on the Comex in New York, for a 16 percent gain this year. Raw sugar in New York slipped 21 percent this year to 25.35 cents a pound. Corn has fallen 4.4 percent to $6.0125 a bushel and soybeans declined 17 percent to $11.635 a bushel in Chicago.
Gold is the best performer this year in the Standard & Poor’s GSCI Index of 24 commodities, which slipped 3.8 percent in 2011 and this week touched a 10-month low. The MSCI All- Country World Index of equities plunged on Oct. 4 to the lowest since July 2010 and is down 13 percent this year. Treasuries returned 8.6 percent since December, a Bank of America Corp. index shows.
Copper’s plunge this week took its 14-day relative-strength index to about 20, below a level of 30 that indicates to some investors who study technical charts that price gains may be imminent. The metal will average between $7,000 and $9,000 a ton next year, according to 55 percent of those attending an LME conference on Oct. 3. As many as 5,000 merchants were in the city this week for the exchange’s annual event for talks on metals markets and supply contracts.
The industrial metal is up 4.9 percent this week, while gold has gained 1.9 percent. Bullion has plunged 14 percent from a record $1,923.70 set a month ago as some investors sold the metal to cover losses in other markets. UBS AG this week said physical demand for bullion was “very strong.”
Sugar is little changed this week and fell to a three- month low in September on speculation supplies would improve with the start of the harvest in the Northern Hemisphere.
Corn fell 23 percent in September on concern slower growth would curb demand for grains and as the U.S. Department of Agriculture estimated inventories that were 20 percent higher than forecast by analysts in a Bloomberg survey. Soybeans fell to the lowest in almost a year on Oct. 4.
The risk to commodities, particularly industrial metals, is slowing economic growth. The Bank of England yesterday expanded its bond-purchase plan for the first time in almost two years as government budget cuts and Europe’s debt crisis jeopardize Britain’s economic recovery. German factory orders unexpectedly fell for a second month in August and Standard Bank Plc estimates the likelihood of another recession in Europe and the U.S. at greater than 50 percent.
Copper dropped 28 percent from a record $10,190 in February. Goldman Sachs Group Inc., Barclays Capital and Standard Bank cut their forecasts since last week.
“We believe that policy risk, especially in Europe, remains elevated, and the current cyclical slowdown is much more pronounced,” Walter de Wet, a Standard Bank analyst in London, said in a report e-mailed yesterday. “We therefore do not expect much upside yet for most commodities. We would look to sell base metals into rallies rather than worry, just yet, about missing a potential dip/entry point for metals such as copper.”
Concern about slowing growth and debt woes may boost demand for gold as a protection of wealth. Bullion’s in the 11th year of a bull market as governments and central banks cut borrowing costs and spent trillions of dollars to aid economies. Federal Reserve Chairman Ben S. Bernanke this week signaled willingness to step up measures to spur U.S. growth. While the Fed has no immediate plans for another round of large-scale asset purchases, it doesn’t take “anything off the table,” he said.
The Diwali religious festival later this month in India, the biggest bullion buyer, and then the traditional wedding season may increase demand. The slump to near $1,600 is attracting physical buyers “eager to pre-empt the scramble for metal at the last minute,” Edel Tully, London-based analyst at UBS, said yesterday in a report.
Sugar production in Brazil, the world’s largest producer, may be lower than initially estimated as mills are running out of cane, Newedge Group SA said in a report e-mailed Oct. 5. Cane output in the nation will fall for the first time in 10 years, according to industry group Unica, as unfavorable weather lowers yields. The harvesting season in the Center South usually lasts until December.
Soybean prices may rebound on increased demand for cheaper U.S. supplies as farmers in Brazil and Argentina, the two biggest exporters, plant less of the crop this year. The USDA will update its forecasts of U.S. production and global demand on Oct. 12 for corn and soybeans. U.S. corn exports in the last week of September were twice what exporters sold a year earlier and ethanol production jumped 2.6 percent from a week earlier.
