Spread Trading Commodity Market Review
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The Spread Trading Commodity Market Review with quick and simple answers to common commodity spread trading questions:
Spread Trading Commodity Market Review, 27 January 2012
It was a real risk on scenario following the Fed's announcement that interest rates are due to remain at their record lows into 2014 and you can safely say that a similar thing might happen here in the UK.
The buyers piled back into mining stocks as metal prices soared with gold and copper prices spiking.
The gold spread betting market was also in demand after its initial big spike on Wednesday then that strength continued through to yesterday as the yellow brick smashed through $1700 and onwards to $1730.
The profit taking across risk assets has filtered through to gold as well which is a little lower this morning to $1717.
The bottom line for gold is that if the US is thinking about more monetary easing, gold is likely to be a one way ticket and clients remain heavily long of the metal.
Near term support and resistance is seen at $1703/1680 and $1730/1738 respectively.
Price Update:
- Brent Crude Oil / UK Oil (March) closed yesterday at $110.79
- WTI Nymex / US Oil (March) closed yesterday at $99.70
Spread Trading Commodity Market Review, 26 January 2012
Spread betting investors long of gold yesterday evening would have been whooping with joy.
The precious metal doesn’t pay interest so during a time of low interest rates it is often bought as an alternative asset. This was certainly the case yesterday as, after the news from the Fed that rates would remain low into 2014, there was a spike of some 40 dollars, meaning the highest level since December 12th was reached at $1713.0.
In total for the day, $45.2 was added onto the price of the yellow brick, which closed at $1710.6.
Support was also given from a slumping dollar and fear of inflation further down the road once the global economy gets back on its feet. This morning the bulls are taking a little bit off the top as gold trades at $1705.
The weekly oil inventories report from the US Dept of Energy showed a mixed bag, with crude stockpiles rising higher than estimated yet gasoline inventories dropped against expectations of a rise.
On the back of this, the crude oil spread betting market remained around par until the Feds statement that interest rates were staying low for longer, which caused a slight rally, but only enough to push prices marginally higher. At time of writing, Brent crude trades at $110.41.
Spread Trading Commodity Market Review, 25 January 2012
Gold had a go at the $1680 level yesterday and continues with its upward trend, having bounced its way off support areas during its recent little run higher.
Our spread betting account holders remain bullish of the precious metal and will be hoping at some point of a return to the dizzy heights recorded last year around $1900.
Price Update:
- Brent Crude Oil / UK Oil (March) closed yesterday at $110.03
- WTI Nymex / US Oil (March) closed yesterday at $98.95
Spread Trading Commodity Market Review, 24 January 2012
Carrying on with the bullish trend, gold got another boost yesterday, rallying $10.6 to close at $1676.7.
Demand was given a leg up by the slumping dollar, meaning that risk adverse investors were in search for an alternative safety haven amid the European uncertainty.
Chartists and those using technical analysis will be aware that the medium term trend has now turned sideways and the chart shows the 9 and 14 day moving averages crossing above the 40 day MA. At time of writing, the precious metal is seeing a small pullback and is trading down at $1672.0.
The main driver for crude oil prices yesterday was the announcement that the European Union will ban Iranian oil imports from July 1st.
This comes in response to Iran’s reluctance to halt its nuclear program and has put the energy sector on red alert. The Middle Eastern nation has threatening to close the Strait of Hormuz which allows around 20% of global crude to be shipped through.
The other factor driving prices higher was the weakening US dollar, meaning that crude looked like a good bargain to potential buyers. Currently, Brent trades up at $110.92.
Spread Trading Commodity Market Review, 23 January 2012
Gold ended the week on a high as nervous investors wanted to hedge themselves ahead of a busy weekend with Greek officials looking to strike a deal with the country’s bond holders.
By the close of business, it had risen $7.7 to $1665.7, the highest move since December 12th, keeping the bullish momentum. Currently, things are still looking good for the precious metal which is trading up at $1669.4.
Alarm bells were ringing on Friday after the International Monetary Fund cut its forecast for this year’s world economic growth. This led investors to believe that demand for energy would plummet, sending the crude oil spread betting market through the floor.
