Author: SondraHunter

The price of an ounce of gold climbed back over $1,600 today as fresh new year buying supported the precious metal after it bounced off of key technical levels and the US dollar gave up some gains on currency markets.

Latest Gold Futures Price

Gold for February delivery was up $38.60 at $1,605.40 an ounce at the Comex division of the NYMEX. The gold price has traded as high as $1,608.70 and as low as $1,566.80 an ounce today while the spot price was up $36, according to Kitco’s gold index.

It’s All About The Euro

“It’s all about the euro. Gold can’t sustain the rally for just a day.” says Anthony Neglia, president of Tower Trading, who says that higher gold prices have more to prove despite the fact that they bounced off $1,523 an ounce, a key technical level.

Neglia, who is selling rallies and needs to see gold close over $1,625 an ounce to get more optimistic.

A weaker US dollar and stronger euro were helping support higher gold prices. However, those remembering gold’s volatility, that gold closed down 18% from its intra day high of $1,923 might be reluctant to bet big on gold unless it rockets higher.

In 2011 investors saw Gold perform outstandingly in the quiet season in July and August. $2,000 and ounce looked a certainty before the end of the year, but then unusual forces pummelled the gold price and all other global financial markets.

We will have to wait and see what this year brings for gold prices however clues to future direction could come from suggestions that certain African countries will nationalise their mining industries and that the US will again confiscate gold from its citizens in a move that would allow it to suppport a global financial recovery.

And maybe John Soros (one of the world’s leading gold bugs) knows something we don’t – he has been selling gold.

If anyone knows for sure that the price of gold will be in three months, six months or a year, that person could make huge profits. For the rest of us, volatility in the gold market is difficult to out manoeuvre.

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Price of gold moves back over $1600 an ounce on weaker US dollar

Peak oil theories over the last few years are now not in the spotlight that rules over oil prices this year as the new king of market movers, the “global economic uncertainty” looks set to be a game changer in the coming months ahead.

IEA Oil Report 2012

The latest Monthly Oil Market Report from the US IEA (International Energy Agency) forecasts the call on OPEC crude in 2012 at 30.2 million barrels per day. It also forecasts global oil demand will average 90.3 million barrels per day in 2012, an increase of 1.3 million over 2011.

However, the crude oil markets are expected to remain volatile throughout 2012, with the fundamentals of oil supply and demand continuing to take a back seat to the debt situation in Europe and tensions in the Middle East, with Iran in the driving seat.

“Given already very low European crude inventories, a spate of precautionary buying and escalating tensions surrounding the Iranian issue could sustain prompt prices at levels higher than otherwise, amid the growing concerns about the euro zone and weaker global economic activity for 2012.” the IEA said on 12th December.

Iran and Oil Supplies

Turning to oil supplies, the Iranian oil issue remains unclear, as the USA and its allies along with the EU are considering new sanctions on the Iranian oil as we know which increase fears that it will curb the oil supply, which will push oil prices to the upside strongly, and from the Iranian side, it said that if any sanctions happened, it will stop oil passing from the Strait of Hormuz.

European Debt

Back to Europe which remained for the past year the main factor that drive global markets, as the crisis is deepening and contagion risks are appearing, where many negative consequences can be noticed, however, hopes increased at the beginning of the year that serious measures would be implemented to halt the crisis’ train.

US Dollar and Oil Prices

On the other hand, the US dollar is encouraging crude oil to continue this upside journey, as it declined at the beginning of the year due to different factors. The ICE US Dollar Index opened the session at 80.27 and recorded a high of 80.29 then it declined to reach so far a low of 79.88, and is currently trading around 79.95.

In general, trading volumes remain mightily low, which give space for any minor factor to affect crude heavily and give it momentum, where fluctuations may be evident ahead of the American data which may add positive signs for the world’s largest economy.

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Peak oil leaves the spotlight as global economic uncertainty rules oil prices

The price of Brent crude oil rose to above $108 a barrel in early trading on Tuesday as China’s manufacturing activity expanded slightly, lifting hopes of higher oil demand, which in turn normally means higher oil prices.