The S&P GSCI Enhanced Commodity Index will rise 20 percent in 12 months, led by industrial metals, energy and precious metals, Jeffrey Currie, an analyst at Goldman in London, wrote in a report on Oct. 4.
“The events of 2007-08 showed us that emerging market economies, and by extension the world economy, can be relatively resilient to a slowdown in developed market economies,” Currie wrote. “If we can avoid a financial crisis, we can avoid a global recession and repeat of 2008.”
Copper survey results: Bullish: 10 Bearish: 5 Hold: 0
Gold survey results: Bullish: 20 Bearish: 5 Hold: 3
Corn survey results: Bullish: 19 Bearish: 7 Hold: 2
Soybean survey results: Bullish: 19 Bearish: 7 Hold: 2
Raw sugar survey results: Bullish: 5 Bearish: 2 Hold: 4
White sugar survey results: Bullish: 6 Bearish: 1 Hold 4
White sugar premium results: Widen: 1 Narrow: 3 Neutral: 7
Gold for December delivery closed up $11.60 at $1,653.20 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,656.80 and as low as $1,633.20 an ounce, while the spot gold price was up $8.40.
There's no doubt gold moving alongside stocks was a puzzlement for many experts as the two typically have an inverse relationship.
"Gold's unusual behavior at present can be explained by events on the futures market," wrote Commerzbank in a note. When stocks rally, investors have less need to liquidate assets like gold. But Commerzbank said there are still a lot of speculative long positions in the gold market, which investors might sell if prices rise. As profit-taking weighs on gold, then physical buyers will re-enter the market.
"This pattern is likely to mean the price of gold fluctuating for quite some time within a broad sideways range before a new upturn begins," Commerzbank said.
A new trend might be hard to find this week with investors focusing on the death of Apple(AAPL) co-founder, Steve Jobs, as well as two interest rate decisions from the European Central Bank and Bank of England Thursday and Friday's reading on employment in theU.S.
Briefing.com expects the private sector to have added 90,000 jobs in September after adding only 17,000 in August. A better reading could boost equities and help markets rally, which might push gold higher as there is less need to sell. Of course, the opposite could be true as well -- a positive jobs number could give investors less of a reason to own the safe haven.
A bad number, on the flip side, could either help gold shine as a safe haven or could prompt more forced liquidation.
Jeff Clark, Casey Research's senior precious metals analyst, said, "When the market falls I think that investors will seek out liquidity and they will use an easily tradeable gold position to do that."
ButClarkargued that this volatile and confusing time for gold is really a tiny blip on its long-term trajectory.
"Debt is still crushing most of the developed world .... [and] real interest rates are still negative," he said. The real interest rate is the interest rate minus the inflation rate.
Comex December gold futures prices ended theU.S.day session modestly higher Thursday, on some follow-through buying strength from the solid gains posted on Wednesday and on some more bargain-hunting buying interest. The gold market continues to consolidate recent choppy day-to-day trading activity. December gold last traded up $10.30 an ounce at $1,651.90 an ounce. Spot gold last traded up $7.60 an ounce at $1,650.75. December Comex silver last traded up $1.578 at $31.93 an ounce.
Traders are looking ahead to Friday morning’s keyU.S.employment report. The important non-farm payroll figure in the report is seen coming in at up 60,000. Look for more active trading in many markets, including the precious metals, in the immediate aftermath of the jobs report.
U.S.and European stock markets were firmer again Thursday due to some investor optimism regarding developments coming out of the European Union and its sovereign debt crisis. There were reports this week that EU monetary officials are working to shore up the weak European banking sector–in caseGreeceshould actually default on its debt obligations in the near term. The world stock markets are also starting to focus on other matters and have mostly factored into prices the messy EU debt situation. Still, the EU debt crisis continues to be a major underlying bullish factor for the gold market.
The U.S. dollar index traded weaker by the end of the day Thursday, and that supported some fresh buying interest in the precious metals. The dollar index bulls still have the solid overall near-term technical advantage, however, which has been an underlying bearish factor for the precious metals recently.
Crude oil futures prices traded solidly higher again Thursday, on more short covering. Crude oil bulls have gained fresh upside technical momentum, which is also bullish for the precious metals. The past two sessions’ price action in crude begin to suggest a near-term low in crude was put in place this week. If so, that would be an underlying bullish factor for the precious metals.
TheLondonP.M. gold fixing was $1,635.00 versus the previous P.M. fixing of $1,617.00.
Technically, December gold futures prices closed near the session high Thursday. Gold market bears still have the slight near-term technical advantage. A bearish pennant pattern has formed on the daily bar chart. Prices are also still in a four-week-old downtrend on the daily bar chart. Bulls’ next upside technical objective is to produce a close above solid technical resistance at $1,705.40. Bears’ next near-term downside price objective is closing prices below strong technical support at the September low of $1,535.00. First resistance is seen at Thursday’s high of $1,656.80 and then at this week’s high of $1,681.50. First support is seen at Thursday’s low of $1,633.20 and then at $1,625.00.Wyckoff’s Market Rating: 4.5.
December silver futures prices closed near the session high again Thursday. The key “outside markets” were bullish for silver, as the U.S. dollar index was lower and crude oil prices were solidly higher. Silver prices are still in a six-week-old downtrend on the daily bar chart. A bearish pennant pattern has also formed on the daily bar chart for silver. Silver bulls’ next upside price objective is producing a close above strong technical resistance at last week’s high of $33.585 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the September low of $26.15. First resistance is seen at Thursday’s high of $32.07 and then at $32.50. Next support is seen at $31.50 and then at $31.00.Wyckoff’s Market Rating: 4.5.
December N.Y. copper closed up 1,515 points 325.75 cents Thursday. Prices closed near the session high and saw more short covering in a bear market. The key “outside markets” were again bullish for copper Thursday, as the U.S. dollar index was lower and crude oil prices were solid higher. Still, serious near-term chart damage has occurred in copper recently. Copper bears still have the overall near-term technical advantage as a two-month-old downtrend is in place on the daily bar chart. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at 350.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 300.00 cents. First resistance is seen at Thursday’s high of 327.20 cents and then at 330.00 cents. First support is seen at 322.500 cents and then at 320.00 cents.Wyckoff’s Market Rating: 2.5.
There's no doubt gold moving alongside stocks was a puzzlement for many experts as the two typically have an inverse relationship.
"Gold's unusual behavior at present can be explained by events on the futures market," wrote Commerzbank in a note. When stocks rally, investors have less need to liquidate assets like gold. But Commerzbank said there are still a lot of speculative long positions in the gold market, which investors might sell if prices rise. As profit-taking weighs on gold, then physical buyers will re-enter the market.
"This pattern is likely to mean the price of gold fluctuating for quite some time within a broad sideways range before a new upturn begins," Commerzbank said.
A new trend might be hard to find this week with investors focusing on the death of Apple(AAPL) co-founder, Steve Jobs, as well as two interest rate decisions from the European Central Bank and Bank of England Thursday and Friday's reading on employment in theU.S.
Briefing.com expects the private sector to have added 90,000 jobs in September after adding only 17,000 in August. A better reading could boost equities and help markets rally, which might push gold higher as there is less need to sell. Of course, the opposite could be true as well -- a positive jobs number could give investors less of a reason to own the safe haven.
A bad number, on the flip side, could either help gold shine as a safe haven or could prompt more forced liquidation.
Jeff Clark, Casey Research's senior precious metals analyst, said, "When the market falls I think that investors will seek out liquidity and they will use an easily tradeable gold position to do that."
ButClarkargued that this volatile and confusing time for gold is really a tiny blip on its long-term trajectory.
"Debt is still crushing most of the developed world .... [and] real interest rates are still negative," he said. The real interest rate is the interest rate minus the inflation rate.
Comex December gold futures prices ended theU.S.day session modestly higher Thursday, on some follow-through buying strength from the solid gains posted on Wednesday and on some more bargain-hunting buying interest. The gold market continues to consolidate recent choppy day-to-day trading activity. December gold last traded up $10.30 an ounce at $1,651.90 an ounce. Spot gold last traded up $7.60 an ounce at $1,650.75. December Comex silver last traded up $1.578 at $31.93 an ounce.
Traders are looking ahead to Friday morning’s keyU.S.employment report. The important non-farm payroll figure in the report is seen coming in at up 60,000. Look for more active trading in many markets, including the precious metals, in the immediate aftermath of the jobs report.
U.S.and European stock markets were firmer again Thursday due to some investor optimism regarding developments coming out of the European Union and its sovereign debt crisis. There were reports this week that EU monetary officials are working to shore up the weak European banking sector–in caseGreeceshould actually default on its debt obligations in the near term. The world stock markets are also starting to focus on other matters and have mostly factored into prices the messy EU debt situation. Still, the EU debt crisis continues to be a major underlying bullish factor for the gold market.
The U.S. dollar index traded weaker by the end of the day Thursday, and that supported some fresh buying interest in the precious metals. The dollar index bulls still have the solid overall near-term technical advantage, however, which has been an underlying bearish factor for the precious metals recently.
Crude oil futures prices traded solidly higher again Thursday, on more short covering. Crude oil bulls have gained fresh upside technical momentum, which is also bullish for the precious metals. The past two sessions’ price action in crude begin to suggest a near-term low in crude was put in place this week. If so, that would be an underlying bullish factor for the precious metals.
TheLondonP.M. gold fixing was $1,635.00 versus the previous P.M. fixing of $1,617.00.
Technically, December gold futures prices closed near the session high Thursday. Gold market bears still have the slight near-term technical advantage. A bearish pennant pattern has formed on the daily bar chart. Prices are also still in a four-week-old downtrend on the daily bar chart. Bulls’ next upside technical objective is to produce a close above solid technical resistance at $1,705.40. Bears’ next near-term downside price objective is closing prices below strong technical support at the September low of $1,535.00. First resistance is seen at Thursday’s high of $1,656.80 and then at this week’s high of $1,681.50. First support is seen at Thursday’s low of $1,633.20 and then at $1,625.00.Wyckoff’s Market Rating: 4.5.
December silver futures prices closed near the session high again Thursday. The key “outside markets” were bullish for silver, as the U.S. dollar index was lower and crude oil prices were solidly higher. Silver prices are still in a six-week-old downtrend on the daily bar chart. A bearish pennant pattern has also formed on the daily bar chart for silver. Silver bulls’ next upside price objective is producing a close above strong technical resistance at last week’s high of $33.585 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the September low of $26.15. First resistance is seen at Thursday’s high of $32.07 and then at $32.50. Next support is seen at $31.50 and then at $31.00.Wyckoff’s Market Rating: 4.5.
December N.Y. copper closed up 1,515 points 325.75 cents Thursday. Prices closed near the session high and saw more short covering in a bear market. The key “outside markets” were again bullish for copper Thursday, as the U.S. dollar index was lower and crude oil prices were solid higher. Still, serious near-term chart damage has occurred in copper recently. Copper bears still have the overall near-term technical advantage as a two-month-old downtrend is in place on the daily bar chart. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at 350.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 300.00 cents. First resistance is seen at Thursday’s high of 327.20 cents and then at 330.00 cents. First support is seen at 322.500 cents and then at 320.00 cents.Wyckoff’s Market Rating: 2.5.
Gold is inching lower overnight as the market-wide correction in post-FOMC moves seemingly begins to lose momentum. The upcoming speech from Ben Bernanke is likely to be the most market-moving bit of information to hit the tape over the coming 24 hours. Any clues alluding to the possibility that policymakers may yet opt to resume increasing the balance sheet in the event that growth remains disappointing are likely to stoke the yellow metal higher, while a strong indication that the Fed has moved on to other options would have the opposite effect.