No support was provided by the single currency either as there was no deal reached on the Greek’s debt burden.
At time of writing, Brent crude is up slightly on the day at $110.23 as the EU announces that it will enforce an embargo on Iranian oil from the 1st July.
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Spread Trading Commodity Market Review, 20 January 2012
The gold spread trading market did not benefit in the same way as other risk assets and couldn't sustain its strength from earlier in the day.
This morning the precious metal is at $1654, so for now the short term trend remains intact and the bulls will be looking for a test of resistance around $1670/80 whilst they'll be hoping support at $1639/25 will hold up.
Price Update:
- Brent Crude Oil / UK Oil (March) closed yesterday at $111.55
- WTI Nymex / US Oil (February) closed yesterday at $100.39
Spread Trading Commodity Market Review, 19 January 2012
Thanks to a weaker US dollar, gold enjoyed a third day of gains yesterday as investors viewed the dollar denominated commodity spread betting market as a bargain.
Some may see it as ironic that the asset, used recently as a hedge in the market turmoil, has risen on the back of successful debt auction in Germany and Portugal.
The yellow metal ended the day up $7.6 at $1658.5 and now market watchers will see if the support turned resistance level of $1666.1 can be breached. Currently, the precious metal is up at $1663.4.
The two contradicting forces in yesterday’s session for crude meant that the energy source ended the day only marginally lower.
On one hand, the weaker dollar pushed prices higher for black gold, but on the other, the prospect of rising supplies put off energy investors off a bout of aggressive buying.
Hopefully later today the weekly inventories report will provide some direction for the liquid stuff, but as it stands, Brent crude oil trades up at $111.27.
Spread Trading Commodity Market Review, 18 January 2012
Gold dipped yesterday as the bulls seem to have lost momentum briefly. With the precious metal at $1652 this morning the recent high around $1665 remains the next hurdle of the bulls.
On the downside they'll be hoping that the near term support at $1640 and $1630 will hold out.
Metal prices have had a good start to the year in general, similar to equity markets, and for that to continue they will rely on a continuation of the build in risk appetite.
Price Update:
- Brent Crude Oil / UK Oil (March) closed yesterday at $111.53
- WTI Nymex / US Oil (February) closed yesterday at $100.71
Spread Trading Commodity Market Review, 17 January 2012
Gold’s price was boosted yesterday by a slightly weaker dollar as risk adverse investors searched for an alternative safe haven for their assets.
Unfortunately, with low volumes due to a US holiday, the boost was not one worth shouting about and by the end of the session the yellow metal had only gained $4.7 to end at $1643.4.
At time of writing though, it seems that the Americans feel they missed out on the small rally and are catching up as the precious metal is up at $1660.6.
Grasping little direction from the equities markets, crude turned to the single currency for guidance, jumping on the back of a market rally.
Not only this but, after looking at the tensions between Iran and the West, investors appear to feel that a decline in prices is a good opportunity to go long. Currently, Brent crude oil trades up at $112.15.
Spread Trading Commodity Market Review, 16 January 2012
Commodities spread betting investors may have looked at gold’s performance last week as though it was attempting to make a comeback, with news of possible further monetary stimulus in China and Europe helping spur on the bulls.
But in fashion with Friday 13th, negative news from S&P about their downgrade on 9 European members’ credit ratings sent investors fleeing from gold and into the latest safe haven, the US Dollar.
All in all, the precious metal lost $10.4 to close at $1639.3, which at time of writing is slightly changed, with the yellow brick trading up at $1643.7.
For some, S&P’s downgrade on the 9 Eurozone members wasn’t a shock, after many a warning from the credit rating agency.
Spread betting account holders will still be waiting to see any follow up on the matter though as attention has been swung back to Europe.
On the other side, the possibility of a strike in Nigeria could disrupt oil productions, along with the unfinished sanctions against Iranian crude exports, meaning energy traders are staying on red alert, hence the limited decline on Friday.
This morning Brent is higher at $111.36 on the back of renewed tensions in Iran as they are seen to be threatening their neighbours if they replace Iran's reduced output imposed due to sanctions.
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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.
'Spread Trading Commodity Market Review' by DB, updated 27-Jan-12
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