Commodity Blog

Commodity Prices - Gold

Analysts forecast that gold priced in euro will continue to hit new highs. When price will reach its previous peak a cup and handle pattern may occur as investors start selling, causing some decline in price. After that price tend to rise greatly. Gold rose to 836.98 euro per ounce, an all-time record, on March 2nd.

Copper scrap discount to New York-listed futures declined by half in two months on deficit of used metal. Demand for the copper is rebounding on speculation that economic recovery will increase consumption. In the same time, scrap copper becoming scarcer because of harsh winter in the U.S. as snow hampers collection of scarp. May delivery for copper shrunk 0.3 percent to $3.4245 per pound by 11:17 on NYMEX.

Wheat gained as U.S. farmers are cutting sales on anticipation that a weaker dollar will increase demand for the grain. Price was falling as global wheat supplies are increasing faster than world demand but low wheat planting this winter may cause lack of supplies, leading to rebound in price. May futures for wheat delivery rose $0.1125 (2.2 percent) to $5.1575 per bushel on the Chicago Board of Trade.

Corn advanced on speculation that excessive rainfall may harm crops in Argentina. Price is supported by combination of a falling dollar, adverse weather and improving world stock markets, as well as by farmers, who are holding crops for higher prices. May futures for corn delivery jumped $0.0525 (1.4 percent) to $3.8675 per bushel in Chicago.

Gold may rise to $1,162 per ounce, according to technical analysis, in case prices hold above $1,135 level. The precious metal advanced 3.6 percent this year. Gold traded at $1,136.45 by 10:44 in London.

Gold may slid after the dollar rebounded against the euro, cutting appeal of the metal as an alternative asset. The greenback rose on concern about Greece’s debts last month. Gold have tendency to move inversely to the U.S. currency.

Yet there are some factors that can support the metal’s price. Commodities’ prices may go up as U.S. economy advanced at a 5.9 percent annual rate in the fourth quarter, the greatest pace in six years. Chile earthquake boosted the base metals prices, possibly pushing other commodities up. Africa’s biggest gold mines may halt due strikes, decreasing supply of the precious metal.

April futures for gold delivery fell $1.20 (0.1 percent) to $1,117.70 per ounce by 11:28 on the Comex division of the New York Mercantile Exchange. Immediate delivery for gold was at $1,117.30 in London.

Wheat tumbled to a weekly low after U.S. producers increased sales of grain after a price rally. Earlier wheat slid on declining demand for inventories from the U.S. and growing global stockpiles. March futures for wheat delivery slid $0.075 (1.5 percent) to $4.8925 per bushel by 10:30 on the Chicago Board of Trade.

Cocoa advanced to the highest in five weeks in New York on speculation that global consumption may exceed world output. Holidays, like Valentine’s Day, create more demand for the chocolate ingredient. May futures for cocoa delivery added $58 (1.9 percent) to $3,098 per ton at 11:20 on ICE.

Gold rose to a weekly high in New York as economic recovery spurred appeal of commodities as an alternative investment. Demand for the precious metal as a safe haven was also boosted after the European Union meeting hadn’t provide details about helping Greece with its debt crisis. April futures for gold delivery rose $18.50 (1.7 percent) to $1,094.80 per ounce as of 11:50 on NYMEX.

This video presents a short-term technical analysis of the spot gold chart based on the Japanese candlestick patterns. The period of the last 15 days is reviewed, marking up the most important daily candles and the support/resistance levels that were formed by these candlesticks. In the end the short-term target for the gold is given. I recommend watching this video if you want to profit from the next few days’ move in gold disregarding your current long-term stance on this commodity.

Gold rose in New York and London after the dollar declined, boosting appeal of precious metals as an inflation hedge. The U.S. Dollar Index dropped 0.9 percent on speculation that European Union officials will agree to assist Greece to tackle its budget deficit. Gold have tendency to gain when greenback falls.

As concern for European woes is decreasing, the demand for gold and other investment assets rebound. China’s passenger-car sales more than doubled in January with government economic stimulus measures. High automobile sales in China helped the prices for precious metals.

April delivery for gold futures gained $15.10 (1.4 percent) to $1,081.30 per ounce by 12:02 on the Comex division of the New York Mercantile Exchange. Previous decline was considered as ”a buying opportunity” and have increased bullion purchases.

Cotton prices tumbled, continuing the longest decline since September 2008, on investor concerns that harsh banking regulations may curb commodity trading. Traders limit their purchases and sales until rules will be clear to minimize risk of money loss. March futures for cotton delivery waned $0.0048 (0.7 percent) to $0.6855 per pound as of 11:23 on ICE.

Gold gained on speculation that the dollar’s advance will slow, increasing appeal of the precious metal as an inflation hedge. The U.S. currency slid as much as 0.5 percent versus the euro. A rising deficit in the U.S. forces investors to buy hard assets like gold and oil. April futures for gold delivery added $15.40 (1.4 percent) to $1,099.10 per ounce by 11:27 on the New York Mercantile Exchange’s Comex unit.

Crude oil gained after the report that the U.S. economy improved at the fastest pace in six years, suggesting that demand may increase. Oil rose as much as 1.6 percent as U.S. gross domestic product went up 5.7 percent in the fourth quarter, the best performance since the third quarter of 2003. March delivery for crude oil added $0.71 (1 percent) to $74.35 per barrel as of 10:10 the New York Mercantile Exchange.

Wheat futures slid as the stronger dollar made supplies from the U.S., the largest producer of the grain in the world, less appealing to overseas buyers. The dollar gained 0.5 percent versus the basket of six major currencies. March futures for wheat delivery lost $0.045 (0.9 percent) to $4.825 per bushel at 10:20 on CBoT.

Gold fell in London as the dollar gained, decreasing the metal’s attractiveness as an alternative store of value. The dollar rose on concern that demand for European assets will decrease with Greece’s fiscal problems spreading further, while the U.S. economy advanced more than expected last quarter. Immediate delivery for gold slipped $8.17 (0.8 percent) to $1,078.93 per ounce by 15:17.

Corn rebounded from the lowest level in 16 weeks after the report that exports from the U.S., the biggest grower in the world, will rise. Exports went up 20 percent in the four weeks ended January 21st, compared with the previous year, after prices dropped 14 percent this month. Production of ethanol is also increasing. Analysts predict that low prices will spur demand. March futures for corn delivery added $0.01 (0.3 percent) to $3.5925 per bushel by 11:07 on the Chicago Board of Trade.

Analysts say that gold is still bullish in long term, despite its fall 11 percent down from its record last month. The precious metal’s drop can be considered “a normal pullback” and ”the long-term momentum” is still present. Gold is little changed, erasing a previous gain of 5.9 percent, as the dollar rebounded versus the basket of six major currencies this month.

The technical analysis of the spot gold, presented in this video, employs a rather interesting theory based on the long-term super cycles, according to which the gold is rising since 2006. These cycles run for 21–23 months and currently we are in the beginning of the third cycle. A cycle has a parabolic shape and begins with a decline and after 6–8 months switches to growth, ending with a new record maximum. So, for the long-term traders it’s still a good opportunity to sell, holding a short gold position for about a half a year and then buy, aiming to catch another peak. Of course, cycles aren’t surefire and you shouldn’t risk too much, relying on such kind of analysis.