Commodites: Gold, Silver, Nat Gas Rally, Crude Oil Falls

Posted by: : Paul EbelingPosted on: January 3, 2014 Commodites: Gold, Silver, Nat Gas Rally, Crude Oil Falls

Commodites: Gold, Silver, Nat Gas Rally, Crude Oil Falls

The energy sector (-1.5%) sold at the open and it remains at the bottom of the board.

WTI Crude Oil fell 3.0% to 95.49 bbl.

Feb crude oil extended losses for a 3rd session running, as a stronger DXY, and reports that Libyan protesters have agreed to reopen a Key Oil field weighed on prices Thursday.

The energy component trended lower after pulling back from its session high of 97.66 set at the open of pit trade. It fell below the 96 mark, and settled with a 3.0% loss at 95.49 bbl.

Feb Nat Gas traded around in the Green Thursday. It dipped to a session low at 4.27 per MMBtu in early afternoon pit trade, but regained momentum. It settled with a 2.1% gainer at 4.32 per MMBtu, just below its session high at 4.33 per MMBtu.

The materials sector (-0.7%) outperformed. Miners showed some strength as the Market Vectors Gold Miners ETF (NYSEArca:GDX) 21.98, +0.85 traded up 4.0%.

Feb Comex Gold futures finished its pit session with a 1.9% gainer at 1225.40 oz.

Precious metals traded higher Thursday despite the stronger US Dollat Index (DXY).

Feb Gold marked  a session low at 1216.90 in early morning pit trade and spent the remainder of the session trading in a consolidative pattern slightly above the 1220 oz.

Gold  settled at 1225.40, posting a gainer of 1.9%.

Mar Silver traded near the 20.10 mark all session,  Silver settled 3.9% higher at 20.13 oz.

Commentary

The rally in precious metals  began overseas on physical buying in Asia, with the move helped along when buy stops were triggered.

Feb Gold peaked overnight at 1,228  its strongest level in 2 wks. It backed off as far as 1,211 shortly before the New York trading day started, then moved above 1,230 towards the Comex pit close.

The Key factor is the index rebalancing.

The Standard & Poor’s Goldman Sachs Commodities Index and the Dow Jones UBS Commodities Index both increased their allocations to Gold and sSlver for Y 2014. Funds that track these must recalibrate accordingly.

There will be a significant amount of Gold and Silver purchases as a result of that index rebalancing.

Also, the year is starting with some equity-market weakness, as funds are being removed and/or reallocated from equities, given their  record highs, to some relatively low ‘value’ levels in Gold.”

Stay tuned…

HeffX-LTN

Paul Ebeling

 

 

 
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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.
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