What is Copper Up To?

There is an interesting development in copper this week which I feel deserves noting. It pertains to the Commitment of Traders report and the positioning of the hedge fund category.

This category of traders has been net short for some time now. As a matter of fact, the only category of traders that has held the net long interest in the copper market has been the Swap Dealer category. Every other group, the Commercials, the Hedge Funds, the Other Large Reportables and the General Public or Small Spec trader have all been net short.

That changed this past week for the hedge funds. They are, as of Tuesday, now net long in copper. The movement has been consisting primarily of short covering but now new longs are joining in.

Here is a chart of the COT for copper.

Note how the hedge fund positioning at the beginning of this year started out as big net longs only to see them move to the short side of the market in February. They were briefly long again for a week in late February only to quickly establish a larger short position.

I can tell you that a great deal of this weakness was related to both lackluster home sales here in the US but more importantly, continued weakness in Chinese data. Last month they began covering shorts and they have now, about a month later, moved to a net long exposure once more.

So, we now have the swap dealer and hedge funds on the net long side with the commercials, other large reportables and small specs on the net short side.

Here is the price chart:

You can see that the recovery in copper prices pretty much coincides with the shift by the hedge funds in favor of the long side. Once copper climbed back above $3.00 and held there, funds began covering as the downside appear limited at those levels. That has brought the market up towards $3.12 but weak economic data had limited bullish enthusiasm for the metal. Today was different in the sense that the copper market seemed to read the stronger payroll number as a sign that the US economy was strong enough to keep the price supported above $3.00, in spite of doubts about the vigor of the Chinese economy.

Why do I bring this up? Simple - in my view silver prices are tied to copper prices more so than to gold right now. Hedge funds have been gradually moving to play silver from the short side although they remain as net longs, not by a significant amount however. Thus far, the $19 level has been holding as support for silver. It penetrated that level this week but rebounded today when gold took off on the Ukrainian tensions.

If hedge funds continue to move further towards the net long side of copper, there is a good chance that silver will follow suit. Remember silver needs an improving economy to move higher. During any sort of slow down fears, it is not going to move higher. Those who keep trash talking the US economy and in particular the US equity markets, who yet at the same time expect silver to rally, are at complete odds with themselves, even if they do not realize it.

Silver more so than gold, needs inflation to move strongly higher. It certainly needs something to make it convincingly past the $20 level. Thus far attempts at getting past there have not met with much success.

I am the first to admit that when it comes to silver, its combination of being both an industrial metal and a precious metal to some, make deciphering what it is responding to tricky at times. However, a rising copper price is not going to hurt silver, that is for sure. Let's see if copper can climb past the $3.20 level. If it can do that I would think silver can hold above $20. At this point, the jury is still out however.

If copper succumbs to any further evidence of a slowing China, then it is going to act as an anchor on the silver price.

Each piece of economic data that comes out of both the US and China in the weeks ahead will take on great significance in ascertaining whether or not these metals have a shot at starting an uptrend of any durability. More importantly than the actual data however will be the market reaction to that data.

Commitments of Traders Report

There is not really all that much happening with this report for the week. Today's fireworks will unfortunately not show up so we are left to waiting for another week to try to read what happened today.

Through Tuesday of this week, the big commercial category, the swap dealers and the hedge funds were all net sellers. The buyers were the "other large reportables" category and the small trader or general public.

All three category of speculators remain as net longs in gold, although the hedge fund category has rather sharply curtailed that exposure over the last 6 weeks. They have reduced their net long exposure by approximately 50,000 contracts since its peak of this year when they were at 138,429.

What I find rather noteworthy is that in spite of gold's retreat away from near $1400 in mid-March, and the continued sharp drawdown in reported ETF holdings out of GLD, speculators remain stubbornly bullish in regards to gold.

That is a double-edged sword. On the one hand, their refusal to liquidate more longs is preventing aggressive selling from taking place and keeping gold above chart support. They are certainly doing their best to hold the metal up.

The other side of that sword is that any downside CLOSING BREACH of an important chart support level ( $1280 - $1270 ) means we are going to see quite a wall of technically related selling occur.

A good example of this can be seen in the early morning reaction to the payrolls numbers. A big wave of selling engulfed the market immediately. Were it not for that flare up over in Ukraine, it is highly unlikely the market would have recovered from that.

So far the bulls are preventing prices from closing below that key support level. It has penetrated several times now only to encounter buying, buying tied to a geopolitical event.

