#Gold jumping this AM in NY. Last $1253.70/oz. $GLD

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MasterMetals

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#Gold seems to be (barely) holding its LT support levels.

#Gold is doing all it can to hold its LT support levels. 

Will #Gold break its LT support? or finally breakout of triangle formation from 2011 high? https://t.co/wKRejhnSVo pic.twitter.com/9Pvz7aokmn

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CME Group to allow physical settlement of weekly #gold options - MINING FINANCE / INVESTMENT - Mineweb.com

CME Group to allow physical settlement of weekly gold options


Chicago-based CME says it will amend the contract of its weekly gold options to let investors exercise into futures contracts effective July 1, pending approval from the U.S. CFTC.

Author: By Frank Tang
Posted: Tuesday , 19 Jun 2012


NEW YORK (REUTERS) -


CME Group is allowing investors in its short-term gold option contracts to take delivery of physical bullion in a bid to increase the product's appeal against over-the-counter gold options.


The biggest operator of U.S. futures exchanges said it will amend the contract of its weekly gold options to let investors exercise into futures contracts effective July 1, pending approval from the U.S. Commodity Futures Trading Commission, CME said in a notice late last week.


Prior to the change, the options, which were launched in July last year on CME's COMEX metals platform, were settled by cash only and physical delivery was not permitted.


Chicago-based CME is trying to make the options more attractive as some investors favor owning physical precious metals as a safe haven in market turbulence.


In a similar move to woo investors who favor physical metals in October last year, CME more than doubled the amount of physical gold it can accept from its clearing members as collateral.


Dealers said that the CME was trying to gain market share from the over-the-counter market, which offers investors gold options with a wide array of expiration dates.


Each of the short-term options has a five-business-day expiration period, and the exchange rolls out a new option contract with a new date of expiry on a daily, continuous basis.


COMEX floor traders said investors, however, have greeted the product with little interest, as the contract was rarely traded.


Anthony Neglia, president of Tower Trading and a COMEX gold options floor trader, said that market makers are reluctant to provide liquidity for the high-risk, short-term product, which has failed to garner interest from both institutional and retail investors.


"Statistically, 95 pct of the options go out worthless, so who's going to take the first step" to trade them, Neglia said. He added there was some interest for the product among trading houses.


In a sharp contrast to the weekly options, open interest of CME's popular monthly COMEX gold options currently totals at well over 1 million contracts as more investors are using options to bet on the upside in gold due to economic uncertainty.


© Thomson Reuters 2012 All rights reserved

CME Group to allow physical settlement of weekly gold options - MINING FINANCE / INVESTMENT - Mineweb.com

