Risk Off Day Has Commodities Pause

The blistering rallies in a few of my favorite things, namely gold, silver, oil and, most especially, beef, paused for a breather on Monday to start the week.   The brain-dead financial press will mutter something about ‘profit-taking’ or ‘the rally in the USDX’ or some other unknowable reason, but like all things in this life, they sometimes need a breather from the fun.

Gold was bashed early in Europe bouncing with a vengeance off of support at the $1764 level and rallied to hit a high of $1780 before being beaten back during the Globex session to close at $1767 per ounce.

Silver also rallied hard and made yet another attempt to break through the wall of central bank and JPMorgan naked paper at $35.70 and failed to break through.  It closed the Globex session at $35.57 per ounce.  If that $35.70 level falls a run to $40 per ounce would happen quickly.

Both West Texas Intermediate and Brent Crude pulled back from their Friday highs settling off nearly $2 per barrel each.  Brent closed at $123.38 and WTI closed at $107.90.  Asia-Pacific Tapis crude, however, closed up $0.44, extending its rally to $134.44 per barrel.  Natural Gas and RBOB Gasoline futures also closed down at $2.61/mBTU and $3.297/gallon respectively.

Of course, since it was a risk-off day, one would expect stocks to be down.  They weren’t but were essentially flat.  The Dow Jones Industrials crossed the 13,000 22 times but still could not hold it and tanked 20 points on the close to 12981.51.

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Tom Luongo

About Tom Luongo

Tom Luongo is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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