The DJ-UBS index lost one percent on the week as gains in many agricultural commodities and the above mentioned gasoline price developments were off-set by corrections among some of the index heavy constituents, such as crude oil and gold. The dollar ended higher following the allocation of 530 billion euros by the ECB on the assumption this would be the last central bank induced sugar rush for a while.
Silver
The silver bull carriage almost left the station on Wednesday when multiple technical bullish signals triggered a strong rally once 35.70 was broken. The break had investors piling in and before long a near-term target of 37.30 was reached and breached. What followed Thursday after Fed Chairman Bernanke failed to signal further quantitative easing sent the market into a flux as it dropped by 9 percent in just two hours. The sell-off was exacerbated as many new short-term tactical long positions had been initiated within the previous 24 hours and it now leaves many scratching their heads wondering what kind of foundation the rally had been built upon, apart from technical.
Gold
Just like silver investors, gold investors also got caught out by the relative upbeat comments from Bernanke which caused some revisions to previous expectations about low interest rates until 2014. It was the introduction of this forecast by the Federal Reserve on January 25 that triggered an upward shift in gold back above 1,700 and which saw money managers slowly beginning to engage.
Oil
Crude oil traders began the week booking some profits following the strongest monthly performance since February 2011. The fear of supply disruption and continued strong demand from emerging economies and not least financial speculation has kept the price of Brent crude elevated above 120 dollars per barrel for a couple of weeks now.
In the US politicians are becoming increasingly vocal in calling for the release of strategic reserves following a 16.5 percent spike higher in retail gasoline prices since mid-December. The average price currently stands at $3.74 per gallon, the highest price on record for this time of year and with the switch toward more expensive summer blends in March and April US motorists could be facing record prices this summer just as the campaign for the Presidential election kicks off.
