Gold Firms, Commodities Falter on Lack of Confidence in EU
Gold priced in euros broke above a key trend line Monday morning, as safe-haven buying and upward technical momentum continue to help the precious metal rally.
Gold priced in euros is up 8 percent this month, while Comex gold futures have gained over 10 percent this January. Comex gold (priced in dollars) is slightly weaker this morning, but gold futures have recovered most of their losses, trading over $1,725 an ounce at 10am ET.
Some technical selling may be in play in Comex gold futures, traders say, since Tuesday is the first notice day for gold traded on the Comex. For those investors who do not wish to take delivery of the metal, it’s time to roll over to another month or liquidate or put up margin money to insure performance.
But overall, "technical and fundamentally, nothing has changed the course of the this market," says RBC Capital Market precious metals analyst George Gero.
COPPER: Copper and oil are lower this morning, along with equities, as traders are concerned about the likelihood that European Union leaders can solve the region's debt crisis. Copper is pulling back from a 4-month high, trading nearly 1.5 percent lower at $3.83. The metal, however, is still poised for its largest monthly increase since October, up nearly 11 percent in January.
OIL: Also weighing on oil prices are reports that Iran has delayed its vote on banning oil exports to the EU. As of 9:45 am ET, Brent crude was trading near $111 per barrel, while WTI futures lost more ground, down nearly a percent, at $98.50 per barrel. Over the weekend, members of the Iranian parliament finalized a draft bill on cutting the country's oil exports to the European states in retaliation for the EU's oil ban against Tehran, according to Iran's Fars news agency.
But several comments from OPEC leaders this morning helped to take some of the risk premium out of the oil price. OPEC Secretary General Abdalla Salem el-Badri said he does not expect a closure of the Strait of Hormuz, the key waterway between Iran and Oman that carries about 17 percent of global oil supplies daily.
El-Badri also said he thought it would be impossible to make up for the flows that come through Hormuz if the strait was closed. However, Saudi Oil Minister Ali Al Naimi reiterated that that his country will continue to provide supply to make up for any potential shortages and El-Badri agreed that the global oil market is well-supplied.
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