-- Posted Monday, 13 May 2013 | | Disqus

STATS

London Gold AM Fix $1,429.75, -$19.50 LME Copper Stocks 606,700 tons +2,450 tons.

Gold Stocks 8.062 million ounces +57,802, Silver Stocks 165.495 million ounces -878,026

Chinese equity markets were under noted pressure overnight, as slack factory data and news of a regulatory action against a Chinese insurance company unnerved some investors. However, news that China might ease property controls by the end of the year, failed to inspire investor interest and that had to discourage some players overnight. Indian shares were also lower on profit taking and also because of negative action in other Asian markets. The FTSE was under some modest early pressure today as mining shares served to drag down those markets, which in turn were indirectly pressured by the slack Chinese manufacturing news flow. European equities were weaker overnight from weakness in a couple key financial sector stocks. US equities were also weaker to start today but some traders suggest the weakness was a technical reaction to the strong gains at the end of last week. Today the markets will be presented with US retail sales figures, which are expected to be down slightly and perhaps that will add to the weak data from China overnight for a partial risk off trading session.

GOLD

While June gold was able to hold up above the Friday low in the early trade, prices were under some pressure and seemingly poised to retest the recent lows. Adverse currency market action, discouraging global economic sentiment and somewhat negative analyst dialogue on gold, has seemingly left gold prices on a back footing in the early trade today. While gold could have been lifted by news of a sharp increase in Indian gold imports for the month of April, the market might see that news as old news that was associated with the very sharp April slide in gold prices. With a key mining official overnight also suggesting that global mining concerns might have to prepare to handle sub-$1,500 gold price action, that would seem to countervail the fact that Indian April gold and silver imports rose by a startling 138% over last April's import figures! News of a delayed exploration project by a Russian gold miner might also provide some measure of support for gold today but the failure to hold above the Friday low of $1,418.50 could result in some technically related knock on selling of gold today. While a strong US currency is applying some pressure to gold, it is possible that a slightly weak retail sales result from the US later this morning, will serve to undermine the Greenback and that in turn might alleviate some of the currency related pressure on gold prices through the US scheduled data window. Comex Gold Stocks were 8.062 million ounces up 57,802 ounces. Gold stocks have declined in 13 of the last 20 days. The Commitments of Traders Futures and Options report as of May 7th for Gold showed Non-Commercial traders were net long 78,871 contracts, a decrease of 7,019 contracts. The Commercial traders were net short 77,184 contracts, a decrease of 6,647 contracts. The Non-reportable traders were net short 1,687 contracts, a decrease of 371 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 77,184 contracts. This represents a decrease of 6,648 contracts in the net long position held by these traders.

SILVER

Relatively speaking the silver market has held up better than the gold market in the early Monday US trade action. While July silver has maintained a pattern of lower highs on its charts, the silver market still sits within relatively close proximity to the Friday highs. However, adverse currency market action, slack global economic sentiment and weakness in a host of physical commodity markets early on today leaves a less than beneficial environment for silver at the start of the new trading week. Silver might be drafting some support from news of a year over year increase in Indian silver imports. One might also think that silver is set to get some minor spillover support from initial gains in copper and platinum prices in the early trade. Traders see a couple critical pivot points in July silver this morning, the initial low of $23.47 and then again down at the Friday low of $23.15. Silver might garner some support this morning from news that the Non-reportable Net Short position in silver, in the recent COT positioning report, hit a new record level at 978 contracts as of last Tuesday. However, some traders think silver is somewhat vulnerable to today's US scheduled data flows, but lately gold and silver haven't shown a consistent reaction to US data. Comex Silver Stocks were 165.495 million ounces down 878,026 ounces. Silver stocks have declined in 13 of the last 20 days. The Commitments of Traders Futures and Options report as of May 7th for Silver showed Non-Commercial traders were net long 12,522 contracts, an increase of 915 contracts. The Commercial traders were net short 13,499 contracts, a decrease of 366 contracts. The Non-reportable traders were net long 978 contracts, a decrease of 1,280 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 13,500 contracts. This represents a decrease of 365 contracts in the net long position held by these traders.

PLATINUM

The bull camp in platinum has to be a little disappointed with the markets initial reaction to overnight news flow, as fresh platinum fundamental news should have lifted prices definitively this morning. In addition to news from Johnson Matthey of a loss of at least 750,000 ounces of platinum production in South Africa in 2012 due to strikes, the market also saw the prospect of a potential global platinum deficit ahead. The widely followed platinum consulting group Johnson Matthey also suggested that platinum prices could average $1,575 an ounce over the coming 6 months and since that price is above the current level, some traders might deem that forecast as supportive. Other items that might have supported platinum prices overnight, was news of a sharp jump in Japanese platinum demand in the wake of a sharp increase in auto production demand and projections of strong Chinese platinum jewelry demand. All things considered, the platinum market has seen a definitive improvement in both demand and supply side fundamentals and that should help to underpin prices. Near term support is now seen at $1,477.30 and then more significant support is seen down at $1,472.30 but to shift the trend in platinum to the upside might require a rally back above $1,515.90. The Commitments of Traders Futures and Options report as of May 7th for Platinum showed Non-Commercial traders were net long 30,641 contracts, a decrease of 843 contracts. The Commercial traders were net short 31,583 contracts, a decrease of 893 contracts. The Non-reportable traders were net long 941 contracts, a decrease of 51 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 31,582 contracts. This represents a decrease of 894 contracts in the net long position held by these traders.

COPPER

Somewhat surprisingly copper prices in Asia managed to show some strength last night and that is surprising considering the general weak take away from Chinese economic data overnight and the general weakness seen in many Asian equity markets. Apparently some Asian copper traders saw the data overnight as a sign that fresh easing actions might be taken by the PBOC. However, Chinese governmental expenditures rose sharply in the most recent monthly figures and some traders saw the value added industrial output readings from China for April to be stronger than the prior month and that in turn resulted in a slight improvement in future Chinese copper demand expectations. In fact, copper did see a private forecast overnight that called for an increase in Chinese copper consumption and therefore the slightly higher initial price action in copper this morning, is at least partially justified by the overnight fundamental news flow. Other issues that might be providing a minor amount of pressure for copper prices this morning, is news of a increase in African copper production from Xstrata and news of a 2,450 ton increase in daily LME copper stocks. The Commitments of Traders Futures and Options report as of May 7th for Copper showed Non-Commercial traders were net short 18,464 contracts, a decrease of 4,878 contracts. The Commercial traders were net long 27,708 contracts, a decrease of 2,308 contracts. The Non-reportable traders were net short 9,244 contracts, an increase of 2,570 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 27,708 contracts. This represents a decrease of 2,308 contracts in the net short position held by these traders.

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-- Posted Monday, 13 May 2013 | Digg This Article | Source: GoldSeek.com

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