Commodities Start Week Hot

Commodities start week hot on hopes for European settlement, global economic growth

The commodity complex got the week off to a good start with jumps in precious metals, industrial  metals, oil and the entire complex.

Oil, as represented by United States Oil Fund USO jumped to near $99/bbl and the ETF climbed 1.1% in early trading to put it well above its 200 day moving average and close to crossing its 50 day moving average.

Copper was an early strong performer with iPath Dow Jones/UBS Copper Index ETN JJC jumping 1.5% and in the precious metals complex, early strength was seen, as well with gold, iShares Gold Trust IAU climbing 0.4% as gold reached $1674/oz and silver advanced 1.6% to $32.21 with its ETF, iShares Silver Trust, SLV adding 0.6% in early trade.

The general commodity complex advanced on Monday, as well, with DB Commodity Tracking Index DBC adding 0.8%.

Speculative interest in metals is at recent highs based on hopes for better global growth and a resolution to the European debt crisis.  Institutions have expanded long positions in copper, silver and gold in expectations of rising prices. and expanded industrial output.

On a technical basis, gold IAU silver SLV and copper JJC have all made significant reversals upwards since the beginning of the year as hedge funds and institutions increase their holdings in this area.

Bottom line: The commodity complex is betting on a European solution and better global growth ahead.  Volatility will continue in these markets based on global news flow.

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