Based on what I can see at this point, any lessening of tensions over in Ukraine are going to see aggressive selling. Any escalation will see further short covering as what took place today.

Any of you who are soothsayers and know how events over there are going to play out, please inform the rest of us so that we may place our positions accordingly.

In the meantime, we mere mortals must wait and see.

I am noting a bit of weakness or more accurately, hesitancy in gold to stay above the $1300 level here late in the session. It should be noted that some very big interests are looking to sell any rallies in gold as they see some of the fundamentals that have been supporting it being removed as the year progresses.

We are talking mainly a phasing out of the Fed's QE program. Today's payrolls number further fanned talk about that and potential interest rate hikes in early 2015. That seems a good ways off at this point but if traders see a trend of stronger economic data and especially any upward movement of the US Dollar, gold is going to come under more selling pressure. I would continue to watch interest rates here in the US.

The yield on the Ten Year which was up near 2.7% at one time early today, ended up falling as the safe haven bids brought it down to 2.591%. That is a pretty big swing for that particular Treasury.

Oddly enough, the VIX actually moved lower today. I am not sure what the heck to make of that. I would have expected to see it creep up somewhat. It could be that US stock traders are of the mindset that while the events over there in Ukraine are worth noting, the situation is not likely to spill over outside of that immediate area anytime soon. That might or might not be true but based on that VIX reading, I would think that traders are of that opinion until or unless the events prove otherwise.

The flip side for gold remains the same - geopolitical events are supporting the metal and will continue to do so as long as the market is concerned with chances of escalation in tensions. Look at what the downing of two helicopters can do if you doubt this!

Remember, when a situation is this fluid, stay nimble. Don't get married to any one position for too long. And I mean either long or short! If you really are risk adverse, just stay on the sidelines and watch the rest of the players chop each other up. Find another market to play in - there are plenty of them besides gold.

Ukraine stirs Safe Haven Plays

Look at the following charts:

First the Japanese Yen - I will never understand how the Yen of all currencies, could be considered a "safe haven" by any standard of measurement but apparently it is.

Here is that one minute bar chart I promised you on the gold market and its goofy ride this morning.

 

Here is the bond market:

 

 

 

Do you see the pattern on all three charts? It is the same isn't it? At nearly the same time or very close to the same time, all three markets reversed course after moving lower on the payrolls number as the market's attention shifted almost immediately to the wire reports of the Ukraine conflict and that downed helicopter.

 

Never a dull moment when we are dealing with geopolitical events. This is why making predictions about market movements, is so foolish. No one knows from day to day what we are going to get when these crises occur. Some days the tensions ease; other days the tensions flare. Just try picking the flower petals off of a daisy - "She loves me; she loves me not" and you have about as good odds as guessing what is coming next.

 

Traders out there - if you are unsure about a market - you do not need to be in it trading it. Sometimes just sitting on the sidelines watching is the best place to be until you can get a sense of things. There is no sense in risking your capital on something tied to unfolding events, which can go either way.

 

Exercise extreme caution right now in trading gold and do not get caught with too large of a position. There are times when one needs to have more concern over how much you might lose rather than how much you might make. Remember that!

The Old Reverse Flash Crash

Well, the day we have all been waiting for, again - another Friday payrolls day. The number came in much better than the market expected and the result was instantaneous - gold promptly fell some $14 breaking through $1280 again but then, within less than a minute, the losses were cut in half. Within the span of an hour, it had recaptured all of its losses and then some.


NOTE - the website is not allowing me to post the one minute chart for some reason. As soon as it does, I will get the chart inserted so that you can see the extent of the huge price swing. It is quite graphic and further underscores the havoc that these infernal computers have unleashed on our markets.

What gives? who in their right mind would swallow up the entire string of offers regardless of price or the size of their buying. Did they not know that by so doing they would obtain the worst possible buy price? Obviously this is horrible and it proves that gold is being manipulated on the buy side by a sinister force out to punish the shorts for daring to sell gold with such impunity. These reverse flash crashes must stop!

Those of you who read this site regularly know that I am prone to use hyperbole/sarcasm to prove my point. Actually there was nothing sinister, nor evil about the price action. What happened was that the computers shifted from selling to buying within seconds because while the payrolls number put a firm bid under the US Dollar, events in Ukraine escalated with that attack by its military on the town of Slovyansk, which is being held by pro-Russian militants. These same militants apparently shot down at least one helicopter.

That this area flared up on a Friday, made the bears nervous about getting too aggressive, even the face of a surprisingly decent jobs number, because no one knows what might transpire over a weekend. They did not want to get caught too short just in case.

