The commodity pits have been on a tear since bottoming in mid-December. The Continuous Commodity Index (CCI) has staged a near 8% rally in the past month; this, in spite of a collapse in the price of Natural Gas which has shed more than 40% since November.
Monday saw a massive rally in the Natural Gas price which smells of short-covering. There was news of a cut in production from a couple of suppliers, but the trend in price is still intact. Futures for Nat.Gas. rebounded $0.24 or 10% on very heavy volume erasing most of last week’s losses.
In the metals pits both Gold and Silver were strong again on Monday. Gold finally took out its 50 day moving average to close up $9.80 per ounce at $1675.40. With the situation surrounding Greek default refusing to resolve, as the Greeks hold all the cards and their creditors refuse to admit this, the possibility of massive bailouts of European (and by proxy U.S. banks… shhh, don’t tell anyone) is still in place. Demand out of Asia is still strong as well.
Silver continued to rally, further having bested its 50 day moving average on Friday’s big rally. Monday saw the white metal put on another $0.27 to close at $32.30 per ounce. Both metals have repaired serious technical damage and most momentum indicators have recovered to neutral or mildly bullish positions after a very choppy end to 2011.
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