Commodity Blog

Commodity Prices – Silver

Gold and silver erased this year’s gains as the credit crisis in Europe continue to weaken demand for raw materials. Talks about Greece exiting the euro-union are becoming more and more serious and some analysts even speculate about collapse of the eurozone. Traders seek a safe haven amid uncertainty and economic turmoil, but it looks like the dollar took the role of refuge that was traditionally attributed to precious metals. Gold was down from $1,541.40 to $1,535.80 per ounce on COMEX yesterday, reaching $1,533.80 intraday — the lowest price since December 29. Silver fell from $27.69 to $26.90 per ounce yesterday — the lowest settlement since December 29, while today it opened at$27.21.

Wheat jumped today for the fourth trading session as bad weather in various parts of the world threatened to curb output. Russia continues to suffer from drought and parts of Kansas suffer from the same problem. Russia is the world biggest exporter. Wheat is the fourth biggest US crop and Kansas is the biggest wheat-growing region of the United States. Wheat climbed from $6.3825 to $6.4325 per bushel as of 00:51 GMT on CBoT today.

These three short videos show what analysts expect of the week starting May 14 for gold, silver and oil. All of the commodities demonstrated bearish trends and the videos show potential downside targets in case the trends would persist. Additionally, the conditions under which the bearishness may be broken are also discussed.

Gold and other precious metals retreated today as positive market sentiment decreased demand for safer assets. The Standard & Poor’s 500 Index of stocks jumped as much as 1.2 percent, showing that traders were willing to risk.

Institute for Supply Management reported that US manufacturing Purchasing Managers’ Index rose from 53.4 in March to 54.8 in April. Analysts predict that reports this week will show that US employment grew with faster pace. The report of China Federation of Logistics and Purchasing showed that China’s manufacturing PMI advanced from 53.1 to 53.3.

Demand for safety of precious metals may yet return as problems in Europe continue to have an adverse impact on the global economy. Yesterday’s report about a recession in Spain trimmed optimism among investors. Political struggle in France doesn’t help traders’ sentiment either.

Gold slipped from $1,665.00 to $1,663.30 per ounce as of 20:23 on COMEX today, erasing earlier advance to $1,670.50. Silver declined from $31.05 to $30.93 per ounce and palladium went down from $682.35 to $680.05 per ounce today.

Metals rose today, but ended week with losses anyway on the signs of economic slowdown across the world. Gold ended this week flat.

Yesterday, traders have seen evidenced of problems in Europe and China. Today, even the United States made market participants worried. New home sales fell from 318,000 in January to 313,000 in February, even though they were expected to rise to 326,000.

Gold advanced from $1,644.10 to close at $1,661.10 per ounce today on COMEX. Silver went up from $31.50 to $32.25 per ounce today in New York. Platinum closed at $1,626.50 per ounce, following the advance from $1,619.90 to $1,637.90. Copper was higher from $3.7990 to $3.8165 per pound today.

Metals slid today on signs of worsening economy in China and the eurozone. China’s Purchasing Managers’ Index fell from 49.6 in February to 48.1 in March. The eurozone manufacturing PMI slipped from 49.0 to 47.7 this month, while the services PMI was down from 48.8 to 48.7.

Positive fundamentals in the United States contrasted with the negative data from Europe and Asia, allowing the dollar to strengthen. The strong greenback pushed commodities, including metals, to the downside. The Standard & Poor’s GSCI Index of commodities declined as much as 1.6 percent.

Gold was down from $1,649.90 to $1,643.00 per ounce as of 20:11 GMT on COMEX today, following the earlier drop to $1,627.50 — the lowest level since January 10. Silver price went down from $32.30 to $31.32 per ounce in New York today. Copper fell from $3.8350 to $3.7765 per pound today.

Crude oil rose today as US stockpiles rose less than was predicted and after the positive news from the United States and Europe lifted traders’ mood. Gold and silver also posted gains.

US inventories of crude grew 0.8 barrels last week, compared to the average forecast of 1 million barrels. US employers added 216,000 jobs, more than 204,000 predicted by experts. Holders of Greek bonds equal to 58 percent of Greek debt agreed to participate in bond swap.

