-- Posted Monday, 1 July 2013 | | Disqus

STATS

London Gold AM Fix $1,243.50 +$40.25 LME Copper Stocks 662,275 tons, -3,500 tons.

Gold Stocks 7.498 million ounces -57,798, Silver Stocks 164.495 million ounces +49,208

Chinese equity markets rebounded overnight, as the money market fears there have apparently moderated slightly. European shares were higher to start, but they were somewhat undermined in the wake of Euro zone PMI data that failed to show significant improvement relative to the prior month. However, US stocks were showing initial gains and a host of physical commodity markets were also tracking higher as if the trade was anticipating a positive risk-on trading session. The US scheduled report slate today, includes US Manufacturing PMI, Construction Spending, ISM Manufacturing and there will also be a global manufacturing PMI release out just ahead of mid session today.

GOLD

The gold market rebounded today in the wake of a significant slide last week of roughly $120 an ounce! Some of the recovery action today might be the result of a technically oversold status from the June high to low slide of $244 an ounce. On the other hand, the press overnight noted a slight increase in bargain hunting buying in Asia and some of that buying might be the result of some traders looking ahead to the beginning of labor talks in South Africa on July 11th. It is also possible that somewhat weak Chinese economic data and a lack of improvement in Euro zone PMI results, sparked a minor wave of renewed safe haven interest in gold. In looking ahead, the labor talks in South Africa should begin to capture the attention of the trade, as the unions are asking for significant wage increases and the companies have already suggested that even 10% wage increases, are too much for high cost of production gold producers. The Commitments of Traders Futures and Options report as of June 25th for Gold showed Non-Commercial traders were net long 32,869 contracts, a decrease of 10,475 contracts. The Commercial traders were net short 36,012 contracts, a decrease of 8,565 contracts. The Non-reportable traders were net long 3,144 contracts, an increase of 1,911 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 36,013 contracts. This represents a decrease of 8,564 contracts in the net long position held by these traders. However, while the non-commercial and non-reportable long position declined in the latest report, the gold market fell an additional $96 an ounce after the COT report was compiled, to the low posted on Friday. Comex Gold Stocks were 7.498 million ounces down 57,798 ounces. Comex Gold Stocks are at the lowest levels since 05/16/2008.

SILVER

The silver market has also showed some recovery action from last week's spike low and some of that action might have been technical short covering after the severe slide seen throughout the month of June. Like gold, silver might also be seeing some bargain hunting buying in the wake of slack economic data overnight, as that news suggests central bankers will have to continue to provide stimulus to the struggling economy. It is also possible that some of the buying this morning is position balancing from the end of quarter, but with a temporary rise back above $20.00, it is also possible that some of the gains today are the result of profit stops being triggered. While silver probably won't see as much direct impact from South African mining talks, as might be seen in the gold market, it is possible that tensions and violence into the wage talks, will lend silver some spillover support to silver over the coming two weeks of trade. Comex Silver Stocks were 164.495 million ounces up 49,208 ounces. Silver stocks have declined in 13 of the last 20 days. The Commitments of Traders Futures and Options report as of June 25th for Silver showed Non-Commercial traders were net long 1,645 contracts, a decrease of 2,429 contracts. The Commercial traders were net short 5,141 contracts, a decrease of 1,281 contracts. The Non-reportable traders were net long 3,496 contracts, an increase of 1,148 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 5,141 contracts. This represents a decrease of 1,281 contracts in the net long position held by these traders.

PLATINUM

The platinum market has also managed a quasi upside breakout on the charts this morning with a probe back above $1,350. As in other metals markets the sharp slide in June, which came on the heels of an extremely weak February through April slide, has clearly forced a large number of weak handed longs from their positions. As in the gold market, it is likely that the platinum trade will begin to look ahead to South African wage talks, which are expected to kick off on July 11th. The Commitments of Traders Futures and Options report as of June 25th for Platinum showed Non-Commercial traders were net long 21,050 contracts, a decrease of 3,556 contracts. The Commercial traders were net short 20,710 contracts, a decrease of 4,139 contracts. The Non-reportable traders were net short 340 contracts, an increase of 584 contracts which represents a change from a net long to net short position. Non-Commercial and Non-reportable combined traders held a net long position of 20,710 contracts. This represents a decrease of 4,140 contracts in the net long position held by these traders. A normal retracement of the June slide in platinum prices would allow for a recovery to $1,390 and we suspect that support in Platinum has now moved up to $1,335. Aggressive longer term position players should attempt to be long for the coming two weeks.

COPPER

The copper market has leapt higher to start today, perhaps because of the extreme oversold technical condition registered in last week's COT positioning report. In fact, the "combined" spec and fund Net Short position in copper actually hit a new record level at 39,758 contracts, while the Commitments of Traders Futures and Options report as of June 25th for Copper also showed that Non-Commercial traders were net short 31,552 contracts, for a weekly increase of 5,331 contracts. The Commercial traders were net long 39,758 contracts, an increase of 7,431 contracts. The Non-reportable traders were net short 8,206 contracts, an increase of 2,100 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 39,758 contracts. This represents an increase of 7,431 contracts in the net short position held by these traders. Some weak bargain hunting buying in Asia overnight seemed to overcome somewhat slack manufacturing data from China and the Euro zone and perhaps that is because of the somewhat positive risk-on vibe flowing from the US markets in the early Monday trade. In conclusion, less fear of tightening by central banks and some technical short covering action looks to temporarily put the bull camp in control.

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

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