Precious metals mostly higher as lower prices attract more buyers

Precious metals except for silver ended last week on the positive note on signs that a recent decline in prices spurred physical demand for the metals. However, record ETPs outflows as well as broadly stronger U.S. Dollar capped gains of the commodity group.

Gold climbed on ideas that jewelers and other users took advantage of the largest drop in prices in 33 years. Sales of the U.S. American Eagle gold coins jumped to 153,000 ounces, a three-year high, the U.S. Mint said.

Silver edged lower despite a rebound of other precious metals. The grey metal remained under heavy selling pressure amid signs of weakening investment demand and high global inventories. However, silver drew strength from increased physical demand.

Platinum and Palladium traded higher after Anglo American, the world’s biggest platinum producer, reported its output dropped 2% in Q1 because of strikes at some of its mines. The miner also added it expects platinum market to be balanced this year amid production cuts. At the same time, persistent weakness of the EU car market limited an upward trend of the platinum-group metals.


Industrial metals decline on record LME inventories, global surplus

Industrial metals finished in red territory on Friday amid fears over global economic recovery and record high inventory levels at the LME. Recent disappointing numbers from the EU and U.S. also pushed the commodity sector lower.

Aluminum declined despite a fall in LME inventories. The lightweight metal tracked weakness of other base metals and appreciation in greenback.

Copper dipped as inventories at the LME hit the highest level since 2003. Stocks at the LME climbed 0.6% to 612,350 tonnes on Thursday, while cancelled warrants declined for the fourth consecutive session to 148,575 tonnes. Meanwhile, experts now predict copper market to be in surplus of 120,000 tonnes this year compared to a previously expected deficit of 12,000 tonnes.

Nickel plunged after Macquarie Group reported nickel surplus is likely to reach 82,000 metric tonnes in 2013 compared to 54,000 metric tonnes estimated previously.

Zinc dropped amid elevated LME inventories and stronger U.S. Dollar. Persistent surplus on the physical markets also weighed on the metal.


Energy futures extended gains on bargain hunting, cold US weather

Energy futures were bullish on Friday after posting sharp losses earlier in the week amid global demand concerns. Energy futures found support on signs that lower prices attracted investors to seek cheap valuations as prices fell to the lowest mark since December.

Crude and Brent oil advanced on bottom fishing as a drop in prices attracted market players. Supporting energy prices, U.S. crude oil inventories unexpectedly fell last week, according to the EIA report. U.S. crude oil stocks declined 1.2 million barrels last week compared to a forecast of a 1.2-million-barrel jump. However, the upswing was limited as hedge funds cut bullish bets. The CFTC said U.S. money managers reduced their net-long positions by 6.8% in the week ended April 16.

Natural gas traded near the highest level since July 2011 as U.S. inventories continued to decline. Moreover, futures gained inspiration from forecasts of below-normal temperatures in the Northeast and Midwest of the U.S.

Heating oil moved in sync with oil prices, adding 0.31% amid buying on the dips and expectations of cold temperatures in the U.S. However, a larger-than-expected jump in the U.S. stockpiles last week restricted gains of the commodity.


Rural commodities rally on adverse weather in key growing areas

Farm commodities climbed on Friday amid concerns over adverse weather in the U.S. Great Plains region and the EU. Meanwhile, a record fund net short position, which may trigger short-covering, was supportive for softs.

Wheat moved higher as cold and wet weather in the key growing regions is slowing early planting and may damage winter crops. The USDA reported 36% of U.S. winter wheat was rated as good or excellent last week, down from 65% in the same period in 2013.

Corn jumped on talks U.S. corn planting data may indicate crop progress at 7% compared to average figure of 18%. The latest USDA data showed that only 2% of corn was planted as for April 14 compared to 16% planted a year earlier.

Sugar bounced off a 33-year low on talks a record fund’s net short position may trigger short-covering. However, ideas about bumper Brazilian crops this year weighed on the sweetener.

Coffee climbed amid fears over Central American harvest amid spreading coffee leaf rust. At the same time, a looming start of Brazilian harvesting capped gains of Arabica coffee futures.


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