Investors losing faith in #commodity hedge #funds: Reuters

Investors losing faith in #commodity hedge #funds: Reuters

MINUTES ON THE CLOCK...!!??? Investors losing faith in commodity hedge funds Investors in some of the best-known commodity hedge funds are getting increasingly frustrated by their performance, with some heading for the exit as managers rack up a second year of losses. Some major funds focused on energy, metals and agricultural products have fallen this year after traders - still cautious about big bets following last year's losses - sought to protect themselves against rising volatility just as it fell. Clive Capital, the $3.4 billion London-based fund run by Chris Levett, and Armajaro, one of the largest players in the coffee and cocoa markets, are among those in the red. Meanwhile, Fortress Investment Group's commodities fund, run by William Callanan, this week became the year's third big-name commodity fund to close after it racked up double-digit losses and lost half its assets. "The multi-billion funds have really been nothing but disappointing over the last couple of years," said one investor, asking not to be named. "For people that only came in when the noise about commodities started a couple of years ago, they (the funds) have basically done nothing." Commodity managers who forged reputations for eye-catching returns as they rode the long commodity bull run that started some 10 years ago are now struggling with shorter, more uncertain trends. Aside from Fortress, two of the sector's biggest names also decided to liquidate their funds earlier this year, underlining how tough commodity markets have become for even veteran traders. Legendary natural gas trader John Arnold is closing down his flagship Centaurus fund after two years of struggling to maintain outsized returns, while oil fund BlueGold - famed for its 200 percent gain in 2008 - is shutting after racking up 35 percent losses last year. STRUGGLING WITH VOLATILITY For a sector renowned for managers' ability to navigate volatility, many struggled to get to grips with falls this year. Some funds came into the year predicting rising volatility in oil prices on the back of escalating tensions around Iran and its nuclear ambitions. Brent crude oil gained about 15 percent early in 2012 but has given up most of its rise. "The fall in commodity volatility has cost managers over the year. A lot of people bought call options on oil but implied volatility has fallen substantially over the past few months," Jaspal Phull, a portfolio manager at Stenham Asset Management and responsible for investing in commodity funds, said. "There is definitely a sense that ... managers need to produce returns this year after what was a disappointing 2011." Metal prices have also hurt funds. Key industrial metal copper, for example, has remained range-bound after gaining around 15 percent early in the year. "I think people have been trading a lot of options, not only in metals, expecting volatility to increase, but it just hasn't, it's been very flat ... People have lost a lot of money trying to trade volatility, it's not pretty," said a market source, asking not to be named. Big-name losers include Callanan at Fortress. His fund, which is now returning money to investors, lost 12.6 percent this year to the end of April after falling 8 percent last year. The $860 million Krom River Commodity Fund has given up 3.6 percent after a 4 percent drop in 2011, while Clive Capital, a big player in oil markets, is down 4.4 percent, compounding last year's 9.9 percent slide, figures seen by Reuters show. Meanwhile, commodities giant Armajaro, co-founded by cocoa trader Anthony Ward, saw its flagship fund fall 1.6 percent in the first quarter and its computer-driven fund shed 10 percent, according to figures seen by Reuters. The average commodity fund has fared only slightly better. Funds focused on energy or basic materials are up 2.15 percent to early May, but this is less than half the 4.42 percent rise of the average fund, according to Hedge Fund Research. Not all funds are in their second year of losses, however. Mike Coleman's Merchant Commodity Fund has rebounded after a slide in 2011. The portfolio has gained 11 percent up to the end of April after falling 30.1 percent last year. HEADING FOR THE EXIT Poor performance is encouraging some investors to sell. Many who poured into commodity funds after the financial crisis, wanting to diversify away from stock and bond markets ravaged by volatility, will have missed out on the boom years - epitomised by BlueGold's 200 percent gain in 2008. Assets in Callanan's fund slid 46 percent to $473 million during the first quarter, a company filing showed. The fund, which ceases trading around May 23, ran $1.2 billion last June. One investor in Clive and Armajaro, asking not to be named, said it was considering cutting its holdings as it now preferred to invest in smaller, nimbler managers. Clive and Armajaro declined to comment. "Everyone's had quite a lot of investors pulling money out and that causes a lot of rebalancing issues. They're pulling out for a number of reasons, not just outright performance, maybe a different strategy is being employed," the market source said. The worry now is that commodity markets are set to suffer renewed volatility, driven by geopolitical concerns in energy markets and weaker growth in China, the world's biggest consumer of raw materials, making it even tougher for managers to trade. Gabriel Garcin, portfolio manager at Paris-based Europanel Research & Alternative Asset Management, has shied away from investing in pure commodity hedge funds partly due to the relatively small markets in which they invest. "The Chinese slowdown is also adding to the asymmetry of returns in commodities. You have these two parameters that could create a lot of volatility and a very tough environment for traders," he said.     --- Tommy Wilkes and Eric Onstad, Reuters

Trafigura Following Raffles Into Heart of Asian Trade - Bloomberg

Gold`s journey toward $1,600

Gold's journey toward $1,600

The yellow metal briefly touched a record high above $1,600 dollars on Monday as deft fears continued to grow, but there have been other steps in gold's rise toward a new record

Posted: Monday , 18 Jul 2011

(REUTERS) -

Gold prices hit record highs above $1,598 an ounce on  Monday, buoyed by investors seeking a safer place to store their value as the U.S. deficit talks stalled and euro zone debt crisis continued to unfold.

Following are key dates in gold's trading history since the early 1970s:

* August 1971 - U.S. President Richard Nixon takes the dollar off the gold standard, which had been in place with minor modifications since the Bretton Woods Agreement of 1944 fixed the conversion rate for one Troy ounce of gold at $35.

* August 1972 - The United States devalues the dollar to $38 per ounce of gold.

* March 1973 - Most major countries adopt floating exchange rate system.

* May 1973 - U.S. devalues dollar to $42.22 per ounce.

* January 1980 - Gold hits record high at $850 per ounce. High inflation because of strong oil prices, Soviet intervention in Afghanistan and the impact of the Iranian revolution prompt investors to move into the metal.

* August 1999 - Gold falls to a low at $251.70 on worries about central banks reducing reserves of gold bullion and mining companies selling gold in forward markets to protect against falling prices.