However, this underscores my contention made this week - gold would be much lower were it not for this Ukraine mess.

The Gold Cult

Cult  -

1.) a religious group which promotes worship of a human leader and devotion of one's life to a specific purpose.
2.)  A misplaced or excessive admiration for a particular person or thing

Cult of Personality -

1.) Intense devotion to a particular person.

Writing this short treatise brings me no particular pleasure but rather sadness. Sadness that some whom I count as friends have become trapped in this prison and cannot see it.

I have chosen in the past, and do so now again, to describe a certain portion ( I want to be clear that I am not lumping all under the same heading ) of the pro-gold or honest money camp as being cultish in nature. The similarities between their comments, writings and blind adherence to an inanimate object and those trapped in a religious cult are striking.

Having had some personal experience in dealing with people trapped in religious cults, it is not hard for me to see the same symptoms in those who have been swallowed up by the cult of gold. The most obvious of such symptoms is the inability to see reality as it is. Statements of fact, logic, sound reason, empirical evidence - all are easily dismissed by those snared in the cult if such things happen to contradict the centrally held tenets. Those who speak against the cult are viewed as unenlightened or uninformed at best, and inimical to truth and therefore enemies at worst.

Generally speaking, a cult also has either a charismatic leader/(s) whose authority is beyond questioning. Those who would challenge the statements of such leader are immediately ostracized if such a challenge arises from within the cult, or ridiculed and held in contempt, if the challenger is outside of the cult.

These leaders more often than not, claim to possess an esoteric knowledge, a sort of key to the mysteries of the universe, which lesser gifted humans are not capable of receiving. They tend to reinforce this as often as possible so as to lend further credibility to themselves among their followers. This special insight into things either divine, or in the case of gold, economic in nature, is claimed so as to strike a sort of awe bordering on the realm of reverence.

Free thinking is discouraged if not outright forbidden as the members are expected to fall into line behind the prescribed belief system.

As you note these characteristics, ask yourself if this is not what we are seeing in some segments of the hard asset community?

Let's be brutally honest here - both gold and silver have been in bear markets for some time now. Silver, three years ago this month, had an epic collapse in price from just below the $50 mark to near $33 in a single week. It never recovered that level, moving up to near $44 before imploding. Gold peaked at over $1900 in August 2011 and while it managed to recover to near $1800 three months later, it has not been able to clear that level again, even after making two tries at it, the first in February 2012, and the last in September 2012.

Both metals have been trending lower since that time having managed to bounce slightly but still remaining well off their peak levels set over two years ago.

An open-minded, serious and conscientious investor/trader looking to maximize his or her return on monies, would have taken notice of this some time ago and acted accordingly. Common sense/prudence dictates that investors put money to work in those areas where they can capture the maximum amount of returns, risk factors considered.

In spite of this, for more than two years, we have been regaled with one outlandish claim after another for both gold and silver. In gold, we have had theory after theory, breathlessly advanced as to why the price of the metal is going to soar "any day now". Among these were backwardation claims, negative GOFO, JP Morgan cornering gold on the long side, Comex defaults, China buying that raided the gold ETF, etc, etc.,etc. In EVERY SINGLE CASE, those who proposed these theories and those who subscribed to them, were left holding the bag looking like dupes at best and like charlatans/hucksters at worst.

Yet for some bizarre reason, many of those people who follow the "advice", prognostications and predictions of these "experts" continue to dote on their every word, every interview and every speech in spite of the fact that many are losing their life's savings by so doing. How else to understand this phenomenon except to deal with it as a cult.

One would think that the severity of the financial losses that they have endured would have awakened them to the reality of what is taking place. In some cases, fortunately, it has. But tragically, in far too many instances, those who are trapped in the gold cult just dig in further, awaiting the inevitable rocketshot to the moon during which they all hope to become rich.

It reminds me of many evangelical prophecy hucksters each claiming to have a special revelation that Jesus was coming any day now. Some, like the famous book " "88 Reasons that Jesus is coming in '88" ( that was 1988) could not have been more wrong. Yet that did nothing to dissuade them from coming out with the next prediction. All they had to do was admit that they have miscalculated somewhat but this next prediction would be spot on.

I personally know of two families, who sold their homes, cancelled their life insurance policies, etc,. while they waited for the heavenly rapture to take place. Needless to say, their lives were wrecked as a result. That however did nothing to impact those "prophets" who issued their predictions - life went on as usual for them, if not better as they reaped the profits from their books which they of course promoted to these poor, but sincere victims. Some of them are still out there plying their deception even now.

