Gold Posts Modest Gains Amid Heightened Geopolitical Tensions

P.M. Kitco Roundup:

                  Gold prices ended the U.S. day session modestly higher Monday as heightened geopolitical tensions keep a safe-haven bid in the market. August Comex gold was last up $3.80 at $1,313.20 an ounce. Spot gold was last quoted up $1.80 at $1,313.25. December Comex silver last traded up $0.126 at $21.070 an ounce.

Geopolitics remained on the front burner of the market place to start this week. Last week’s downing of a Malaysian airliner on the Russia-Ukraine border and Israel’s ground offensive against Hamas on the Gaza strip are the dominant fundamentals in the markets Monday morning. The U.S. has accused Russian separatists of shooting down the Malaysian passenger jet. After some initial trepidation European leaders have condemned Russia and its president, Vladimir Putin. Meantime, Israel continues to try to root out Hamas and its missile launchers on the Gaza strip. So far, the Israel-Hamas conflict has not spread to unrest in other Middle Eastern regions. However, these two major geopolitical matters are flashpoints for the markets and are likely to significantly influence trading and markets for at least the near term. My sense is that it’s presently a 50-50 chance that these two geopolitical matters have peaked as far as influencing markets.

Gold, U.S. Treasuries and the U.S. dollar are safe-haven assets that have seen support from the heightened world tensions. Surprising to many is the fact that U.S. stock indexes have been resilient during the geopolitical unrest. The three major U.S. stock indexes showed solid gains Friday and are not far below their recent record or multi-year highs.

U.S. economic data due for release Monday was light and included the Chicago Fed national activity index. The data was not a markets-mover.

The London P.M. gold fix was $1,311.50 versus the previous A.M. fixing of $1,312.75.

Technically, August gold futures prices closed near mid-range Monday. Gold bulls and bears are on a level near-term technical playing field. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,346.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the July low of $1,292.60. First resistance is seen at Monday’s high of $1,319.00 and then at $1,325.90. First support is seen at Monday’s low of $1,307.90 and then at $1,300.00. Wyckoff’s Market Rating: 5.0

December silver futures prices closed near mid-range Monday. The bulls have the slight near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.67 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the July low of $20.70. First resistance is seen at Monday’s high of $21.21 and then at $21.37. Next support is seen at Monday’s low of $20.95 and then at $20.84. Wyckoff's Market Rating: 5.5.

December N.Y. copper closed up 150 points at 320.75 cents Monday. Prices closed near the session high on short covering. Copper have lost their near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 325.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 316.50 cents. First resistance is seen at Monday’s high of 321.10 cents and then at 322.50 cents. First support is seen at Monday’s low of 318.20 cents and then at last week’s low of 317.55 cents. Wyckoff's Market Rating: 5.0. - Kitco

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BMO: Average Copper Prices To Slide To $2.90/Lb. In 2016

                                
                              BMO looks for average copper prices to fall back to around $2.90 a pound in 2016, before recovering to longer-term levels around $3. The red metal has pulled back from recent highs above $3.25. BMO says those highs were driven by China’s Purchasing Managers Index and gross domestic product data, but could would be sustained only if lingering concerns such as China’s property sector improved. “Thus far, housing starts remain down in H1/14, with June recently reported at minus 9% year-on-year,” BMO says. “Further, while new yuan loans increased 26% in June following a ‘mini stimulus’ program easing credit restrictions for certain sectors, BMO Research understands that the vast majority of new loans were short term in nature and government-led.” On the supply side, mining companies reporting second-quarter and first-half copper output figures thus far have either met or beat BMO expectations, with guidance either flat or increased for this year, the firm continues. “This continues to point to strong supply growth near term, and the risk that, like 2013, this year’s ‘supply disruption’ could be lower than the historical average of 5% and consensus supply revised upward,” BMO says. - Kitco

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Gold, silver rebound ahead of U.S. retail sales data, Yellen testimony

                         Gold and silver futures regained strength on Tuesday, as investors looked ahead to highly anticipated comments by Federal Reserve Chair Janet Yellen later in the day as well as key U.S. data.

Gold tumbled to $1,302.20 an ounce on Monday, the lowest since June 19, before settling at $1,306.70, down 2.3%, or $30.70, as profit-taking and stronger global equities dented the precious metal's safe-haven appeal.On the Comex division of the New York Mercantile Exchange, goldfor August delivery tacked on 0.46%, or $6.00, to trade at $1,312.70 a troy ounce during U.S. morning hours. Prices held in a range between $1,306.70 and $1,314.50.

