-- Posted Monday, 18 March 2013 | | Disqus

STATS

London Gold AM Fix $1,599.00, +5.75 LME Copper Stocks 543,925 tons +18,100

Gold Stocks unchanged at 9.736 million ounces, Silver Stocks 163.588 million ounces +560,683

Chinese equity markets were lower overnight off a combination of weakness in developer and real estate shares and also because of the turmoil being thrown off by Cyprus. New Chinese leadership was installed and they in turn suggested that growth in the Chinese economy was the primary focus of their new government. The Japanese Nikkei was down just under 3% led by weakness in auto maker shares. European stock indices were also generally lower to start this morning, with the banking situation in Cyprus undermining sentiment. Today's US economic data schedule will bring on an NAHB housing index reading but that report is unlikely to take the markets attention completely off the Cyprus banking situation.

GOLD

With an upside breakout in April gold to start the new week it would seem like gold is set to benefit from the Cyprus situation even though the rest of the metals markets are under some initial pressure and the trade is also being confronted with some adverse currency market action. In short, gold is bucking some negative outside market trends to move up to the highest levels seen since February 27th. Gold might also be garnering some lift from news at the end of last week that gold holdings of a key gold derivative instrument declined to the lowest levels since October of 2011. A sharp slide in equities and weakness in a host of physical commodity markets suggests a risk off environment is in place, but the question for gold players is whether or not the Cyprus situation has legs? Comex Gold Stocks were unchanged at 9.736 million ounces. Comex Gold Stocks are at the lowest levels since 12/17/2009. Gold stocks have declined in 14 of the last 20 days. The Commitments of Traders Futures and Options report as of March 12th for Gold showed Non-Commercial traders were net long 102,294 contracts, an increase of 7,282 contracts. The Commercial traders were net short 130,798 contracts, an increase of 9,010 contracts. The Non-reportable traders were net long 28,504 contracts, an increase of 1,728 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 130,798 contracts. This represents an increase of 9,010 contracts in the net long position held by these traders.

SILVER

While May silver forged a rather wide range overnight, the silver market was apparently unable to hold the initial safe haven or flight to quality gains into the US Monday trade action. The bulls might suggest that silver prices are only marginally below the Friday closing level, but the fact that silver is not clearly benefiting from the Cyprus situation, suggests that silver and platinum have generally remained physical commodity markets. It is possible that weakness in platinum and copper prices and weakness in the Euro have undermined silver to start the new trading week. Comex Silver Stocks were 163.588 million ounces up 560,683 ounces. The Commitments of Traders Futures and Options report as of March 12th for Silver showed Non-Commercial traders were net long 16,556 contracts, a decrease of 470 contracts. The Commercial traders were net short 28,374 contracts, an increase of 171 contracts. The Non-reportable traders were net long 11,817 contracts, an increase of 640 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 28,373 contracts. This represents an increase of 170 contracts in the net long position held by these traders.

PLATINUM

The platinum market has started out on a back foot this morning, with the lowest price probe seen since March 5th. Like silver, platinum seems to have become a physical commodity market again and not a flight to quality instrument in the wake of the Cyprus situation. With some brokerage firm downgrades of a platinum related issue overnight, platinum appears to be seeing fresh selling pressure from a number of angles. The Commitments of Traders Futures and Options report as of March 12th for Platinum showed Non-Commercial traders were net long 39,520 contracts, a decrease of 620 contracts. The Commercial traders were net short 45,296 contracts, a decrease of 221 contracts. The Non-reportable traders were net long 5,775 contracts, an increase of 399 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 45,295 contracts. This represents a decrease of only 221 contracts in the net long position held by these traders. In other words, platinum remains vulnerable addition long liquidation. Initial support today is seen at $1,575 and then not until the $1,568 level. In order to throw off the downward bias on the charts, April platinum might have to regain the $1,679.80 level on a closing basis.

COPPER

The copper market saw a sharp downside failure overnight, as the hope of improved growth in Chinese copper demand was seemingly dashed by statements from the new Chinese leadership that economic growth was their number one priority. In other words, expectations of robust copper demand from China, in the near term, are at least temporarily lost. With the addition of the Cyprus troubles undermined global sentiment this morning, a soaring Dollar and weakness in many other physical commodity markets, the outlook for copper would seem to be highly suspect for now. News of yet another sharp rise in daily LME copper stocks of 18,100 tons continues a pattern of recent builds and that joins weakness from Asian copper price action overnight for a patently negative initial start to the US copper trade. Given the breadth of the negative sentiment this morning, it is unlikely that the US NAHB housing readings or even talk of a possible US budget deal can quickly reverse the bearish track in many commodity markets. The Commitments of Traders Futures and Options report as of March 12th for Copper showed Non-Commercial traders were net short 6,119 contracts, an increase of 524 contracts. The Commercial traders were net long 9,101 contracts, an increase of 1,394 contracts. The Non-reportable traders were net short 2,982 contracts, an increase of 869 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 9,101 contracts. This represents an increase of 1,393 contracts in the net short position held by these traders.

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-- Posted Monday, 18 March 2013 | Digg This Article | Source: GoldSeek.com

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