I find it remarkable that men, whom God has given a sound mind to and the ability to think, reflect, ponder, analyze, interpret, etc. can be so gullible and continue to allow themselves to be taken advantage of and serve as willing dupes to those who do not have their best interests at heart. The willingness of human beings to allow self-inflicted pain to continue coming their way is an astonishing thing to behold.

Let me just close this by saying, if you are an advocate of honest money, good for you. I like to think that I am. But do not allow your convictions on these matters to cloud your judgment as an investor/trader. Recognize that until the vast majority of investors see things in the same manner as you do, yours is going to be a lonely, lonely habitation. Cast aside subjectivity and let your own senses and sound judgment be a guide to you. Be objective, especially in regards to market action but even more specifically, in regards to a shiny yellow piece of metal.

Gold is an element. Yes, it is rare but it is an element. It is not a god, nor are those who preach it divine or privy to any sort of esoteric knowledge. Judge their predictions and if found to be false, reject them. Gold is an asset class; nothing more, nothing less. Remember that.

Here is hoping that some who read this come to their senses and escape the snares of so many charlatans and wrong-headed prophets. Think for yourself!

Gold Flirting with Dangerous Chart Support

Gold has once again fallen into a support region on the charts which continues to gain in importance as it is being tested yet again. The more it is tested, the greater the chance of it breaking for each test begins with the top side of the range moving lower, first from near $1400, then from just above $1320 and most recently from slightly above the $1300 level. Resistance is moving lower and lower but thus far the $1280 level has held.

Bulls have their backs up against the proverbial wall therefore as we head into tomorrow's big payrolls number report. Any strong number is going to break their backs. If the number comes in weak, they will have dodged a bullet yet once more.

Were it not for this report due out tomorrow, I do not believe $1280 would have held today. Bears are reluctant to press it further due to the volatile nature of these recent jobs reports. They do not want to take the chance of getting blindsided by another miserable number. Bulls however are in serious trouble if the number is strong as that will remove yet another leg of support under their already wobbly stool.

Out of all the economic data releases that regularly hit the market, these payroll reports are the most important and most illuminating. Ultimately the health of the economy depends more on the number of people working that anything else in my view. Given the Fed's rather optimistic reading of the economy in the FOMC statement yesterday ( remember, they blamed the weather for the poor showing ), anything that confirms an improvement on the labor front will be viewed as confirmation that the QE program is on track to be phased out entirely before this year is out.

In looking at the chart, note that gold has not yet had a CLOSE below $1280 since February. It has closed right at that level or just barely above it, but has always managed to bounce higher. A good part of this has been due to geopolitical concerns involving the Ukranian situation. While that factor remains in play, it seems to be fading from traders' minds as the turmoil looks to remain localized in that region ( for now ). That makes tomorrow's report all the more critical to gold's fortunes moving ahead.

Let's see what we will get.

Grains are weaker again today as those weather forecasts look much more conducive to planting prospects this weekend and into next week. Also, soybean export sales were terrible as the high prices appear to be doing their work at rationing demand. Funds are big longs in both the corn and beans so this will bear watching. Thus far they have been buying dips and keeping prices supported but if their computers shift into sell mode, watch out. Again, this has not yet happened however as the pattern of late has been for them to come charging back in just ahead of the closing bell. We'll see if that is the case today or not.

New crop December corn seems to have run into a temporary wall just shy of the $5.20 level. New crop November beans have done the same near $12.50.

Currencies are rather subdued today  - again, I suspect this is due to the upcoming payrolls report tomorrow. No one wants to get too aggressive ahead of it.

Some good news, at least for consumers and some businesses, gasoline prices have fallen back below the $3.00 level wholesale. They have lost almost $0.20 over the last week. We should see a bit of relief showing up the pump shortly as a result.

FOMC Day

One word can sum up the press release by the FOMC today: " BORING".

It pretty much said the same thing as last month's statement with the exception that the Fed cut another $10 billion off the bond buying. That however seemed to be generally expected. In effect, the Fed has just repeated that it is on track to end the QE program this year but will continue to monitor the data like the rest of us. They seemed to put the blame on the slow growth in Q1 squarely on the back of the severely cold weather. We shall see what subsequent data yields. Along that line, this Friday's payrolls number will therefore be much more significant than today's statement.

One thing is sure - the DOW seemed to like what the Fed said today. Another new high! The S&P however is much more restrained however.