Crude oil for delivery in April advanced $1.46 to $106.16 per barrel on NYMEX. Brent crude traded near $123.83 per barrel as of 1:55 GMT on ICE after rallying from $122.19 to $124.20 yesterday. Gold was at $1,684.50 per ounce today on COMEX, following yesterday’s rally from $1,675.00 to $1,685.00. Silver was up from $32.95 to $33.40 per ounce yesterday.

Corn fell on forecast of record harvest in the USA. The commodity may yet advance as forecasters predict a decline of global stockpiles by 4.2 percent to 123.43 million metric tons by October 1 as bad weather may harm crops in Central and South America. Corn slumped from $6.5775 to $6.4375 per bushel on CBoT at the previous trading session before trading today at about $6.4350.

Metals, including gold and silver, fell today after China cut its growth estimate. China set its target for economic growth in 2012 to 7.5 percent, while it has been 8 percent since 2005. For some time, China was a major source of optimism about the global economic recovery and the sign of economic slowdown in the Asian nation was poor received by markets. The Standard & Poor’s GSCI index of 24 raw materials dropped 0.7 percent. Gold traded at $1,707.20 per ounce as of 22:53 GMT on COMEX today after falling from $1,712.70 to $1,694.40. Silver dropped from $34.79 to $33.54 per ounce before trading at $33.99 in New York today.

Cotton futures climbed today after the Indian Commerce Ministry halted exports to prevent deficit on the domestic market. The announcement surprised not only traders, but India’s officials as well. Many Indian lawmakers weren’t happy with the decision, while exporters claimed that the country has enough supply to meet the local demand. Cotton price climbed from $0.9375 to $0.9562 per pound in New York.

Lumber futures climbed today as US housing market recovers and demand from China is expected to increase. Wood Resources International LLC predicted that lumber may reach $300 per 1,000 board feet by July. Lumber price rose 0.7 percent to $279.10 by 10:26 on CME today. Prices were up 12 percent since the end of January.

Gold and silver posted a biggest drop in two months after today’s testimony of Federal Reserve Chairman Ben Bernanke made analysts speculate that the US central bank will refrain from adding stimulus for the US economy. Bernanke said that “decline in the unemployment rate over the past year has been somewhat more rapid than might have been expected” and that the labor market demonstrated “positive developments”, though “the job market remains far from normal”. The Chairman also said that “the inflation outlook subdued”. Such comments hint that the Fed isn’t going embark on a new round of quantitative easing. Precious metals suffered as an additional easing was priced in and the Chairman’s testimony has triggered a massive sell-off. Gold price slumped from $1,787.10 to $1,692.50 per ounce as of 20:54 GMT on COMEX and reached the lowest level since January 25 today. Silver was down from $36.93 to $34.52 per ounce in New York today.

The descending triangle pattern has formed on the weekly chart of silver after the price has attempted to rally several times, but each time it has failed as each successive high was lower than a previous one. This pattern shows a bearish trend. This particular case is interesting because the bearish move has started immediately after silver reach the record last year. The yellow lines show the the borders of the pattern, while the cyan lines are +/-10% off the borders and indicate entry points in case a breakout would occur. The green lines are the target levels and are +/-100% off the borders of the pattern.Click the image to enlarge it to a full-size screenshot:

If you have any questions or comments regarding this chart pattern for silver, please feel free to reply below.

Gold and oil rose today, as well as most commodities, as manufacturing in China and the United States expanded. Silver also gained. The China Federation of Logistics and Purchasing reported that the nation’s Purchasing Managers’ Index increased from 49.0 to 50.3 in December. The US PMI advanced from 52.7 to 53.9 last month.

Both commodities also gained on rumors that Iran made headway in creating nuclear weapon. Gold rallied as the rumors increased its appeal as a safe asset, while oil rose on concerns that sanctions against the country from the USA would disrupt shipments.

February futures for crude oil delivery advanced as much as $4.13 to $102.96 per barrel on NYMEX, the highest price since May 10. Brent crude surged from $108.38 to $112.07 per barrel today as of 23:18 GMT on ICE. Gold was up from $1,570.10 to $1,606.70 per ounce, while silver spot price went higher from $28.17 to $29.55 per ounce on COMEX.