financialsense.com / By Clif Droke / July 19, 2012
The summer has been a dizzying one for commodities. The last four weeks have witnessed the price of corn soaring toward an all-time high due to withering heat in the Corn Belt states. At the same time, this weather-driven bull market in the grain market, as well as the recent oil price rally, has left investors wondering if this summer might finally be gold’s time to shine.
In the same period that the CRB Commodity Index has rallied off a 52-week low, the price of gold hasn’t made much headway at all. Gold remains stuck in neutral as both professional and retail traders have shown little inclination to bid up prices. The high frequency speculative crowd had its wings clipped last summer when CME Group initiated a series of margin requirement increases. Since then the momentum crowd has been conspicuously absent from the gold arena.
Small retail investors have also been missing in recent months. Gold purchases have fallen to levels not seen since before the 2008 financial crisis according to figures released by the world’s major mints. According to the U.S. Mint, second quarter sales of American Eagle gold coins fell more than 50 percent from the year-ago period to 127,500 ounces. This was the worst three months since the second quarter of 2008, just prior to the worst part of the global credit crisis.