Early in the session Gold once again fell down towards the key $1280 level but as has been its pattern of late, it attracted enough buying to kick it off of the worst levels of the session. Traders remain conflicted between a rotten GDP number and a fairly strong ADP jobs number. As time came for the release of the FOMC statement, the price began moving higher and actually made it into positive territory. It would seem that some shorts got a bit nervous and thought that the Fed might back away from the tapering somewhat. They decided to cover and that took the price higher. Their concerns were unfounded however as once the statement hit the wires, the price moved lower again.

The situation in Ukraine is keeping some buying rolling into the market. I am of the firm belief that were it not for that geopolitical situation, gold would be trading closer to $1260 if not lower at this point.

Aiding gold somewhat is the fact that the US Dollar is weak. It is flirting with support near 79.30 ( USDX ). Below that is more important chart support near the 79 level. This morning's GDP number seemed to send Dollar bulls scurrying for the moment with the thinking being that the Fed will certainly be hesitant to announce any interest rate hikes. Higher interest rates will support the Dollar.

One of the problems that gold has at the moment is the continued moved lower in the Chinese Yuan or Renminbi. A weaker currency there, means gold becomes more expensive to buy. While it remains unclear to what extent this could impact the amount of gold purchased by China, it certainly does not help demand and right now, gold needs all the demand news it can fetch.

Why do I say that? Because that barometer of Western Investor gold demand, the big gold ETF, GLD, has reported holdings showing that the amount of gold held there has now fallen below the closing level of last year. In other words, the trend of Western investors moving away from gold has resumed after a brief interruption.

Here is the chart:

Note how holdings are barely above a 5 year low. Western money managers and large institutions are not interested in holding an asset that pays no dividend or throws off any sort of yield in the current environment. This is the reason that gold needs the sort of support from geopolitical events, such as what is occurring in Ukraine, to keep it propped up.


Along that line, it was reported today that home prices in China are not rising at the same pace as they have been previously. Average prices rose 9.1% in April but that was down from a 10.% rise in March and a 10.8% increase in February. First quarter home sales were down 7.7%.

Traders are watching any sort of news out of China that might suggest a weakening or perhaps more properly, a slowing of the rate of growth as that will have a big impact on many commodity prices.

From what I can see at this point, any rallies in gold are likely to be viewed as opportunities to sell. With the Fed effectively tightening down on the liquidity spigot, gold is losing one of its key supportive factors. The Fed is not tightening in a direct sense but they are certainly slowing down the flow of money creation. I would think that at some point this is going to benefit the Dollar. Today it certainly did not. Interest rates actually moved a tad lower with the yield on the Ten Year down to 2.653 as I type these comments. I am not sure what to make of that to be honest.

One thing that I am continuing to monitor with increasing interest is the move higher in the Euro. The last thing the Europeans want right now is a stronger Euro. Their monetary authorities are concerned about the lack of inflation and that is precisely what a strong currency is going to bring, not to mention crimping their export markets. The ECB has been making noises about bringing in its own version of QE if deflation pops its head up. That will be worth watching, especially if the Euro manages to clear 1.39 and treks higher.

Silver continues to attract selling at the $20 level and buying near the $19 level meaning its boring, range bound trading pattern continues. Copper continues its retreat from near the $3.10 level. Much of the recent gains can be attributed to hedge fund short covering in the red metal. It will be interesting to see if it maintain its footing above the $3.00 level. From what I can see of its price chart, the metal is not showing any significant pick up in global economic growth at this time. Just more of the same - slow, mediocre growth but nothing especially torrid. I would need to see copper prices at the very least above $3.20 to see a shift in trader sentiment in this regard.

Hogs are continuing their yo-yo like trading - rallying to limit up one day, then dropping sharply the next, then back up, then back down. Discombobulated is the best word that I can think of to describe trading in this pit right now. That being said, any hog producers out there would do well to begin instituting some hedge coverage on expected 4th quarter hog marketings. Profits are enormous for that time frame - do not let them slip completely out of your fingers.

If you want to hold out some portion of your production betting on even higher prices, so be it; just do not bet the farm. Be prudent and secure some of the best 4th quarter profits that I have ever seen in the hogs on a portion of your marketings.

Don't let the usual bullish hype around the disease lull you into a state of complacency. Some are suggesting that producers are not going to be expanding due to virus issues. That sort of thing has been proven wrong already by the last USDA quarterly hogs and pigs report. Don't expect for one moment that those advocating this will be correct - they are not. Listening to them will cost you - big time. Secure some coverage and sleep well before gambling with your earnings/livelihood. There are some decent combination futures/option strategies that you can employ. Check with your broker to get some help along that line.