Gold price on the technical front, near-term support and resistance levels remain at $1624.09 and $1680.78, the 23.6% and 38.2% Fibonacci retracements respectively. A break lower exposes $1589.14. Gold is inching lower overnight as the market-wide correction in post-FOMC moves seemingly begins to lose momentum.
The upcoming speech from Ben Bernanke is likely to be the most market-moving bit of information to hit the tape over the coming 24 hours. Any clues alluding to the possibility that policymakers may yet opt to resume increasing the balance sheet in the event that growth remains disappointing are likely to stoke the yellow metal higher, while a strong indication that the Fed has moved on to other options would have the opposite effect. On the technical front, near-term support and resistance levels remain at $1624.09 and $1680.78, the 23.6% and 38.2% Fibonacci retracements respectively. A break lower exposes $1589.14.
Gold price on the technical front, near-term support and resistance levels remain at $1624.09 and $1680.78, the 23.6% and 38.2% Fibonacci retracements respectively. A break lower exposes $1589.14. Gold is inching lower overnight as the market-wide correction in post-FOMC moves seemingly begins to lose momentum.
The upcoming speech from Ben Bernanke is likely to be the most market-moving bit of information to hit the tape over the coming 24 hours. Any clues alluding to the possibility that policymakers may yet opt to resume increasing the balance sheet in the event that growth remains disappointing are likely to stoke the yellow metal higher, while a strong indication that the Fed has moved on to other options would have the opposite effect. On the technical front, near-term support and resistance levels remain at $1624.09 and $1680.78, the 23.6% and 38.2% Fibonacci retracements respectively. A break lower exposes $1589.14.
Gold, platinum and Brent oil will lead gains in commodities as investors seek to protect their assets and shortages emerge, according to Tony Hall, the hedge- fund manager who earned 33 percent for his clients this year.
Gold may climb 21 percent to a record $2,200 an ounce by the end of 2011, platinum may gain 10 percent and Brent could rise 25 percent to $140 a barrel in six months, said the London- based chief investment officer of Duet Commodities Fund Ltd., which manages more than $100 million of assets. Its eight-month gain compares with a mean return of 0.6 percent across commodity hedge funds tracked by HedgeFund.net and beat larger rivals such as Clive Capital LLP and Fortress Commodities Offshore Fund Ltd.
“The fear of recession, the fear of worse economic numbers is weighing on commodities and stopping gains from fundamentals from coming through,” said Hall, 31, who spars as a heavyweight boxer. “We still believe in the gold story. If you believe the world is in trouble or in further economic growth disruption, then gold is a good safe haven. If you believe that the world is going to come out okay, then it’s a good inflation hedge.”
At a time when the MSCI All-Country World Index of global equities declined 10 percent this year, the Standard & Poor’s GSCI measure of 24 commodities advanced 2.7 percent, led by silver, gold and energy.
Investors held about $431 billion in raw materials by July, an almost fivefold gain in six years, Barclays Capital says. As equity holders contend with losses of $8.5 trillion since May, speculators made their biggest wagers on higher commodity prices in almost three months in the week to Sept. 6 as they anticipated that even weaker economic growth will mean shortages.
Winning Run
Gold advanced 28 percent to $1,819.88 this year, heading for an 11th consecutive annual gain, the longest winning streak in at least nine decades. It’s the second-best performer in the S&P GSCI behind silver, which rose 31 percent. Gold is trading at 45 times the price of silver, down from a multiple of 84 in 2008. Silver, the precious metal most used in industry, rose more than threefold to $40.4338 since the end of that year.
The gold price of $2,200 predicted by Hall would be 15 percent more than the all-time high of $1,921.15 reached Sept. 6. It would still be below the then-record $850 reached in 1980, equal to $2,337 now in inflation-adjusted terms. Bullion had tumbled 5.7 percent from its all-time high by Sept. 16.