Gold futures were likely to find support at $1,302.20, the low from July 14 and resistance at $1,340.90, the high from July 14.

Also on the Comex, silver for September delivery inched up 0.64%, or 13.4 cents, to trade at $21.04 a troy ounce.

Market players were eyeing Fed Chair Yellen's testimony in a U.S. Senate committee at 10:00 a.m. Eastern for signs of when the central bank would begin increasing interest rates.

Before that, retail sales for June and the New York Fed Empire manufacturing index for July will be released.

In the minutes of the Fed's June policy meeting released last week, the Fed predicted an October close to its bond-buying stimulus program but did not hint at a timetable as to when interest rates may begin to rise afterwards.

Elsewhere in metals trading, copper for September delivery dipped 0.09%, or 0.3 cents, to trade at $3.246 a pound.

Copper traders looked ahead to a raft of Chinese economic data later this week, including reports on second quarter gross domestic product, industrial production and retail sales.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption.

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Copper falls to 2-week low ahead of Yellen testimony

                      Copper futures fell to a two-week low on Tuesday, as markets were jittery ahead of highly anticipated comments by Federal Reserve Chair Janet Yellen later in the day.

On the Comex division of the New York Mercantile Exchange, copper for September delivery hit a session low of $3.224 a pound, the weakest level since July 2, before trimming losses to last trade at $3.248 during European morning hours, down 0.04%, or 0.1 cents.

Copper prices ended Monday’s session down 0.61%, or 2.0 cents, to settle at $3.249 a pound.

Futures were likely to find support at $3.183 a pound, the low from July 2 and resistance at $3.294 a pound, the high from July 14.

Market players remained cautious before Fed Chair Yellen testifies before Congress at 10:00 a.m. Eastern, amid speculation over when the central bank will start raising interest rates.

Before that, retail sales for June and the New York Fed Empire manufacturing index for July will be released.

In the minutes of the Fed's June policy meeting released last week, the Fed predicted an October close to its bond-buying stimulus program but did not hint at a timetable as to when interest rates may begin to rise afterwards.

Copper traders also looked ahead to a raft of Chinese economic data later this week, including reports on second quarter gross domestic product, industrial production and retail sales.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption.

Elsewhere on the Comex, gold for August delivery inched up 0.41%, or $5.40, to trade at $1,312.10 a troy ounce, while silver for September delivery advanced 0.52%, or 10.9 cents, to trade at $21.02 an ounce. - investing.com

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Gold prices gain in Asia ahead of Yellen testimony to Congress

               Gold prices gained in Asia on Tuesday ahead of testimeony from the U.S. Federal Reserve chief to Congress and continued tension in the euro zone over Portugal.

On the Comex division of the New York Mercantile Exchange, goldfutures for August delivery traded at $1,308.70 a troy ounce, up 0.15%, after hitting an overnight session low of $1,304.10 and off a high of $1,340.70.

Gold prices recently shot up on safe-haven demand after the parent company of Portugal's largest bank, Banco Espírito Santo, said last week that it missed commercial paper payments.

The announcement rattled nerves across the globe, fueling concerns surrounding the soundness of the banking sector in Portugal as well as in Spain and Italy.

On Monday, gold dropped after the bank as well as Portuguese government and monetary authorities assured the world the country's financial system is not in crisis.

Meanwhile in the U.S., stocks rose on hopes for upbeat earnings this week, which also chipped away at gold's use as a hedge.

Silver for September delivery rose 0.23% at $20.962 a troy ounce. Copper futures for September delivery were down 0.02% at $3.253 a pound. - investing.com

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NYMEX crude edges up in Asia ahead of U.S. stockpiles data

          Crude prices held steady in Asia on Tuesday ahead of U.S. stockpile reports this week.

On the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in August traded at $100.93 a barrel, up 0.01%, after closing at $101.83 a barrel overnight.Industry data due later Tuesday is expected to show a drop in U.S. crude stocks in line with last week's 1.7 million barrel decline, while government data on Wednesday is expected to show a fall of 2.025 million barrels as the summer driving season reaches high gear.

Brent oil on the ICE futures exchange in London gained 0.3% to $106.98 a barrel on Monday.