The corn and bean markets took a bit of a break today from moving higher as the forecasts called for some warmer weather which will allow farmers to get into the fields and make some planting progress. One never knows about weather forecasts but bulls pulled some winnings off the table, just in case. The bullish chart pattern however remains intact. Traders are going to want to see evidence of strong planting progress before becoming too bearish.

Incidentally, news today from the CME Group that it is considering limits for its gold and silver futures contracts. That has elicited the expected response from the GIAMATT crowd crowing, "we told you so", when it comes to the wild price swings in gold. Sadly for them it proves nothing at all about "nefarious evil doers" manipulating the price of gold for the government. What it does prove, if anything, is that computerized algorithms continue to wreak havoc in our financial markets and the wild volatility, so often unpredictable in nature, is scaring business and would-be customers away from the exchanges. They are grappling with how to deal with all of this. Limits might help but I doubt it. Position size reductions would be more instrumental in my view but that will probably never happen. Watching hogs go from limit down to limit up in the same day is a perfect example of what the computers have done to the price discovery process. If that is not enough for you, try trading old crop soybeans if you are bored and you will get a first hand lesson into the nature of modern computer algorithms.

Not much has changed on the gold chart which I am presenting here:

As you can see, it remains mired in its trading range. The range is constricting further however as first the top side moved down to near $1320 and now has moved down to just above $1300. The bottom is intact near $1280. Two things worth noting however - the stochastics indicator ( used for range trading ) just gave a new sell signal while the ADX line is beginning a very slow rise. Normally that indicates the presence of a trending move. With the -DMI ( Red Line ) above the +DMI ( Blue Line) that translates to a trending move lower. The chart pattern however does not as of yet show a clearly defined trend. That will require a strong close BELOW $1280 to achieve.  Stay tuned - this Friday might be a game changer.

The mining shares are a tad weaker based off the HUI today.

One last thing - the VIX or volatility index, dropped lower and is sitting near 13.38. There is not the least bit of fear/uncertainty or whatever in these markets, which is rather remarkable given the high degree of margin debt.

Speak Loudly and Carry a Wet Noodle

That pretty much sums up the market's reaction to the announcement of a new set of "sanctions" unveiled by the current administration against Russian President Vladimir Putin and Russia over events in Ukraine.

Sellers in gold wasted no time in declaring their view of the "strong message" ( note sarcasm here ) being sent to Russia proceeding to knock it back down below the $1300 level.

Further aiding the move lower was the heavy selling in Newmont and more weakness in Barrick over the announcement that any merger between the two was off the table for now.

The Yen also moved lower signaling the absence of any safe haven play as bonds also moved lower. Equities are moving in and out of positive territory as I type these comments. Safe havens are on hold, at least for today. There remains a great deal of volatility with short term technical factors dominating trading today.

I mentioned last Friday that I do not believe gold has much upside here because at this time I do not see events in Ukraine spreading outside of that region. If the market felt like those events could be a harbinger of more to come, gold would be much stronger. That it is not, is evidence enough that while the situation remains tense, most do not see it spreading beyond that region. Rallies in gold are therefore attracting selling even as dips lower are attracting buying from some due to the ongoing geopolitical developments. As stated so many, many times here now, buying gold due to geopolitical events is extremely risky. You have no idea what might or might not happen and thus it is entirely a crapshoot. That is not trading; it is not investing either for that matter; it is gambling. If you want to gamble, head to Las Vegas or Reno - at least they have some great looking showgirls while you are losing your money.

Corn continues to attract buying as traders are concerned over the slow start to planting this year. Also, the cool, wet conditions have raised concerns about poor germination of those crops which have been seeded. Soil temps are not warm enough and the market wants to see more sunshine.

This past Friday's Cattle on Feed report was considered friendly to the market as it caught some by surprise who were expecting to see larger numbers moving ahead. Feeder cattle continue to make all time highs as most small specs are caught on the short side and are getting squeezed out in a brutal fashion. How some of these guys paying the kinds of prices that they are for feeders are going to be able to make any money on them is a big mystery to me but that does not seem to be impacting things at the moment. Hogs are bleeding out of some the premium in there as traders take a "show me" attitude towards the slaughter numbers and the impact from the PED virus.

Crude oil continues weak in today's session further retreating from the double top near the $105 level.

Silver has once again attracted selling as it neared $20. It remains stuck in a narrow range between that level and $19 on the bottom.