Latest Brent Oil Price

In London, Brent crude oil futures for February 2012 delivery was trading at $108.84 a barrel, 07.43 GMT this morning on the ICE Futures Exchange. Oil markets were closed yesterday.

China Manufacturing Data

In China, activity at big manufacturers expanded slightly in December, temporarily putting to rest fears that the world’s second largest economy could slow sharply in the wake of the euro zone crisis and hurt oil demand.

China’s official purchasing managers’ index (PMI) rose to 50.3 in December 2011 from 49 in November, indicating a slight expansion in business activity in China’s factory sector.

“China’s PMI number looks positive, better than most people had expected earlier on. “But caution remains in the market. The euro zone economy is declining, it’s in negative growth.” said Huang Yiping, chief economist for emerging Asia at Barclays Capital in Hong Kong.

Europe accounts for than 20 percent of China’s export market, Huang said.

Brent crude climbed $1.27 to $108.65 a barrel by 05.00 GMT on the first day of trading for 2012. US Light crude oil futures rose $1.69 to $100.52 a barrel on the NYMEX.

“This expansion in manufacturing data has helped change sentiment in the market on the first day of trading.” said Victor Shum, an oil consultant at Purvin & Gertz.

“Over the next few months, it will be a balance of economic issues in Europe and the US versus bullish geopolitical factors and the reality of economic growth in major Asian economies.” Shum added.

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Brent oil price climbs to $109 a barrel as China data pleases

US WTI crude oil futures kick off the new years trading session back near $101 a barrel as oil prices bounced on increased concerns over Iran that could lead to crude oil supply disruptions in the Strait of Hormuz.

Latest WTI Oil Price

US Light crude oil futures for February 2012 delivery was trading at $100.76 a barrel, 07.22 GMT this morning in electronic trading on the NYMEX.

Global oil markets were closed on Monday, local time, for the New Year’s Day holiday.

Concerns Over Iran Boost Oil Prices

Iran on Monday said it had tested two long range missiles near the Strait of Hormuz, amid growing tensions with the West over the country’s nuclear program.

The latest military maneuvers came after reports over the weekend that Iranian scientists had developed their first nuclear fuel rod despite United Nations sanctions and measures by the US to stop the country’s atomic work. On Saturday, US President Barack Obama signed new sanctions against Iran into law, targeting the country’s central bank, oil exports and financial sector.

In response, Iran has warned it could shut the strategic Strait of Hormuz, a narrow Gulf shipping lane through which 40 percent of the world’s oil passes.

The US and its European allies accuse Iran of using its nuclear program as a cover to develop atomic weapons. Iran denies the charge, saying the program is for peaceful purposes and is geared towards generating electricity.

Oil prices are essentially driven by geopolitical risk premiums and it is precisely because the actions of nations cannot be predicted that so many are expecting 2012 to usher in far higher oil prices.

Just last week oil prices looked poised to react to escalating tensions between the US and Iran. Iran, the world’s fifth largest oil producer, threatened to choke off oil flows through the Strait of Hormuz as it looks for ways to punish the west for its proposed sanctions on the country.

Meanwhile, French foreign minister Alain Juppe said on Tuesday that Iran was continuing to develop nuclear weapons and called for stronger sanctions against Tehran.

“Iran is pursuing the development of its nuclear arms, I have no doubt about it,” he told French television I-Tele.

“The last report by the International Atomic Energy Agency is quite explicit on this point. This is why France, without closing the path of negotiation and dialogue with Iran, wants stricter sanctions.” Juppe added.

Iran is facing sanctions from the US and Europe, which are targeting the halting of Iran’s controversial nuclear activities.

Iran’s Rial Slides Against US Dollar

Iran’s currency dropped 12 percent against the US dollar in market trading today after the US unveiled fresh sanctions targeting its central bank. According to reports, the Iranian rial was being traded at 17,800 to the US dollar by money changers in Tehran on Monday, down from 15,900 on Sunday.

The Iranian central bank’s website showed the exchange rate as 11,180 rial to one US dollar.

“The sanctions will force a choice between buying Iranian oil or engaging in the US financial system, the largest in the world. That is going to change the risk calculus for a lot of folks.” said Brian Katulis of the Center for American Progress.

