Commodity prices remained under pressure Monday as mixed results from recent economic data showed recovery may be delayed. Crude oil price plunged to as low as 63.4 before closing at 64.05 (-4%). Heating oil, gasoline and natural gas dropped -4.4%, -2.8% and -3.5% to 1.63, 1.74 and 3.49, respectively.

Luxembourg Finance minister Jean Claude Juncker said that the Eurozone is still in the midst of the crisis. Earlier yesterday, the Eurozone reported Sentix investor confidence which slid to -31.3 in July, worse than both market expectation and the reading in the prior month. These helped push the euro lower against the dollar.

The black gold 's sharp fall stabilized after the US reported better-than-expected ISM non-manufacturing index which rose to 47 in June, higher than consensus of 46 and 44 a month ago. Many of the components also showed significant improvements: Business activity surged +7.4 points to 49.7 while employment rose +4.4 points to 48.6. New exports orders climbed to 54.5, the highest level since March 2008.

Today in Asian session, the benchmark contract for crude oil trades narrowly around 64 as the market awaits the inventory report from API. We expect the crude inventory should have declined for another week while gasoline and distillate stockpiles probably gained further. All we hope is that the pace of increase has moderated.

Precious metals weakened as the dollar rose against major currencies. Benchmark contracts for gold and silver slipped -0.7% and -1.3% to 924.3 and 13.24, respectively. Declines in PGMS were more severe with platinum and palladium losing almost -4%. USD's rally may be halted as it remains a concern that World leaders may bring out the discussions about a new reserve currency at the G-8 meeting later this week.

Commitments of Traders
  • Crude Oil: Net speculative long positions rose modestly to 41K.
  • Natural Gas: Net shorts reduced slightly but remained at record high level, suggesting traders stayed bearish on gas' outlook
  • Gold: Net longs dropped for the 3rd consecutive week to 164K contracts.Subsided investment demand in both futures and ETFs made gold struggle to go higher but have also reduced volatility
  • Silver: Traders trimmed net long positions as price may remain in consolidation in coming weeks
  • Platinum: Net long positions gained further but the pace has slowed down