-- Posted Monday, 15 April 2013 | | Disqus

STATS

London Gold AM Fix $1,416.00, -$132.00 LME Copper Stocks 593,650 tons +3,475 tons.

Gold Stocks unchanged at 9.215 million ounces, Silver Stocks 164.664 million ounces +1,434,531

Chinese equity markets were generally weaker again overnight, as disappointing Chinese GDP readings unnerved investors and prompted profit taking from the gains forged last week. European stock indices were also weaker this morning, partially off the disappointing Chinese economic news, but also because of noted weakness in mining shares. US stocks were showing moderate early weakness, as discouraging data from inside and outside of the US over the last two weeks, has clearly left many investors concerned. Therefore US scheduled data from the Empire State Manufacturing survey and from the NAHB housing Market index could be seen as important readings from the US later this morning.

GOLD

With another massive washout overnight, the gold market is probably seeing both technical and fundamental liquidation. While some might suggest that news of a decline in Indian gold imports of 24% facilitated the latest slide in gold prices, the gold market was already fully involved in a washout before the Indian import news was known. However, seeing Indian January through March gold imports decline by 24% relative to last year and seeing predictions of a continuation of that slack demand pattern in April, has certainly weakened the foundation of gold. There are also concerns that the ECB's claim on Cyprus gold reserves could leave other central bank gold reserves in danger of being pulled onto the market. It is also possible that hints of deflation from last week contributed to the historic compacted slide in gold prices over the last two trading sessions. Some traders will suggest that gold remained vulnerable to long liquidation, because of the ongoing size of the speculative long in gold and with slack Chinese data and adverse currency market action the fundamental deck also appears to be stacked against the gold bulls. The Commitments of Traders Futures and Options report as of April 9th for Gold showed Non-Commercial traders were net long 112,551 contracts, an increase of 2,092 contracts. The Commercial traders were net short 137,264 contracts, an increase of 3,617 contracts. The Non-reportable traders were net long 24,713 contracts, an increase of 1,526 contracts. Non-Commercial and Non-reportable combined traders still held a net long position of 137,264 contracts. This represents an increase of 3,618 contracts in the net long position held by these traders. Comex Gold Stocks were unchanged at 9.215 million ounces. Comex Gold Stocks are at the lowest levels since 09/14/2009, but for the time being bullish news might not carry much weight

SILVER

With another massive slide in silver prices overnight, silver has quickly fallen down to the lowest level since October of 2010. News of slack Indian gold import demand, combined with fears of deflation and adverse currency market action seem to have perpetuated the slide in silver prices. Some players also think that metals prices in general are under some pressure off fears that central bank gold reserves could be pulled onto the open market in the face of future debt related crisis. Adding into the downside bias in silver are classic fears of slowing and ideas that industrial and investment demand for silver and other physical commodities will remain weak. However, silver wasn't nearly as vulnerable as gold, with respect to its speculative long positioning and with the subsequent slide in silver prices, it is possible that silver has already liquidated a large portion of its speculative long positioning. The Commitments of Traders Futures and Options report as of April 9th for Silver showed Non-Commercial traders were net long 7,065 contracts, an increase of 477 contracts. The Commercial traders were net short 17,376 contracts, an increase of 192 contracts. The Non-reportable traders were net long 10,310 contracts, a decrease of 286 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 17,375 contracts. This represents an increase of 191 contracts in the net long position held by these traders. From the COT report mark off, to the low this morning, May silver has fallen another $4.55 an ounce and that might leave the non-commercial and Non-reportable net positioning in a net short standing. Comex Silver Stocks were 164.664 million ounces up 1,434,531 ounces. Stocks have increased 12 of the last 20 days.

PLATINUM

The platinum market wasn't immune to the travails in gold and silver overnight but the sharp slide in platinum and palladium prices is likely to have rather significant long term ramifications on production in South Africa. With many South African miners already losing money with platinum prices trading between $1,700 and $1,600 an ounce the recent slide to $1,430 an ounce in platinum could cause trouble on the ground. However, platinum was probably vulnerable to spec long liquidation, with the long positioning earlier this year posting a record long reading. In fact, as of April 9th, the non-reportable and Non-commercial net long positioning was still at a somewhat lofty 37,218 contracts. The Commitments of Traders Futures and Options report as of April 9th for Platinum showed Non-Commercial traders were net long 33,531 contracts, a decrease of 3,885 contracts. The Commercial traders were net short 37,218 contracts, a decrease of 5,094 contracts. The Non-reportable traders were net long 3,687 contracts, a decrease of 1,209 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 37,218 contracts. This represents a decrease of 5,094 contracts in the net long position held by these traders. Long term value might not be seen until the $1,400 level, which would put platinum down to the lowest levels since August of last year.

COPPER

Like the rest of the metals complex, copper has fallen victim to big picture deflationary slowing fears. With Chinese economic readings overnight undermining an already vulnerable demand picture, LME copper stocks continuing to rise sharply and the copper market facing ongoing adversity from the currency markets, the path of least resistance has clearly remained down. Clearly the slide this morning might put the Non-commercial and Non-reportable net short in copper near a fresh record level, but the copper market might not be able to turn back up, until the macro economic picture improves. In fact, seeing another massive single day rise in LME copper stocks overnight of 17,525 tons, some fundamental players might suggest that the bear fundamentals are still pilling on. The Commitments of Traders Futures and Options report as of April 9th for Copper showed Non-Commercial traders were net short 27,344 contracts, an increase of 266 contracts. The Commercial traders were net long 28,729 contracts, an increase of 1,593 contracts. The Non-reportable traders were net short 1,386 contracts, an increase of 1,329 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 28,730 contracts. This represents an increase of 1,595 contracts in the net short position held by these traders. In short, fears of slack US and Chinese demand gives the bear camp a rather definitive edge.

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-- Posted Monday, 15 April 2013 | Digg This Article | Source: GoldSeek.com

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