Central banks are expanding their gold reserves for the first time in a generation. Euro-area nations added 0.8 metric ton to their holdings this year, the first increase since 2001, International Monetary Fund data show. Central banks and government institutions worldwide bought 192.3 tons in the first half, according to the World Gold Council.
Arno Pilz
“I’d say gold will have a very good run higher, and a very good retracement would be justified,” Hall said. “If we see a retracement back to $1,700, I think at that point would be a good opportunity to get in.”
Gold and platinum-group metals, used mostly in jewelry and catalytic converters for cars, were the best performers for Duet in the past two months, said Hall, who has traded commodities for about a decade. The fund also profited from betting against silver in May and June, he said. Silver futures traded on the Comex exchange in New York fell from $49.845 an ounce on April 25 to as low as $32.30 on May 12.
That trading idea came from Arno Pilz, 42, who founded the fund with Hall in July 2010. The former head of metals trading at Lehman Brothers Holdings Inc. oversees the fund’s investments in precious and industrial metals while Hall runs the energy trades. They plan to add an agricultural specialist in second- half 2012 at the earliest and cap total assets at $1 billion.
Clive Capital
Pilz, who has traded metals since 1999, has a Master of Philosophy degree in management studies from Oxford University’s Templeton College. He makes his own cider and salami and is building a 1:2 scale Land Rover for his two daughters.
Hall and Pilz beat larger rivals including Clive Capital, which oversees $4.8 billion and fell 11 percent this year, and the $1.1 billion Fortress Commodities Offshore Fund, which returned about 1.8 percent, according to people with direct knowledge of the funds’ performance.
Duet’s best trade was on Brent crude in the second quarter, Hall said. The contract, traded on ICE Futures Europe in London, gained as much as 34 percent this year as fighting erupted in Libya, which has Africa’s largest oil reserves. The disruption to supplies of light crudes, which yield a higher proportion of more profitable products including gasoline, increased demand for similar grades such as Brent.
‘New Highs’
Brent costs about $24.59 a barrel more than the West Texas Intermediate grade traded on the New York Mercantile Exchange, a global benchmark, up from about parity in 2009. The premium dropped from $25.93 on Sept. 6 after a 600,000-barrel cargo of Libyan crude was offered for shipment, a sign exports may resume, said three people with direct knowledge of the transaction.
Brent slumped 12 percent to $111.81 a barrel since early April because of concern that slower economic growth will curb demand for energy. The Paris-based International Energy Agency cut global oil demand forecasts for this year by 200,000 barrels a day and 400,000 a day for 2012 on Sept. 13, and said stockpiles in developed nations fell to below the five-year average for the first time since the global recession in 2008.
“Eventually the crude fundamentals will come through and become the dominant factor,” said Hall, who holds an economics degree from University of Bath. “We are going to see new highs in Brent over the next six months.”
More than half Duet’s commodity book is expressed through options, with crude and precious metals positions concentrated in periods three to six months ahead, said Hall, who previously worked for Credit Suisse Group AG and Deutsche Bank AG.
Gasoil Cracks
Fuel was also the fund’s worst trade, on a view concerning price differentials of gasoil and other products.
“Energy relative value has been the most disappointing part of the portfolio this year, with our view that middle distillates would outperform other products,” he said.
The so-called cracks, reflecting the spread between the price of the refined product and crude, slumped 29 percent since peaking at $24.17 a barrel on March 16, according to data from PVM Oil Associates, a London-based brokerage. Gasoil is typically used as a heating fuel.
Speculators held 1.275 million net-long futures and options across 18 commodities tracked by the U.S. Commodity Futures Trading Commission in the week ended Sept. 6, the most since the week ended June 14, data compiled by Bloomberg show. They had raised that combined position for four consecutive weeks. They cut their bullish bets by 5.2 percent in the latest week.
