NEW YORK (TheStreet) -- Gold continues to trade around $1,200 as it has for all of 2015, crossing just above the key level this week, something it has not done since the beginning of June. Eric Zuccarelli, independent metals trader on the Nymex trading floor, tells TheStreet's Jill Malandrino that he expects gold to continue trading within a range between the $1,160 and $1,220 levels, with $1,200 being the rotation number for rallies and selloffs.
Copper, on the other hand, is in a more discernible downtrend on the short- and long-term charts. Zuccarelli said there were a lot of open interest at around $2.90, but that is where the longs got trashed and the technical damage was done and the shorts started to pile in.
A big development late last week was some cancelled warrants, or the ability to take metal out of the London Metal Exchange warehouse, and material went back on warrant to the tune of 40,000 tonnes. This means that supply went back into the market while demand is weak, which moves the price lower. More material in the LME, Comex and poor demand out of Japan and China is lending to the bearish case.
Trade in crude is also range bound and Zuccarelli believes the $60 level is where you will see the rotation around the up and downside. There have been a number of attempts at $62 and failures at $57. Fundamentals continue to be weak as demand is not as strong as it normally is during this time of year with the summer driving season.
Unless there is a dramatic weather event in the Gulf of Mexico or other key region, Zuccarelli said crude will continue to trade the same and lower because the supply is just not coming out of the system and producers have not dialed back on production. In addition, crude is in contango, which means price for spot (or the nearby futures contract) is trading at a discount to crude oil to be delivered in future. This occurs when supply is greater than demand.