Globally, there was a significant amount of data to be released featuring GDP readings from many Euro Zone nations, retail sales from China and the United States and then EIA inventories later today. These economic data points are important when considering the demand factor in the price discovery of energy products.
It was another quiet over night session with little data out of the Far East and Europe. Better than expected German IFO data did provide a slight demand bid but it appears any real action will have to wait for today`s U.S. durable goods data.
Hedge funds’ combined holdings in gold futures rose the most this month as continued U.S. monetary stimulus spurred investors to sell short contracts and sent prices toward the first quarterly advance in a year.
Energy is a required core asset with a predictable, hedgeable, and protectable value; little reliance on the “psychology” of the global or local marketplace; an inherent indifference to interest rates or public market sentiment; possessing a natural hedge against inflation; providing favorable tax treatment; and with an uncertain supply and a continually increasing demand.
New short-term options contracts for gold, crude oil and natural gas will begin trading under Comex and Nymex rules and regulations on July 16. The new short-term options contracts will have daily expiration dates listed up to five days in advance.
Simply put, we have had too much money chasing goods and services. But there's more to the story than just too much money. Commodity prices are rising because people living in emerging economy nations are seeing unprecedented growth.
The new E-micro gold contract at one-tenth the size of the benchmark 100-ounce contract will also carry margin requirements that are roughly one-tenth those of the larger contract and have trading fees that are about one-tenth the full-size contract.