Platinum Bull
Duet is also bullish on platinum, which gained 2.3 percent to $1,810.38 an ounce this year. The metal, mined mostly in South Africa, will trade as high as $2,000 to $2,200 this year, Hall said. Holdings in exchange-traded products backed by the commodity are at a near-record 44.3 tons, valued at about $2.6 billion, data compiled by Bloomberg show.
Platinum is trading at a ratio of 2.5 times the price of palladium, compared with a 10-year average of 3.5. The metals are mined together and both are used in autocatalysts.
Platinum supply will fall 21,000 ounces short of demand this year, widening to a deficit of 54,000 ounces in 2012, Barclays Capital estimates. Mining companies are going as deep as 1.4 miles underground to maintain output, pumping chilled air down mine shafts to cool seams as hot as 160 degrees Fahrenheit.
“Platinum looks like great value in the precious metals complex,” Hall said. “Platinum is a store of value, a precious metal and an industrial metal. If the economy picks up we’re going to see bigger demand in catalytic converters.”
Gold may climb 21 percent to a record $2,200 an ounce by the end of 2011, platinum may gain 10 percent and Brent could rise 25 percent to $140 a barrel in six months, said the London- based chief investment officer of Duet Commodities Fund Ltd., which manages more than $100 million of assets. Its eight-month gain compares with a mean return of 0.6 percent across commodity hedge funds tracked by HedgeFund.net and beat larger rivals such as Clive Capital LLP and Fortress Commodities Offshore Fund Ltd.
“The fear of recession, the fear of worse economic numbers is weighing on commodities and stopping gains from fundamentals from coming through,” said Hall, 31, who spars as a heavyweight boxer. “We still believe in the gold story. If you believe the world is in trouble or in further economic growth disruption, then gold is a good safe haven. If you believe that the world is going to come out okay, then it’s a good inflation hedge.”
At a time when the MSCI All-Country World Index of global equities declined 10 percent this year, the Standard & Poor’s GSCI measure of 24 commodities advanced 2.7 percent, led by silver, gold and energy.
Investors held about $431 billion in raw materials by July, an almost fivefold gain in six years, Barclays Capital says. As equity holders contend with losses of $8.5 trillion since May, speculators made their biggest wagers on higher commodity prices in almost three months in the week to Sept. 6 as they anticipated that even weaker economic growth will mean shortages.
Winning Run
Gold advanced 28 percent to $1,819.88 this year, heading for an 11th consecutive annual gain, the longest winning streak in at least nine decades. It’s the second-best performer in the S&P GSCI behind silver, which rose 31 percent. Gold is trading at 45 times the price of silver, down from a multiple of 84 in 2008. Silver, the precious metal most used in industry, rose more than threefold to $40.4338 since the end of that year.
The gold price of $2,200 predicted by Hall would be 15 percent more than the all-time high of $1,921.15 reached Sept. 6. It would still be below the then-record $850 reached in 1980, equal to $2,337 now in inflation-adjusted terms. Bullion had tumbled 5.7 percent from its all-time high by Sept. 16.
Central banks are expanding their gold reserves for the first time in a generation. Euro-area nations added 0.8 metric ton to their holdings this year, the first increase since 2001, International Monetary Fund data show. Central banks and government institutions worldwide bought 192.3 tons in the first half, according to the World Gold Council.
Arno Pilz
“I’d say gold will have a very good run higher, and a very good retracement would be justified,” Hall said. “If we see a retracement back to $1,700, I think at that point would be a good opportunity to get in.”
Gold and platinum-group metals, used mostly in jewelry and catalytic converters for cars, were the best performers for Duet in the past two months, said Hall, who has traded commodities for about a decade. The fund also profited from betting against silver in May and June, he said. Silver futures traded on the Comex exchange in New York fell from $49.845 an ounce on April 25 to as low as $32.30 on May 12.