* October 1999 - Gold reaches a two-year high at $338 after agreement to limit gold sales by 15 European central banks. Market sentiment toward gold begins to turn more positive.

* February 2003 - Gold reaches a 4-1/2 year high on safe-haven buying in the run-up to the invasion of Iraq.

* December 2003-January 2004 - Gold breaks above $400, reaching levels last traded in 1988. Investors increasingly buy gold as risk insurance for portfolios.

* November 2005 - Spot gold breaches $500 for the first time since December 1987, when spot hit $502.97.

* April 11, 2006 - Gold prices surpass $600, the highest point since December 1980, with funds and investors pouring money into commodities on a weak dollar, firm oil prices and geopolitical worries.

* May 12, 2006 - Gold prices peak at $730 an ounce with funds and investors pouring money into commodities on a weak dollar, firm oil prices and political tensions over Iran's nuclear ambitions.

* June 14, 2006 - Gold falls 26 percent to $543 from its 26-year peak after investors and speculators sell out of commodity positions.

* November 7, 2007 - Spot gold hits a 28-year high of $845.40 an ounce.

* January 2, 2008 - Spot gold breaks above $850.

* March 13, 2008 - Benchmark gold contract trades over $1,000 for the first time in U.S. futures market.

* March 17, 2008 - Spot gold hits an all-time high of $1,030.80 an ounce. U.S. gold futures touch record peak of $1,033.90.

* September 17, 2008 - Spot gold rises by nearly $90 an ounce, a record one-day gain, as investors seek safety amid turmoil on the equity markets.

* Jan-March 2009 - Gold-backed exchange-traded funds report record inflows in the first quarter as financial sector insecurity spurs safe-haven buying. Holdings of the largest, the SPDR Gold Trust, rise 45 percent to 1,127.44 tonnes.

* February 20, 2009 - Gold rises back above $1,000 an ounce to a peak of $1,005.40 as investors buy bullion as a safe store of value as major economies face recession and equity markets tumble.

* April 24, 2009 - China announces it has raised its gold reserves by three-quarters since 2003 and now holds 1,054 tonnes of the precious metal, boosting expectations it may add further to its reserves.

* August 7, 2009 - European central banks opt to renew their earlier agreement to limit gold sales over a five-year period, setting the sales cap at 400 tonnes a year.

* September 8, 2009 - Gold breaks back through $1,000 an ounce for the first time since February 2009 on dollar weakness and concerns over the sustainability of the economic recovery.

* December 1, 2009 - Gold climbs above $1,200 an ounce for the first time as the dollar drops.

* December 3, 2009 - Gold hits record high at $1,226.10 an ounce, with dollar weakness and expectations for central banks to diversify reserves into gold driving prices higher.

* May 11, 2010 - Gold reaches fresh record high above $1,230 an ounce as fears over the contagion of debt issues in the euro zone fuel safe-haven buying.

* June 21, 2010 - Gold jumps to a new high at $1,264.90 an ounce as underlying fears over financial market stability and sovereign risk combine with dollar weakness to push the metal through resistance at its previous high.

* Sept 14, 2010 - Gold climbs back to record highs, this time at $1,274.75, as global markets reflect renewed uncertainty on the economic outlook.

* Sept 16-22, 2010 - Gold hits record highs for five successive sessions, peaking at $1,296.10, as investors flock to bullion after the Fed signals it may consider further quantitative easing, weakening the dollar and raising fears over future inflation.

* Sept 27 - Spot gold prices touch the $1,300 an ounce mark for the first time.

* Oct 7 - Gold rallies to a record high above $1,360 an ounce as the dollar comes under pressure from building expectations for the U.S. Federal Reserve to take extra measures to keep interest rates low and prop up the economy.

* Oct 13 - Gold jumped to record highs near $1,375 an ounce as the dollar continued to languish, with the U.S. unit coming under pressure after minutes from the Fed's September meeting signaled the U.S. economy may need further stimulus.

* Nov 8 - Gold prices break through the $1,400 an ounce mark for the first time as haven buying prompted by renewed budget problems in Ireland more than offset a sharp dollar bounce.

* Dec 7 - Gold reaches a fresh record high above $1,425 an ounce, driven by fund buying ahead of year-end, jitters over the euro zone debt crisis and speculation for further U.S. monetary easing.

* January 2011 - Gold prices fall more than 6 percent in their worst monthly performance in over a year as a revival in risk appetite diverts investment to higher-yielding assets.

