Cocoa futures were pummeled this morning, as an overall weakness in the commodity sector, tied to a rebound in the U.S. Dollar, caused speculative liquidation in the Cocoa market. A weaker British Pound vs. the U.S Dollar caused arbitrage selling in the New York market to start the session. Trade and origin selling followed, as the West African harvest continues to move forward, moving the market through support points at $2000 and $1980, triggering speculative sell-stops along the way. Buyers were scarce as prices fell, with major support at the 100-day moving average of $1948 giving way and sparking fresh short-term momentum based selling. Buyers were found just above the $1900 area in the December contract, which put an end to the day's losses. $1900 is seen as psychological support for December Cocoa, with resistance found at $1948. December Cocoa closed at $1917, down $113.

After hitting 27-year highs yesterday, Gold futures were ripe for a correction and correct it did, as prices fell over $20 at its worst levels of the session, as a commodity wide sell-off hit Gold and the precious metals sector particularly hard. A rebound in world equity markets and a recovery in the U.S. Dollar made Gold investments less attractive to non-U.S. buyers. Moderate sell-stops were seen being triggered below support at $740.00. Despite the heavy selling seen today, technical damage was seen as minimal, as the widely watched 20-day moving average was not violated and the long-term uptrend remains intact. Continued speculation the U.S. Federal Reserve is still in an easing mode, is fanning fears of rising inflation, which if uncovered in economic data going forward, would be supportive to the precious metals sector and Gold in particular. The Next support point for December Gold is seen at $727.00, with resistance found at $747.00. December Gold closed at $736.30, down $17.80.

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