Precious Metals: Palladium rises on improving investment demand

Precious metals except for gold advanced on Monday amid hopes the Fed will continue its loose monetary policy as Ben Bernanke said on Saturday that the US economy still faces downside risks. Moreover, persistent supply concerns lent additional support for platinum and palladium.

Gold was the only loser, being pressured by solid greenback. At the same time, speculation that physical demand from China will increase after the Lunar New Year holidays was supportive for the yellow metal.

Silver rebounded on hopes a recent fall in prices may boost physical demand. However, the grey metal remained under notable selling pressure amid weak gold prices and firm US Dollar.

Platinum rallied on escalated supply concerns after Anglo American Platinum reported about new clashes between rival groups at its Siphumelele mine.

Palladium jumped on signs of strong investment demand. Physical palladium ETPs witnessed inflows of USD24 million amid strong automobile demand in and a deficit on the physical markets as sales from Russia are declining.


Industrial Metals: Zinc slid despite brighter demand outlook

Industrial metals were bearish on Monday amid weak appetite for growth sensitive assets. The risk sentiment remained weak after the data last week showed the Eurozone’s and Japan’s economies performed worse than expected in the last quarter of 2012.

Aluminum retreated from a six-week high on concerns that Chinese investors who returned after holidays will start selling the lightweight metal. Furthermore, elevated LME inventories and bleak growth outlook added pressure on the metal.

Copper declined on rising global output. Antamina, the world’s eighth largest copper mine, plans to keep high output level of 450,000 tonnes this year. However, the red metal may seek support from hopes of stronger China’s demand.

Nickel dipped on weak demand from stainless steel producers and global growth fears. High LME stockpiles also continued to push the metal lower.

Zinc sagged 0.92% despite forecasts that the US consumption may grow 3% this year amid recovery of the housing market. Moreover, signs of rising investment demand and hopes for the improvement in China’s consumption may be supportive for the base metal.


Energy: Heating oil dives despite colder weather forecasts

Energy futures apart from natural gas finished in red on Monday as market participants shunned riskier assets after weak US industrial production data released on Friday. Fears over deepening recession in the Eurozone also weighed. Restricting the downswing, JODI data showed Saudi Arabia’s output reached a 19-month low of 9.03 million barrels per day in December.

Crude oil moved lower amid dismal US industrial production numbers and solid US Dollar. Meanwhile, investors anticipated the FOMC meeting minutes due on Wednesday and the EIA inventory report due on Thursday.

Brent oil declined on global growth fears. However, the downward trend remained capped by lower supplies from non-OPEC countries.

Natural gas was the only gainer as weather models called for colder temperatures in the most US territory. Weighing on the commodity, the US inventories dropped less than expected last week, according to the latest EIA report.

Heating oil moved in tandem with crude and Brent oil, retreating 0.11%. However, the commodity may seek support on lower US stockpiles and colder weather forecasts in the US.


Agriculture: Coffee tumbled amid rising global supplies

Farm commodities declined during the last five trading days amid worries over ample global supplies and weak demand for US grains. Updated weather forecasts suggesting rains in Argentina and the US Great Plains also added pressure.

Wheat dropped as expectations for snow in the US Great Plains removed supply risk premium. However, wheat futures may climb on speculation that US farmers will harvest 3.5% less in 2013 even despite planting the most acres in four years.

Corn plunged as weather forecasts predict rains in Argentina that may boost drought-stricken harvest. Adding pressure, demand for US export remained weaker than expected in the week ended February 3.

Sugar dipped amid global oversupply concerns. However, the sweetener may be boosted by speculation that lower prices may attract more buyers at a time when Brazilian cane growers are likely to direct more cane to make ethanol.

Coffee was the top-loser as supply glut may be further exacerbated by lack of demand from end users. Rains in Brazil expected this week will be beneficial for coffee crops thus may further increase global production.


EXPLANATIONS

Commodities

  • Gold - spot 995 fine gold

  • Silver - spot 999 fine silver

  • Platinum - spot platinum with minimum purity 99.95%

  • Palladium - spot palladium with minimum purity 99.95%

  • Aluminium - three-month forward contract on the London Metal Exchange

  • Copper - three-month forward contract on the London Metal Exchange

  • Zinc - three-month forward contract on the London Metal Exchange

  • Nickel - three-month forward contract on the London Metal Exchange

  • Crude oil - light, sweet crude oil active contract on the New York Mercantile Exchange

  • Brent oil - Brent oil active contract on the New York Mercantile Exchange

  • Natural Gas - natural gas active contract on the New York Mercantile Exchange

  • Heating oil - heating oil active contract on the New York Mercantile Exchange

  • Sugar - white sugar active contract on the Chicago Board of Trade

  • Wheat - wheat active contract on the Chicago Board of Trade

  • Coffee - benchmark Arabica coffee active contract on the NYB-ICE Futures Exchange

  • Corn - corn active contract on the Chicago Board of Trade

Indices

  • Dow Jones-UBS Precious Metals Subindex Total Return - commodity group subindex composed of gold and silver; the index reflects return on underlying commodity futures price movement

  • Dow Jones-UBS Industry Metals Subindex Total Return - commodity group subindex composed of futures contracts on aluminium, copper, nickel and zinc; the index reflects return on fully collateralized futures positions

  • Dow Jones-UBS Energy Subindex Total Return - commodity group subindex composed of futures contracts on crude oil, heating oil, unleaded gasoline and natural gas; the index reflects return on fully collateralized futures positions

  • Dow Jones-UBS Agriculture Subindex Total Return - commodity group subindex composed of futures contracts on coffee, corn, cotton, soybeans, soybean oil, sugar and wheat; the index reflects return on fully collateralized futures positions

Chart

  • SMA (20) - Simple Moving Average of 20 periods

  • SMA (60) - Simple Moving Average of 60 periods

  • Correlation - a statistical measure of the linear relationship of two random variables. It is defined as the covariance divided by the standard deviation of two variables

Indicators

Daily Ranked Price Moves - daily price changes in an ascending order for positive changes and in a descending order for negative or mixed changes

Monthly Ranked Price Moves - monthly price changes in an ascending order for positive changes and in a descending order for negative or mixed changes