Commodities Spread Betting January 2010
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A regular Commodities spread trading update by Simon Denham of Capital Spreads. For the latest Commodities spread trading update, click here.
Commodities Spreads, 15 Jan 2010
Crude oil prices continue to remain under pressure with their fourth decline in a row.
As long as the inventories continue to build and the weather in the northern hemisphere gets warmers oils gains will remain limited for now.
Price Update:
Gold closed yesterday at $1138.0
Commodities Spreads, 14 Jan 2010
Gold had an interesting session oscillating between $1120 and $1137. We looked like we were going to record the second decline in a row before a late surge, bouncing neatly off the 20 day moving average.
This morning we’re at $1142.5 and gold is a hard one to call at the moment. The uptrend is still in tact but, with the equity rally just stalling at the moment, any further risk aversion will seriously hamper the precious metal’s advances.
Indian demand for gold is also being affected by such extortionate prices; another fundamental reason for capping gold’s gains.
Feb crude oil contracts are expiring, Brent went last night, and so we’re onto March with Nymex around $80.55.
As mentioned in yesterday’s comment the inventory numbers provided plenty of volatility with a build initially leading to a sharp decline in crude prices only for them to recover later in the session.
Commodities Spreads, 13 Jan 2010
The Forex and commodity markets experienced some decent volatility yesterday with gold in particular suffering big losses towards the end of the session.
Gold’s weakness was contrarian to other precious metals such as platinum and palladium which hit 18 month highs yesterday. Although those metals are giving most of gains back this morning.
Crude Oil suffered a similar fate seeing declines later in the day. This morning it is forging new-recent-lows with February Brent Crude testing $78 and the March contract dropping below $79.
Inventory numbers due this afternoon could lead to further volatility for oil prices. When you consider what happened last week - a gap higher with a big rally within a few seconds followed by a sharp decline minutes later - oil spread bettors might be best off sitting on their hands until the data is out.
Commodities Spreads, 12 Jan 2010
With the Chinese economy doing so well last month, and presumably this month as well, the pressure for a floating Yuan is likely to increase.
This underpins the movement in Gold over the weekend as a stronger Yuan ipso facto translates into a weaker Dollar, Euro or Pound.
While this does not make the Yellow Metal in Global terms any more valuable, it does obviously have an effect on its price in these currencies.
Those who like to take the ultra long view seem to be gambling on gold benefiting from this possibility. The resistance mentioned in yesterday’s morning comment at $1161 proved to be the high of the day in the afternoon.
This leaves the ‘gap’ opened on Sunday evening down at $1140 to go for on the downside and, of course, the $1161 resistance still forming a target for the bulls to the up.
With the world economy beginning to pick up, the case for higher rates is getting stronger and while the attraction for gold is self evident it remains to be seen whether it can hold good in the blow torch of higher rates.
Oil made for the $84 level in early action yesterday, but with the poor weather looking like petering out across Europe and the US we might see some weakness coming through, especially in the back months.
Nigeria could prove to be a problem as the old ruler seems to be on his way out and the Middle East seems as unstable as ever. This means we cannot completely rule out supply problems, however, it must be noted that, with inventories still reasonably strong, much of this fear appears to be in the prices already.
As with yesterday’s comment support remains at 82 Dollars and we are perilously close to this now at $82.20 in February Nymex.
For the Bulls, the support is obviously a buying level but for the much battered Bears its proximity gives them some hope for redemption.
Commodities Spreads, 11 Jan 2010
Gold smashed straight through the $1141 resistance mentioned several times last week but only out of trading hours.
We failed repeatedly to pressure the resistance level on Wed through Fri last week only to open above $1150 on the Chinese news this morning.
There is small resistance on the upside at $1161 but the bulls are likely to be going for more. On the downside there is the big gap now opened up down to $1140.
Even in the huge moves for the Yellow metal of the last few years there have been very few ‘gaps’ in the charts and so this might prove to be an irresistible attraction for the sellers.
Oil is at new highs once again and, as mentioned last week, the bulls seem to have the upper hand here as well. $83.60 in Nymex seems to be something of a barrier to buyers and we may sit just beneath here in the morning session.
The mid eighties have not been a well travelled area over the last year or so. In fact on the way down in Autumn ’08 we shot through from $90 down to $60 hardly touching the sides.
However, there were one or two points of reference, $84.80 being the most obvious. Bulls will be eyeing this and then $87.00 and $90.25.
Commodities Spreads, 10 Jan 2010
Price Update:
- Brent Crude Oil (Feb) closed last week up $4.82 at $82.75 (up 6.19% week-on-week)
- WTI Nymex / US Oil (Feb) closed last week up $2.01 at $81.37 (up 2.53% week-on-week)
- Gold closed last week up $35.80 at $1,131.80 (up 3.27% week-on-week)
Also see:
Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.
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Commodities Spreads, 8 Jan 2010
Crude Oil finally put in a negative day yesterday and dealers have been taking profits through this morning’s session. We have not challenged the support yet so the momentum remains to the up side.
$83.50 looks to be building as a barrier to a move higher but the omens do not look good for cheaper fuel just now.
