Gold and oil have taken a respite, and the dollar is showing a little resistance this morning, it looks like some profit taking is kicking in. The next big level for gold is $850 and of course we haven't quite hit the $100 mark for the black stuff yet.
Commodities Spread Trading, 7 Nov 07
The astonishing gold rally continued overnight as a $22 move higher yesterday has been followed by another $13 jump in Asian trade. It's the same old story and many believe the super spike in gold has only just begun. Finally the poor trader who bought gold at $850 nearly 30 years ago has a chance of off loading it for a profit.
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Commodities Spread Trading, 6 Nov 07
Gold (yawn) has broken higher again as woes continue to engulf other investment products. We are now at 815.6-816.1 (what price Gordon Brown's sell off of the UK gold reserves at around $250 now?) and seemingly accelerating as we go. Both the Gold spread betting and Crude Oil spread betting markets closed on a weak move last night but this morning have open heavily higher. The move by the Far East to reverse US direction is unusual and could well indicate another push in commodities as the world seeks to secure supply.
Commodities Spread Trading, 5 Nov 07
Gold has finally gone over the $800 buck level and our clients have been big profit takers up here. Now we wait to see whether the appetite for the $1000 run is in place and with jitters virtually all over the market the chances are becoming more certain of yet more blow out moves higher. The fact that Gold is actually just a pretty, inert, slightly rare metal will not diminish its lustre in the eyes of the bulls. Spread trading at $802.0-$802.6 clients are still long (just not quite so long as before).
Oil is also spiking higher with Nymex closing at a new $96 peak on Friday. Again this is a play on other markets (in this case political ones) as the oil producers bask in the transfer of wealth from the West and developing nations to Russia, Nigeria and the Middle East. With just a minor squeeze on production reaping such a huge price dividend just imagine what would happen if there was a real crisis. Crude is off the peak this morning with Nymex December at 95.05-95.11.
Commodities Spread Trading, 2 Nov 07
Oil and Gold Spread Betting remain strong with punters buying into both on the 'slight' weakness yesterday. Both had big trading ranges but eventually closed slightly down. Gold remains our most popular product as traders continue to look for the fabled $800 level but oil is not far behind either with longs building up looking for a spike towards $100 in the US Nymex. The current crude oil spread price is 93.39-93.45 (December Nymex) with the high at just shy of $96. Volatility in the black stuff has been growing for weeks with daily trading ranges getting bigger and bigger culminating in the last three $4 plus high/low moves. Oddly enough for all of the chaos going on we are almost exactly at the same price now as we were three days ago before the days in question occurred. Analysts are speculating on whether this is a blow out move or whether we are just gearing up for another shift higher.
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Commodities Spread Trading, 1 Nov 07
Gold spent most of yesterday slowly grinding higher from the 780 support level. Punters were continuous buyers throughout the day and this morning are buying again as the 800 level is tantalisingly close. We hit a high of 798 last night and again this morning but the market is sinking slowly as the dollar rallies slightly. We are now spread trading gold a tad at 792.8-793.4. Support is at yesterday's lows around the 780 mark and resistance is obviously at 798 and 800.
Crude Oil reversed the entire 4 dollar fall of Wednesday / Thursday morning as the inventories showed undoubted weakness in US stocks. We are now at another all time high in early trade with Brent December at 91.50-91.55 and Nymex is (like gold) tantalisingly close to a magic number (in this case $100) at 95.60-95.66. If we have a tough winter or the Iran v US disagreements worsen we may well see rather more on this.
Commodities Spread Trading, 31 Oct 07
Gold is sitting quite comfortably at the 782 level and the last few days of dollar weakness does not seem to be giving Gold much of a push. Talk in the press of $1,000 an ounce in the next few years will give the bulls a target to aim for but much can happen before such levels can be attained. In reality, Gold remains an expensive asset to hold, giving very low returns (apart from possible price appreciation), costing money to hold, and reliant on the 'perception' of value. At the moment Financial Spreads are just a few bucks off this morning at 782.0-782.6 and our Capital Spreads clients are busily buying once more on the small fall from the highs.
As feared in yesterdays column "At the moment every newspaper and commentator is talking about $100 but, as is often the case, when everyone is convinced of one outcome, something else happens". Oil has dropped almost 4 dollars since the penning of that statement. Punters will be looking at support in the 85.00 region (Brent December) but if the inventory numbers from the States this afternoon are benign we may well see a swift return into the low 80's. Of course with winter approaching if the numbers show a weak supply situation then the opposite may be the case.
Commodities Spread Trading, 30 Oct 07
Gold markets have paused for breath in their headlong rush for the $800 level and are now ten dollars off the highs of yesterday. The gold spread betting market is now at 785.5-786.1 but this is already 3 dollars higher than our opening level of 782 as dealers yet again take any sell off as an opportunity to buy. The charts briefly gave the impression that we may be forming what is known as a potential 'island reversal' but the first hours price action has closed off this possibility. Our clients remain massively long and are happy to pick up more on this small reversal. Even a reversal to 760 would not dent the trendline higher.
The Brent Crude spread betting market drifted slightly lower this morning as the storms in the Gulf abate slightly and the political tensions go nowhere. At the moment every newspaper and commentator is talking about $100 but, as is often the case, when everyone is convinced of one outcome, something else happens. Our clients are actually pretty flat in oil at the moment as they try to get a handle on whether we will push upwards or whether the elastic band effect will plummet us back down again. It is advisable at these levels to keep your stops in tight no matter which way you bet as the price action is very violent and will not be kind if you get it wrong.
Commodities Spread Trading, 29 Oct 07
Brent Crude Oil is also powering higher as dealers speculate on political risk levels. With the winter upon us any extra worries are likely to exert ever more pressure on prices. It is in Russia’s interest that tension is kept high as they make a nice little turn the higher the price goes. With the states and even Europe worried by Iranian nuclear ambitions this story could run and run. It is probable that the US administration believes they invaded the wrong country! For all of Saddam’s WMD claimed capability he was never on the nuclear ladder. Fortunately there is now no appetite for 'gun boat' diplomacy so in the words of Winston Churchill "Jaw, Jaw" rather than "War, War" is likely to be the solution this time
'Commodities Platform' by DB, updated 09-Nov-07
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