According to the latest CFTC Report, speculators increased their overall commodity positions by 25 percent in the week ended Jan. 3. Among the notable positions, oil holdings reached a 3-week high.
Geopolitical risks—Iran, Nigeria—should continue to support WTI futures over the $100 mark. February WTI crude futures remain within Tuesday's range—$99.65 to $103.18/barrel. Brent crude prices are also slightly lower, but remain range-bound at start of 2012 rebalancing of major commodities indices (i.e., buying Brent, selling WTI).
Gold: The yellow metal is up slightly from early lows this sessionon a softening dollar, nearing $1625/ounce. Key resistance in February gold futures is seen at $1631.90/ounce.
Dennis Gartman of The Gartman Report again is targeting gold priced in euros, which is up 5 percent in the past week vs. a 2 percent gain in dollar terms.
Morgan Stanley in its latest report is targeting gold as one of its top picks for the year, preferring “defensive commodities” over cyclicals. MS also likes livestock and agricultural commodities.
Cotton: Keep an eye on cotton, too. It's showing a little strength this morning, after last week's 5 percent gain. According to the latest CFTC report, bullish bets on cotton (week ending Jan. 3) reached the most since April 2009.