Gold, grain, natural gas down

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Jun 28, 2013

 

Here is this week’s edition of Futures File, our weekly commodities wrap-up:
 
Gold can’t get off the mat
 
Gold prices fell sharply this week, dropping by as much as $113 per ounce (-8.7%) by Friday morning. Prices have been in a near free-fall since a Federal Reserve announcement implying that stimulus is coming to an end.
 
On Friday, a Fed official hinted that stimulus may cut back as soon as September, further weakening the gold market. Fed stimulus was a major factor behind the yellow metal’s rally from 2008-2012, and the waning stimulus is having the opposite effect, driving prices lower. Some analysts also attributed this week’s quick sell-off to US economic data, such as rebounding consumer spending, stronger consumer sentiment and exceptional pending home sales. A stronger US economy can discourage would-be gold buyers, who focus instead on real estate and stocks for investing purposes.
 
As of midday Friday, gold for August delivery was trading at $1,224, near the lowest price since the end of 2010.
 
USDA report crushes grains
 
A USDA report released Friday morning showed that US corn farmers were able to plant 97.4 million acres, a drastic increase from expectations. If the crop develops as expected, this crop would be the largest in US history. As the news broke, prices plummeted, with December corn falling as low as $5.11 per bushel, the lowest price for that market since 2011.
 
Similarly, the USDA raised its estimate of planted soybean and wheat acreage, which contributed to declines in those markets as well. With the acreage report behind them, farmers, end users and traders will quickly shift attention to the weather, which could drastically affect crop yields, especially for corn.
 
Natural gas gouged
 
Natural gas prices plummeted to a three-month low on Friday, falling as low as $3.53 per million British thermal units. Gas inventories are climbing as production continues in the face of weaker-than-expected demand.
 
In summer months, a primary source of demand for natural gas is electricity generation, but this summer has been cool across the eastern half of the country, reducing air conditioning demand. By the end of the week, natural gas for August delivery was down 23 cents (-6.1%).
 
Many traders note that the weather could turn, giving support to the market. Should hotter temperatures prevail or if there is a hurricane-driven supply disruption in the Gulf of Mexico, prices could rally sharply.

Comments

shucks

"Got Gold?" = "Got less Money?"

Contango

Re: "Weekly commodities wrap-up"

Gold is a deflationary indicator. Buy low, sell high.

DOW, S&P and Total Market Index ALL up YTD - 13%

http://markets.wsj.com/usoverview

After seeing the swoon in the stock and the bond markets, the Fed came out and said: You misunderstood us. :)

(More like a trial balloon.)

"Never attribute to malice that which is adequately explained by stupidity." - Robt. Hanlon

The Peter Principle rules the world.

shucks

"The Peter Principle rules the world"

...Interesting...
As much as you love to criticize everybody and everything - How far up did you get at anything?

Contango

Re: The Incompetent-in-Chief's African tour.

"'One of the main things that we want American companies to see is that Africa is ready to do business and that there’s huge potential there,' Obama said."

What's with this American cos. investing in African countries BS from the Sock Puppet-in-Chief?

Why isn't he in America's heartland encouraging American cos. to "do" business and employ workers here?

And, when American cos. DO invest overseas, they get excoriated by the Nobel Prize Winner and other lame-brained liberals for being Un-American.

http://www.bloomberg.com/news/20...

This Admin. is up to its eyeballs in the caca of hypocrisy.

Contango

Put in my order for a few more shares of (GLD) for Mon. morning.

Just keep movin' that avg. purchase price lower.

First Deflation - THEN - INFLATION. 'Patience' is the watch word.

http://www.businessinsider.com/f...

What goes around comes around and "this time" is NEVER different.

I read that when one of the major gold miners halts production, that'll be the bottom - Interesting.

The Big Dog's back

Answer the question derp.

Contango

Re: "Answer the question"

“I really don't have time to deal with your dr_nk__n rants today.”

- DERPITY DOG, 06/29/2013 :)

shucks

Still waiting...
How far up did you get at anything?

KURTje

Aesop's Fables. Story of the greedy man. Love it!