Tariffs and trade war are the key factors afoot in world markets following last week's central bank-driven volatility. Emerging markets find themselves in the crosshairs with economies linked to Chinese exports hardest hit.
Article / 25 February 2013 at 11:18 GMT

Look out for sugar and coffee as negative momentum takes hold

Head of Commodity Strategy / Saxo Bank

Our momentum indicator on major commodities has now almost completely turned negative across the different sectors, with Brent crude oil turning on Friday following the sell-off earlier in the week. Sugar has seen the longest period of negative momentum without actually showing much of a return from a seller's perspective. Money managers have been busy selling both sugar and coffee, with the latest data from the CFTC showing that the speculative net-short positions held in both commodities are at or near record highs. Any change in the negative perception of these two could trigger a major round of short covering, thereby helping to assist a move higher.

Gold investors, both in futures and ETP's, stepped up their selling last week when a technical sell signal and other non-supportive news eroded sentiment further. The much reduced holdings, especially in futures and the fact that the gross-short is now at its highest level since 1999, when both the BoE and SNB were busy selling out of their gold reserves, has the potential of seeing support return. A dovish Ben Bernanke at this week's testimony before Congress and the Senate may help sentiment, with resistance currently found at 1,605 USD/oz and 1,625 USD/oz.


Commodity momentum


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail