-- Posted Monday, 1 April 2013 | | Disqus

STATS

London Gold AM Fix $1,602.50, N.A. LME Copper Stocks 569,775 tons N.A.

Gold Stocks unchanged at 9.279 million ounces, Silver Stocks 164.163 million ounces -601,216

Chinese Shares were under pressure overnight after slack data in China from an official purchasing manager's survey, sparked ideas that the recovery in China might be less than stellar. Japanese stocks were also weaker, as some fund managers banked profits from the recent run up perhaps because of the looming uncertainty from the BOJ meeting. European markets were mostly closed to the Easter holiday, but despite the reduced activity, Cyprus contagion fears were in the headlines again. US stocks were starting out weaker off the Cyprus bank situation and perhaps because of Asian economic news. The US will see a US Manufacturing PMI report, Construction Spending and an ISM Manufacturing Report during the session today.

GOLD

June gold prices overnight were able to mount a minimal bounce, as traders were seeing some renewed macro economic and geopolitical anxiety in the headlines. While contagion fears from Cyprus might have prompted some minor flight to quality buying of gold last night, the gold market might also have been held back somewhat by Chinese economic readings that were released overnight, as those readings (which were actually marginally positive) weren't able to tamp down economic uncertainty in Asia. The Commitments of Traders Futures and Options report as of March 26th for Gold showed Non-Commercial traders were net long 127,732 contracts, a decrease of 264 contracts. The Commercial traders were net short 154,079 contracts, a decrease of 10 contracts. The Non-reportable traders were net long 26,347 contracts, an increase of 254 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 154,079 contracts. This represents a decrease of only 10 contracts in the net long position held by these traders. With only a marginal decrease in the Non-commercial and Non-reportable net long positioning in gold, some players might suggest that gold remains vulnerable to technical long liquidation pressures. Comex Gold Stocks were unchanged at 9.279 million ounces. Gold stocks have declined in 15 of the last 20 days. US economic readings today are mostly third tier economic readings and therefore the direction of gold prices today, might be dictated by action in US equities, or by action in the currency markets.

SILVER

Unlike gold, May silver prices overnight fell to a fresh new low for the move on the charts. With the initial slide overnight, May silver prices fell down to the lowest level since August 1st of 2012. Slack action in copper to start, less than impressive Chinese economic readings overnight and lingering fears of pressure from the currency markets apparently left the bear camp in control of silver prices in the early Monday US trade action. The US economic report slate today might not offer up much in the way of direction for the silver trade, as the reports are second and third tier reports. Comex Silver Stocks were 164.163 million ounces down 601,216 ounces. The Commitments of Traders Futures and Options report as of March 26th for Silver showed Non-Commercial traders were net long 9,870 contracts, a decrease of 3,155 contracts. The Commercial traders were net short 22,894 contracts, a decrease of 2,137 contracts. The Non-reportable traders were net long 13,025 contracts, an increase of 1,020 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 22,895 contracts. This represents a decrease of 2,135 contracts in the net long position held by these traders.

PLATINUM

The platinum market was showing some modest upside action this morning perhaps in a delayed reaction to news of an alliance between two major platinum producing countries at the end of last week. Apparently Russia and South Africa have joined forces in an effort to deal with "over supply". With a world platinum market deficit condition last year and prospects for another platinum deficit this year, the new platinum consortium would seem to be forming to boost prices, especially since South African producers have seen sharp gains in production costs and they have generally posted dismal results. However, the new entity supposedly suggested that platinum prices have not been specifically addressed yet. Some traders suggest that an OPEC like cartel, that controls all but 20% of the world's platinum production, could be effective if they can manage to reduce physical supply flow to the world market. The Commitments of Traders Futures and Options report as of March 26th for Platinum showed Non-Commercial traders were net long 35,861 contracts, an increase of 416 contracts. The Commercial traders were net short 40,258 contracts, a decrease of 228 contracts. The Non-reportable traders were net long 4,396 contracts, a decrease of 645 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 40,257 contracts. This represents a decrease of only 229 contracts in the net long position held by these traders. A slightly higher track in platinum to start the new trading week, but with the net spec long in platinum sitting at 40,257 contracts and the platinum market to the highs this morning sitting $15 an ounce above the level where the COT report was measured, the market might remain somewhat overbought. Critical support is seen at $1,576 and resistance is seen up at $1,590.

COPPER

With a massive downside extension on the charts overnight it is clear that Chinese news out since the Thursday US close has been seen as bearish toward copper prices. With Shanghai copper stocks at the end of last week rising again by a noted 8,318 tons, they now stand at 247,591 tons! The copper market has discounted potential supply side threats from Chile overnight, therefore it is clear that the copper trade is somewhat uninterested in potentially supportive supply side developments. However, copper markets don't see any actual supply disruptions yet from the Chilean labor situation just yet. Fortunately for the bull camp, the copper market won't have to digest another daily LME copper stock build, as that market remains closed for holiday. In the end, seeing a long string of builds in two different exchange stock readings certainly leaves the threat of oversupply in the headlines. The Commitments of Traders Futures and Options report as of March 26th for Copper showed Non-Commercial traders were net short 20,311 contracts, an increase of 4,001 contracts. The Commercial traders were net long 21,807 contracts, an increase of 5,677 contracts. The Non-reportable traders were net short 1,495 contracts, an increase of 1,674 contracts which represents a change from a net long to net short position. Non-Commercial and Non-reportable combined traders held a net short position of 21,806 contracts. This represents an increase of 5,675 contracts in the net short position held by these traders. Some players might suggest that a net combined Non-commercial and Non-reportable short position of 21,806 contracts, combined with losses of roughly 10 cents per pound to the lows this morning, might effectively push copper to a record short in the combined spec categories. Keep in mind, Chinese economic readings overnight were positive, but they were not as positive as expectations!

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-- Posted Monday, 1 April 2013 | Digg This Article | Source: GoldSeek.com

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