This has led to speculation that some firms may now try to withdraw capital from Iran. According to media reports, money changers in Tehran had stopped selling the US dollar in the hope that they will get an even better rate in coming days.

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US WTI crude oil trading near $101 a barrel on increased concerns over Iran

WTI crude oil continues to press 100 level as supported by supply worries. Syrian Oil Minister Sufian Alao said over the weekend Syria has reduced oil production by 30-35% on “dark sanctions that no other country has been through before”. Alao noted they’re facing difficulties in exports. The country’s production capacity was at abound 380k bpd while refining capacity was at around 250k bpd. EU has stepped up it’s sanctions against the country’s oil industry while Arab League also imposed sanctions on financial and other dealings with Syria.

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WTI Crude Oil Pressing 100 on Supply Concern

Brent oil futures open Monday’s trading session at $103 a barrel as oil prices again look volatile, mainly on speculation that EU leaders may struggle in their latest attempt to contain their debt crisis that threatens to slow European economic growth and demand for oil.

Latest Brent Oil Price

In London, Brent crude oil futures for February 2012 delivery was trading at $102.87 a barrel, 07.55 GMT this morning on the ICE Futures Exchange after 4 straight trading days losses last week.

European Oil Demand

Europe’s crude demand may fall 2.8 percent in the first quarter of 2012 from this year’s fourth quarter, the US EIA said in its monthly report on 13th December.

“The demand picture is starting to look weak. You are seeing continued news that reinforces a slowdown and that’s weighing on the price of crude.” said Jonathan Barratt, MD of Commodity Broking Services, Sydney.

“The near term direction for the economy is downward, so it doesn’t surprise me that you see prices going down.” said Jeremy Friesen, a commodity strategist at Societe Generale, Hong Kong.

Meanwhile, oil traders will be watching events in Iran this week amid the lingering prospect of sanctions over Tehran’s nuclear program choking off supplies from the world’s fifth largest crude oil exporter.

“Markets will be keeping a close eye on developments regarding Iran, but at this stage it hasn’t had much impact on prices.” analysts at ANZ Bank said in a research note.

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Brent oil trading at $103 as focus remains on European debt situation

Financial markets recovered modestly as driven by stronger-than-expected US data and the successful Spanish bond auction. Wall Street rose with DJIA and S&P 500 gaining +0.38% and +0.32% respectively. In the commodity sector, Brent crude for December delivery closed almost flat while the equivalent WTI crude contract dropped more than -1% amid demand concerns after OPEC’s raise in output ceiling.

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Risk Appetite Increases as US Data Surprises to the Upside, Spanish Auction Beats Expectations

Financial markets recovered after the sharp fall yesterday but sentiment remained fragile. China’s PMI improved in December but stayed in the contractionary territory. The situation was similar in the Eurozone. The SNB left the policy rate and the currency target unchanged but warned of intervention if demand for the country’s exports decline sharply. The central bank also warned of great uncertainty in the the 17-nation Eurozone.

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Sentiment Remains Weak as Manufacturing Activities Continue to Contract

US WTI oil futures slid nearly 5 percent lower and back near $95 in a frantic sell-off yesterday after traders realised that the rally on Tuesday focusing on the possible closure of the Strait of Hormuz had no firm basis.

Latest WTI Oil Price

US Light crude oil futures for January 2012 delivery was trading at $95.56 a barrel, 07.40 GMT this morning in electronic trading on the NYMEX.

The US oil contract closed Wednesday’s session at $94.92 a barrel, or 4.8 percent lower.

Broad Commodity Sell Off

In the commodities markets, copper fell nearly 5 percent and gold tumbled about 3 percent, battered by the weaker euro and as the stronger US dollar nudged investors to trim holdings in a broad range of assets, including stock markets.

“Risk reduction has been a theme with investors looking to cut losses on the year and ahead of a choppy 2012, but losses today were compounded by the drop in physical commodities markets.” said Larry Jiang, chief investment strategist at Guotai Junan International Securities in Hong Kong.

US Crude Oil Inventories

Meanwhile, US crude oil inventories fell last week, US government data showed, but the data was basically in line with consensus estimates and will do little to change the bearish tone set by developments out of Europe.

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WTI crude oil price slides 5 percent, trading back at $95 a barrel