Commodity Blog

Archive for July 19th, 2010

The spot gold and the August gold futures dropped today to the lowest level since May 24 as the speculators and big hedge funds no longer see a huge potential for this commodity. While the natural demand for gold may remain unchanged, the investment demand for it is going down as some other investment vehicles provide better opportunities for short-term gains.

The net-long speculative positions for gold on COMEX fell by 4,121 during the week ending July 13 according to CFTC‘s Commitments of Traders report. Speculative long positions still outnumber the short ones by 204,921. But the number is currently at its lowest level since April 6, signaling a possible further drop in gold.

Some commodity analysts say that since there is no strong fundamental demand for gold, it will be going down fast if investors stop increasing their long positions on futures contracts. There simply isn’t enough buyers to sustain the current level of prices. It looks like traders were too “longish” in their expectations and the price direction may remain bearish until the end of the week. But if the gold manages to close below the 100-day exponential moving average (which is currently at $1,183.74) it can enter a rather lasting downward wave.

Spot gold is currently trading at $1,181.31 as of 17:28 GMT, falling from $1,194.36. It has reached $1,177.31 during the day — the lowest level in eight weeks.

Latest commodity prices (ICE, NYMEX, CME) as of 16:01 GMT:

Oil (Brent) — $75.74
Gold — $1,180.33
Silver — $17.57
Palladium — $443.50
Platinum — $1,499.28
Copper — $6,504.00
Aluminum — $1,971.00
Nickel — $18,775.00
Zinc — $1,808.00
Cocoa — $2,987.00
Sugar — $17.44
Corn — $382.25
Soybean — $1,007.75