Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Global Commodities Brief Midday GMT: Finally A Golden Opportunity To Buy Gold?

Summary

Crude, gold, silver all down since the Friday close, only crude oil has recovered some of those losses thus far. Softs also remain lower but most are seeing modest gains thus far today, sugar has ceased its dramatic end of weak fall but has not begun recovering. Commodity prices are suffering from a combination of anticipated lower demand from China and other Asian markets after the higher than expected Chinese inflation data last week, the strengthening USD (from EUR weakness on concern about Ireland) and a general pullback in risk appetite.
 
 
Why Is Gold Stabilizing? Is This A Dip To Buy?
It’s worth noting that for the first half of 2010 gold’s massive rally was fueled by concern about the EUR losing value due to money printing to bailout the PIIGS, and then later in the year by concern about the USD losing value from QE2 money printing.
 
Despite the official outbreak of market fear about a coming Irish bailout/insolvency and thus about the EUR, gold remains stable. This suggests that the impetus behind gold’s recent rise was indeed worry about the value of the USD, NOT the EUR.  
Gold has stabilized around support from its rising trend line around $1370. We suspect this stability rests on the assumption that the Irish situation will soon be stabilized. If not, we suspect new fear about the EUR as a currency could power gold back towards $1400.
 
While in the short term EU leaders appear ready to stabilize Ireland and US QE2 trade is over, the longer term pressures to expand money supply for both the EUR and USD remain. Gold’s near term movements likely hinge on how well the EU situation can be calmed. Remember that in addition to Ireland, Portugal has been in the news as its PM has threatened to withdraw from the EU.
DISCLOSURE & DISCLAIMER: NO POSITIONS, THE ABOVE IS FOR INFORMATIONAL PURPOSES ONLY AND NOT TO BE CONSTRUED AS SPECIFIC TRADING ADVICE. RESPONSIBILITY FOR TRADE DECISIONS IS SOLELY WITH THE READER