* March 1 - Gold recovers to hit a record high at $1,434.65 an ounce as unrest in Tunisia and Egypt spreads across the Middle East and North Africa, boosting oil prices.

* March 7 - Gold extends record highs to $1,444.40 an ounce as oil prices hit their highest in 2-1/2 years after protests are quashed in Saudi Arabia and as violence in Libya rages.

* March 24 - The resignation of Portuguese prime minister Jose Socrates pushes the euro zone debt crisis back to center stage, lifting gold prices to a record above $1,447 an ounce.

* April 7 - Gold prices extended their record highs toward $1,465 an ounce after the European Central Bank cast doubts over expectations for interest rate rises, while unrest in the Middle East encouraged safe-haven buying.

* July 18 - Gold hit a record of $1,598.41 an ounce, on track for an eleventh straight day of gains, on persistent worries about euro zone debt crisis spreading and a growing threat of a U.S. government default.

(Compiled by Atul Prakash, Jan Harvey, Amanda Cooper and Rujun Shen; Editing by Himani Sarkar)

"Gold's journey toward $1,600
The yellow metal briefly touched a record high above $1,600 dollars on Monday as deft fears continued to grow, but there have been other steps in gold's rise toward a new record"

Mineweb.com - The world's premier mining and mining investment website Gold`s journey toward $1,600 - FAST NEWS | Mineweb:

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'Widowmaker' Oil Trade Lives Up to Its Name - CNBC

Widowmaker' Oil Trade Lives Up to Its Name

OIL COMMODITIES MARKETS ECONOMY INTEREST RATES INFLATION FUEL PRICES GASOLINE FUTURES NYSE FTSE

CNBC.com

| 12 May 2011 | 03:10 AM ET

Big oil traders who bet on a rise in gasoline prices relative to heating oil ahead of the summer driving season may have thought they broke the curse of a "widowmaker" trade even as oil prices crashed.

They were dead wrong. Some of the traders who shun the big, directional bets that hedge funds love have crowded into a common springtime trade: betting gasoline futures on the New York Mercantile Exchange (NYMEX) will hold at a premium to heating oil futures as consumption accelerates into the summer.

They have been counting their winnings since March, when the spread staged its biggest seasonal rise since 2007.

The surge accelerated earlier this week as the Mississippi River swelled, threatening refinery operations in Louisiana and Tennesse.

But then came Wednesday, when gasoline futures collapsed in the biggest absolute drop in more than two years.

The spread dropped by over 17 cents, the biggest one-day move since September 2009.

"There will be widows. Some people got pretty whipsawed. But that trade is not for the faint of heart," said Stephen Schork, editor of the Schork Report.

Indeed, lately it's been a stomach-churning ride. The spread has moved by more than 6 cents in either direction in four of the past eight trading sessions; prior to last week it moved by such a margin only nine times in two years.

First, the U.S. Energy Information Administration came out with data showing an unexpected build in gasoline stocks as the threat level for refineries from the Mississippi river abated.

This, coupled with mounting concerns that gasoline pump prices near the critical $4 a gallon level will cause U.S. consumers to balk, pushed many bulls to the exit.

RBOB gasoline at one point slumped by over 30 cents or 8.95 percent.

The price drop was so big it triggered a five-minute trading halt in all three oil major contracts for the first time since Sept. 22, 2008.

Victims

The "widowmaker" trade tends to be popular among trading houses and hedge funds which house some of the biggest speculative traders in the market.

One victim is said to have lost $500 million on a single bet in the summer of 2008 when gasoline failed to reach a premium to heating oil, contrary to the usual pattern.

On Wednesday, traders said a big Europe-based oil trading company was forced to stop out, or reverse its long position on gasoline to prevent further losses.

Volumes spiked to the highest level in hitory as dealers rushed to place orders.

"If you were long you were happy this time yesterday and you're probably not so happy now," said an oil trader with a European bank. "The flood story freaked everyone out. The market attracted tourists and then we overshot."

U.S. refineries, which ramped up their gasoline production by 111,000 barrels-per-day last week, according to the EIA, are also set to take a hit if the slump in the futures market is carried to spot markets over the coming few days.

The price crash in theory wiped off more than $5 in profits for every barrel of crude processed into gasoline.

Traders who sensed that the price may have been reaching a peak were relieved on Wednesday to have sold near the top.

The signs were already there. Gasoline demand has been on a continuous slump since the second week of April according to EIA's 4-week average gasoline supply data.

"Luckily, I sold this morning. I'm too scared to watch it," said a gasoline trader with a bank.

Before Wednesday's crash, gasoline was trading at a record premium to heating oil, according to Reuters data going back to 2008.

Others saw the plunge as symptomatic of a new oil trading environment, characterized by huge price swings following last week's record drop in oil prices, for no obvious reason.

In percentage terms gasoline price fell by less than crude in last week's price crash, but on Wednesday they led the whole complex lower, analysts said.

"Last week's steep slide has increased volatility in the market, and we are still responding skittishly to that.

Often in the period after a crash like that things become a little more volatile," said Gene McGillian, analyst at Tradition Energy.

Flagship commodity fund Astenbeck II run by top Phibro trader Andrew Hall was one name that suffered a double-digit loss last week as oil prices tumbled.

© 2011 CNBC.com

commodities - 'Widowmaker' Oil Trade Lives Up to Its Name - CNBC

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-- The MasterFeeds

Clive Capital On Commodity Slam... er...Outlook

Clive Capital On the Commodity Slam...sorry,we mean, Outlook

www.businessinsider.com

Until we learn which hedge funds REALLY got clobbered, Chris Levett's $5 billion Clive Capital, which lost $400 million, will be known as the hedge fund that just got clobbered by the commodities dump.

Clive was "at a loss to explain what had caused crude oil markets to be “annihilated," Clive's management said, according to the FT.

Click here to see what might have caused it >

We assume Levitt's will bounce back. But for some smaller funds, what happened last week was game over.

Until then, check out what Clive Capital was saying about commodities in October.

Below is a summary from their October letter to investors. We published Clive's macro view in November.

From Clive Capital's October letter to investors:

Energy

-- Bullish on gas, power, and emissions

• Estimates for U.S. onshore oil production growth are continually revised up
• In Asia, Chinese oil demand continues to beat expectations
• With floating inventories of crude and products continuing to whittle away, oil fundamentals appear to be tightening. Onshore commercial inventories would be the next to draw, which should be supportive to oil spreads in general.
• Ethanol shortages in 2011 look increasingly possible, which would be supportive for gasoline, particularly in Brazil and the U.S.
• Gas is expected to remain in a competitive position versus Coal all winter long and throughout 2011.
• Germany will reach 2008 level power consumption by the end of 2011 if current growth trend is sustained.

Precious Metals

-- Bullish on Precious Metals Growing fears over the value of the major paper currencies as well as the persistence of ultra low real rates across the world should be bullish for Precious Metals as a group going forward. We made no major changes to our Gold positioning and should continue to benefit from a move higher in prices... PGM’s also rallied in October; with Palladium outperforming Platinum and seeing Palladium prices reach 9-year highs. The longer-term bullish supply story is not only a function of constrained supply but also of increased cost pressures (particularly in the face of a strong South African Rand and power tariff increases), which are reducing producer profit margins despite these higher prices. On the demand side, tighter emissions legislation around the world has been a positive driver for many years. The implementation of regulations for off-road vehicles (e.g. those used in agriculture, construction) in Europe and North America in 2011 as well as demand from stationary fuel cells should add two further demand components to markets that are already struggling/unable to supply enough metal for all the other uses.

Base Metals

-- Bullish on Copper and Tin Market balances for 2011 are pointing towards market deficits in Copper, Tin and Lead while Nickel and Zinc should see small surpluses... Copper mine supply is expected to expand by less than 500kt in 2011 (compared to annual refined production of around 19mt)... To put this into perspective, global demand is expected to expand by around 700kt (with the bulk of that growth coming from China and using very conservative assumptions for the G3). As such, there is a strong likelihood that the market will record an even bigger deficit in 2011 than the estimated 300-400kt deficit in 2010. Add in the growing likelihood of physically backed Base Metal ETFs and one could easily envisage a scenario where several metals, particularly Copper and Tin, trade well into record territory in 2011 while others, such as lead, Zinc and Nickel (which are still well below their respective 2007/08 peaks) will see prices rising closer to those prior highs.

Read more: http://www.businessinsider.com/check-out-what-clive-capital-was-saying-about-commodities-before-the-annilhilation-2011-5#ixzz1LrXHGfGX

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Clive Capital On Commodity Outlook


Also read:

Clive Capital Investor Letter on the Commodity Slam 

The Biggest Commodities Hedge Fund In The World On QE And Why It's Still Bullish On China

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-- The MasterFeeds