Do present market conditions present an opportune time to accumulate metals?
*Financial Times, by Chris Flood, May 22, 2006:
Retreat across commodities continues
"The retreat across commodity markets continued on Monday, extending
last week’s sharp losses as increased risk aversion by investors
prompted further selling.
“The move down (for prices) may have some more room to go, but we doubt
that there will be a general ‘rethink’ of funds’ commitment to
commodities,” said Edward Meir of Man Financial: “There is no
compelling strategic reason for funds to exit commodities other than to
take profits. That reason alone should not preclude them from getting
back into the markets once prices have corrected.”
However, further declines in oil prices on Monday contributed to weaker
investor sentiment across the commodity complex.
IPE Brent for July delivery fell 71 cents to $67.98 a barrel while
Nymex June West Texas Intermediate shed 68 cents to $67.65 a barrel in
electronic trade.
Traders said prices were testing support around the $68.20 level and
that a close below that could pave the way for a further decline to the
next major support at $65.80 a barrel.
Analysts at UBS said that following a lot of profit taking over the
past two weeks, investors appear to be waiting for metals prices to
stabilise before re-opening fresh long positions.
Gold futures on the Tokyo Commodity Exchange dropped by their 60-yen
daily limit prompting a further decline in spot bullion prices in
trading on the London Metal Exchange on Monday. Gold traded at $645.10
a troy ounce while silver was at $12.06 a troy ounce.
Traders said speculators and hedge funds were liquidating some of the
large long positions they had built up in gold earlier in the year.
The latest data from the Commodity Futures Trading Commission showed
that net non-commercial (ie speculative) long positions for gold in New
York fell by by 6 per cent last week."
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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