Weak Dollar, safe haven buying helps Gold rally above $1300, Silver $21 Nat Gas

John J Hardy of Saxo Bank said that precious metals made pronounced gains challenging key technical levels. Weak dollar and US retail sales data laso weighed on market sentiments boosting risky and precious assets on 

LONDON (Commodity Online): 

The week saw gold climbing over $1300 while silver poked its head above $21 levels attaining the highest level since mid-November.

John J Hardy of Saxo Bank said that precious metals made pronounced gains challenging key technical levels. Weak dollar and US retail sales data laso weighed on market sentiments boosting risky and precious assets on the possible implicationof FEd polcy. Meanwhile, menacing winter weatehr saw spot natural gas ripping higher on the week, John J Hardy said.

Energy markets in the US remain squarely in focus on yet another wave of extreme winter weather blasting the northeastern and eastern portion of the country, which is the most heavily populated. The front March Natural Gas contract pushed back above the 5.00 dollar level in very volatile trading. Meanwhile, daily closes in the back months have remained capped by the technically significant 4.65 area, which is a 100% extension of the previous rally from the November lows.

The March to April roll is a seasonally critical one as the timing of the US winter’s end is at stake. These two months could continue to swing wildly as they have recently as weather forecasters hold the market in their thrall. Inventories are at their lowest level for this time of the year in 10 years for key areas of the country and with yet another large draw last week of -237 BCF before another round of cold extremes hit this week. Traders will need to tread carefully as the risk of a combination of low inventories and an unusually long winter could stretch prices and spreads in wild swings. The timing of the switch to building inventories from drawing on them will be critical.

WTI Crude was about flat for the week but is still trading at very high levels just under 100 dollars a barrel and thus close to the highs of the range since October as cold weather remains a focus rather than risks to demand from spotty and inconsistent US data. The irony here could be that weather is both boosting energy prices and weakening the economic data, which would normally act as a headwind on prices. Products were generally higher on further draws on inventories. The WTI/Brent spread shrank to its lowest level by later in the week, at just below 8.50 dollars/bbl., since last October on the North American weather focus. US Crude stocks have come off their lows and remain at the upper end of their five-year range, though distillates and propane are extremely low on exceptional demand driven by cold weather.