Once the weather turns and inventories are rebuilt again we can probably look forward to a reaction sell off but this might well be a while before we see it.
Gold has retreated from the highs and spent almost all of yesterday’s session sitting on the 1128 Dollar support before breaking lower in the very early hours this morning.
We have already been down to support at $1120 but this proved too much to overcome outside of US trading times.
Support for the Yellow Metal goes all the way down to $1115 but if it breaks there is not much to stop us until $1101. On the upside there are barriers at $1127/1128, $1135 and the previously mentioned major resistance at $1141.
Commodities Spreads, 7 Jan 2010
Obviously the Gold market read my comment yesterday as it proceeded to rally to the exact resistance level mentioned, $1141, before taking a breather overnight.
So, in the spirit of open-handedness, I shall talk about the downside today. The markets are now at $1132 and we have support at $1130 then $1127/1128 and below here at $1116/1118.
Sellers seem to be in evidence since the high was reached at 20.00 last night but they must get some momentum going soon otherwise the push to the upside might take the reins once more.
Long term, the target appears to be $1019 for the bears but this does take a deal of believing in just now. To the upside the sky remains the limit but with the US and UK reported to be about to rein in QE and with the ECB taking a hard line with Greece the days of easy liquidity may be limited.
In this case we might find that Money Supply starts to contract which could well leave Gold rather high and dry.
Oil stormed all over the place on the Inventory numbers, as warned in our comment. For the very quick there were opportunities on both the up and down side of the market. The immediate reaction took the price 60 cents higher and then a Dollar and a half lower in the next few minutes, only to reverse once again and rally 250 cents over the rest of the session.
Nymex is now at a new, front month, high since the falls from 147 Dollars in July through December ’07. For the bulls, the immediate target is $86.30 but for the bears the only desire is for some relief.
We have now had 10 straight up days and 15 in the last 17 sessions. This is impressive even for this, famously directional, commodity. Even the May rally of $46 to $73 was a bit more even handed.
There is reasonable resistance at $84.80 which might prove difficult to breach just for now. However, the resistance at $80-82, which had proved so hard to overcome over the last few months, has now been defeated and we must therefore speculate that this will turn to support against any pull back.
Commodities Spreads, 6 Jan 2010
Gold has had a couple of goes at the support over the last day or so but all have been defeated if not with ease.
The reaction buying is continually taking us up to the $1,125 to $1,128 region.
Dealers will be looking for a break of this to possibly take us to the $1,141 resistance mentioned yesterday. Support is, as mentioned, at $1,115-$1,117 and unless something happens to the Dollar this looks to be safe for the morning session at least.
Crude Oil has been battering at the $82 level but has so far failed to penetrate. Any attempts to push us back down are equally unsuccessful.
Traders will be watching the $81.25 to $82.00 region for a possible trigger for the next short term direction.
At the moment it continues to be dangerous to be short and one must speculate that the recent appalling weather across the Northern Hemisphere might be depleting reserves more than forecast.
The Inventory number is out this afternoon from the States and we can yet again expect some fireworks. They might be weaker but still disappoint. Again, as with last week’s comment, it is a dangerous data release to hold a position over. Only those with big pockets should apply.
Commodities Spreads, 5 Jan 2010
Oil has rallied to the top of last years trading range, almost exactly, hitting 82 Dollars in early action. After putting on 8 straight winning sessions we have now put in 9.
Without any news in the offing, until the inventories tomorrow, it is difficult to speculate on new highs so we might have a bit of a pull back before then. Nevertheless, the momentum is definitely in the bulls favour just now.
Gold has broken back above the long term trend support that we broke below on the 21st Dec. This is now at around $1116 and the one attempt lower, yesterday evening, failed to press back below it.
The Yellow metal has been a tad weak recently but dealers are still fans and continue to buy on any falls. We are in a bit of no-mans land at the moment with little to recommend itself.
There is some small resistance at about $1141 and, on the downside, there seems to be little in the way of appetite to sell below $1085.
Aside from this we can merely go with the flow which, just for the moment, is possibly veering to the buy side.
Commodities Spreads, 4 Jan 2010
Commodities look pretty much a one directional play with the Far East looking to soak up virtually anything dug, drilled or sucked out of the ground.
Oil has broken above 80 Dollars for the first time in a while but we are not seeing much in the way of selling to counter the move.
Resistance is all the way from the current price ($80.50) up to $81.50. The oil market has had eight up days in a row which is spectacular even for black gold and bears have been somewhat trampled in the rush.
Gold is also surging having failed to break below the major support levels and there is a small feeling that the gold bugs are looking for the new year as another platform for an attempt to regain the initiative.
Commodities Spreads, 3 Jan 2010
Price Update:
- Brent Crude Oil (Feb) closed last week up $1.62 at $77.93 (up 2.12% week-on-week)
- WTI Nymex / US Oil (Feb) closed last week up $1.31 at $79.36 (up 1.68% week-on-week)
- Gold closed last week down -$8.50 at $1,096.00 (down -0.77% week-on-week)
Also see:
Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.
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Risk Warning: Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
'Commodities Spread Betting January 2010' by DB, updated 15-Jan-10
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