That trading idea came from Arno Pilz, 42, who founded the fund with Hall in July 2010. The former head of metals trading at Lehman Brothers Holdings Inc. oversees the fund’s investments in precious and industrial metals while Hall runs the energy trades. They plan to add an agricultural specialist in second- half 2012 at the earliest and cap total assets at $1 billion.
Clive Capital
Pilz, who has traded metals since 1999, has a Master of Philosophy degree in management studies from Oxford University’s Templeton College. He makes his own cider and salami and is building a 1:2 scale Land Rover for his two daughters.
Hall and Pilz beat larger rivals including Clive Capital, which oversees $4.8 billion and fell 11 percent this year, and the $1.1 billion Fortress Commodities Offshore Fund, which returned about 1.8 percent, according to people with direct knowledge of the funds’ performance.
Duet’s best trade was on Brent crude in the second quarter, Hall said. The contract, traded on ICE Futures Europe in London, gained as much as 34 percent this year as fighting erupted in Libya, which has Africa’s largest oil reserves. The disruption to supplies of light crudes, which yield a higher proportion of more profitable products including gasoline, increased demand for similar grades such as Brent.
‘New Highs’
Brent costs about $24.59 a barrel more than the West Texas Intermediate grade traded on the New York Mercantile Exchange, a global benchmark, up from about parity in 2009. The premium dropped from $25.93 on Sept. 6 after a 600,000-barrel cargo of Libyan crude was offered for shipment, a sign exports may resume, said three people with direct knowledge of the transaction.
Brent slumped 12 percent to $111.81 a barrel since early April because of concern that slower economic growth will curb demand for energy. The Paris-based International Energy Agency cut global oil demand forecasts for this year by 200,000 barrels a day and 400,000 a day for 2012 on Sept. 13, and said stockpiles in developed nations fell to below the five-year average for the first time since the global recession in 2008.
“Eventually the crude fundamentals will come through and become the dominant factor,” said Hall, who holds an economics degree from University of Bath. “We are going to see new highs in Brent over the next six months.”
More than half Duet’s commodity book is expressed through options, with crude and precious metals positions concentrated in periods three to six months ahead, said Hall, who previously worked for Credit Suisse Group AG and Deutsche Bank AG.
Gasoil Cracks
Fuel was also the fund’s worst trade, on a view concerning price differentials of gasoil and other products.
“Energy relative value has been the most disappointing part of the portfolio this year, with our view that middle distillates would outperform other products,” he said.
The so-called cracks, reflecting the spread between the price of the refined product and crude, slumped 29 percent since peaking at $24.17 a barrel on March 16, according to data from PVM Oil Associates, a London-based brokerage. Gasoil is typically used as a heating fuel.
Speculators held 1.275 million net-long futures and options across 18 commodities tracked by the U.S. Commodity Futures Trading Commission in the week ended Sept. 6, the most since the week ended June 14, data compiled by Bloomberg show. They had raised that combined position for four consecutive weeks. They cut their bullish bets by 5.2 percent in the latest week.
Platinum Bull
Duet is also bullish on platinum, which gained 2.3 percent to $1,810.38 an ounce this year. The metal, mined mostly in South Africa, will trade as high as $2,000 to $2,200 this year, Hall said. Holdings in exchange-traded products backed by the commodity are at a near-record 44.3 tons, valued at about $2.6 billion, data compiled by Bloomberg show.
Platinum is trading at a ratio of 2.5 times the price of palladium, compared with a 10-year average of 3.5. The metals are mined together and both are used in autocatalysts.
Platinum supply will fall 21,000 ounces short of demand this year, widening to a deficit of 54,000 ounces in 2012, Barclays Capital estimates. Mining companies are going as deep as 1.4 miles underground to maintain output, pumping chilled air down mine shafts to cool seams as hot as 160 degrees Fahrenheit.
“Platinum looks like great value in the precious metals complex,” Hall said. “Platinum is a store of value, a precious metal and an industrial metal. If the economy picks up we’re going to see bigger demand in catalytic converters.”