Fears that military conflicts in the Middle East will disrupt supplies have waned, sending oil prices falling in recent sessions, though by Monday investors felt the commodity had fallen too far, which sent prices jumping in and out of positive territory.

Libya recently struck a deal with rebels occupying oil ports under terms that would have insurgents give up control over terminals that have been closed for a year.

The deal should add 500,000 barrels per day of crude back into the global energy market.

Separately, ongoing expectations for the Iraqi insurgency to remain to the north of the country's oilfields also allowed prices to drop. - investing.com

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Natural gas edges lower on forecasts for U.S. summertime cool snap

           Natural gas futures edged lower on Monday after updated weather-forecasting models predicted below-normal temperatures to sweep in from Canada into the Midwest this week and trek east.

On the New York Mercantile Exchange, natural gas futures for delivery in August traded at $4.130 per million British thermal units during U.S. trading, down 0.40%. The commodity hit a session high of $4.172 and a low of $4.096.

The August contract settled down 0.63% on Friday to end at $4.146 per million British thermal units.

Natural gas futures were likely to find support at $4.096 per million British thermal units, the session low, and resistance at $4.356, the high from July 7.

A weather system similar to the Polar Vortex from last winter will bring below-normal temperatures to the U.S. Midwest and head east this week, which sent natural gas prices dipping on Monday.

Below-normal temperatures this time of year cut into demand for air conditioning, which curbs demand for natural gas.

Supply data from last week pressured prices as well, though bottom fishing prevented prices from plummeting and stabilized the commodity.

The U.S. Energy Information Administration said in its weekly report last Thursday that natural gas storage in the U.S. in the week ending July 4 rose by 93 billion cubic feet, above expectations for an increase of 92 billion cubic feet.

The five-year average change for the week is an increase of 72 billion cubic feet.

Total U.S. natural gas storage stood at 2.022 trillion cubic feet. Stocks were 653 billion cubic feet less than last year at this time and 769 billion cubic feet below the five-year average of 2.791 trillion cubic feet for this time of year.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in August were down 0.22% at $100.61 a barrel, while heating oil for August delivery were up 0.14% at $2.8650 per gallon. - investing.com

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Natural gas futures - weekly outlook: July 14 - 18

                  U.S. natural gas futures ended Friday’s session close to a six-month low, as concerns over tight supplies continued to fade away.

Natural gas futures ended Thursday’s session down 1.2%, or 5.0 cents, to settle at $4.120.On the New York Mercantile Exchange, natural gas for delivery in August fell to a session low of $4.106 per million British thermal units, the weakest level since January 10, before turning higher to settle at $4.146 by close of trade, up 0.63%, or 2.6 cents.

Futures were likely to find support at $4.106 per million British thermal units, the low from July 3 and resistance at $4.459, the high from July 2.

Nymex natural gas prices lost 5.06%, or 22.1 cents, on the week, the fourth consecutive weekly decline.

The U.S. Energy Information Administration said in its weekly report released Thursday that natural gas storage in the U.S. in the week ended July 4 rose by 93 billion cubic feet, above expectations for an increase of 92 billion cubic feet.

The five-year average change for the week is an increase of 72 billion cubic feet.

Total U.S. natural gas storage stood at 2.022 trillion cubic feet as of last week, 24.4% below their level this time last year and 27.5% below the five-year average.

Meanwhile, updated weather-forecasting models called for cooler temperatures across most parts of the heavily-populated Midwest and Northeast regions over the next five days.

Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers significantly decreased their bullish bets in natural gas futures in the week ending July 8.

Net longs totaled 36,906 contracts, down 32.6% from net longs of 54,778 in the previous week.

Elsewhere in the energy complex, crude oil for August delivery settled at $100.83 a barrel by close of trade on Friday, down 2.83%, or $2.94 a barrel, on the week.

Meanwhile, heating oil for August delivery slumped 1.64% on the week to settle at $2.869 per gallon by close of trade Friday. - investing.com

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Crude oil futures - weekly outlook: July 14 - 18

            Crude oil futures tumbled to multi-week lows on Friday, as worries over potential supply disruptions in the Middle East continued to subside.

On the ICE Futures Exchange in London, Brent oil for August delivery slumped to a daily low of $106.27 a barrel on Friday, the weakest level since April 8, before settling at $106.66, down 1.85%, or $2.01.

The August Brent contract lost 3.59%, or $3.98 a barrel, on the week, the biggest weekly decline since early January.

Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in August dropped to a session low of $100.44 a barrel, the weakest since May 13, before ending at $100.83 by close of trade, down 2.04%, or $2.10.

For the week, Nymex oil futures tumbled 2.83%, or $2.94 a barrel, the fourth consecutive weekly loss.

Meanwhile the spread between the Brent and the WTI crude contracts stood at $5.83 a barrel by close of trade on Friday, compared to $6.87 in the preceding week.

Investors continued to unwind positions that had priced in the possibility of major supply disruptions stemming from violence in Libya and Iraq.

Libya recently struck a deal with rebels occupying oil ports under terms that would have insurgents give up control over terminals that have been closed for a year. The deal should add 500,000 barrels per day of crude back into the global energy market.

Meanwhile, indications that Iraqi oil exports from the southern part of the country remained insulated from the sectarian violence that has swept the north in recent weeks also weighed.

Oil prices rallied to nine-month highs in June amid fears that an insurgency in northern Iraq would spread to the oil-rich south and disrupt the nation's oil production.

In the week ahead, investors will be watching testimony on monetary policy by Federal Reserve Chair Janet Yellen, as well as key data on U.S. June retail sales.

Oil traders will also look ahead to a raft of Chinese economic data this week, including reports on second quarter gross domestic product, industrial production and retail sales.

The U.S. and China are the world’s two largest oil consuming nations.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers decreased their bullish bets in New York-traded oil futures in the week ending July 8.

Net longs totaled 304,366 contracts as of last week, down 7.8% from net longs of 330,148 in the preceding week. - investing.com

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Gold / Silver / Copper futures - weekly outlook: July 14 - 18

          Gold futures ended Friday’s session little changed near a 16-week high, as demand for the precious metal remained supported amid renewed concerns over the health of Portugal’s banking sector and amid signs that U.S. interest rates will remain on hold for an extended period of time.

Gold hit $1,346.80 an ounce on Thursday, the most since March 19, before settling at $1,339.20, up 1.13%, or $14.90.On the Comex division of the New York Mercantile Exchange, goldfor August delivery slipped 0.13%, or $1.80, on Friday to end the week at $1,321.30 a troy ounce.

Gold prices were likely to find support at $1,312.10, the low from July 7 and resistance at $1,358.00, the high from March 19.

On the week, Comex gold advanced 1.2%, or $16.10 an ounce, the sixth consecutive weekly gain.

Gold prices rallied more than 1% on Thursday as concerns over the fiscal stability of Portugal’s Banco Espirito Santo (LISBON:BES) fuelled demand for safe haven assets, amid fears over the risk of contagion.

Concerns eased slightly on Friday after Portugal’s central bank said it was satisfied that the lender is able to fulfill its capital requirements.

Meanwhile, minutes of the Federal Reserve's June policy meeting released on Wednesday suggested that the central bank is in no rush to raise interest rates.

According to the minutes, officials agreed to end the central bank’s asset purchase program in October, however, little new information was revealed on when the bank could start to hike rates.

In the week ahead, investors will be watching testimony on monetary policy by Fed Chair Janet Yellen, as well as key data on June retail sales.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in gold futures in the week ending July 8.

Net longs totaled 144,272 contracts, up 5.1% from net longs of 136,929 in the preceding week.

Also on the Comex, silver for September delivery shed 0.22%, or 4.7 cents, on Friday to settle the week at $21.46 a troy ounce, as traders locked in profits after a sharp rally the day before.

Prices hit $21.63 an ounce on Thursday, the most since March 16, before settling at $21.50, up 2.09%, or 44.0 cents.

The September silver futures contract rose 1.21%, or 26.0 cents, on the week, the sixth straight weekly gain.

Data from the CFTC showed that net silver longs totaled 44,517 contracts as of last week, compared to net longs of 36,697 contracts in the preceding week.

Elsewhere in metals trading, copper for September delivery eased up 0.06%, or 0.2 cents, on Friday to settle at $3.269 a pound by close of trade.

On the week, Comex copper prices inched down 0.03%, or 0.1 cents a pound.

Copper traders looked ahead to a raft of Chinese economic data this week, including reports on second quarter gross domestic product, industrial production and retail sales.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

According to the CFTC, net copper longs totaled 38,367 contracts as of last week, compared to net longs of 24,767 contracts in the preceding week. - investing.com

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