Precious metals climbed after U.S. employment numbers

Precious metals apart from palladium gained amid mixed data from the U.S. U.S. employers added more jobs than forecast last month, while factory orders fell much more than expected in April. The commodity sector drew strength from broadly weaker U.S. Dollar and strong physical demand. However, a record drop in ETP holdings limited the upswing.

Gold advanced for the second day on Friday as physical demand from the U.S., China and the Middle East soared after a price collapse on April 15. The U.S. Mint run out of its smallest gold coin while the U.K. Mint announced the demand for gold coins more than tripled last month. Restricting an upward trend, the data showed market players sold 174 metric tonnes of their ETP assets last month.

Silver rallied following gold prices on mixed U.S. data. Strong physical demand as well as weaker greenback also lifted the grey metal. However, record outflow of ETP holdings continued to weigh on the precious metal.

Platinum and Palladium were mixed, with platinum gaining 0.05% and palladium retreating 0.11%. Both metals may seek support from a record deficit on physical market and a rebound in the U.S. car demand.


Industrial metals sharply higher as U.S. firms increased hiring

Industrial metals rallied on Friday after the data indicated U.S. employers added 165,000 jobs last month compared to a forecast of 146,000. However, a bigger-than-expected decline in the U.S. factory orders last month put heavy pressure on the metals.

Aluminum rose tracking copper’s gains amid upbeat data from the U.S. jobs market. At the same time, the metal came under pressure as LME inventories remained near a record of 5.24 million tonnes last week.

Copper surged on a pickup in U.S. hiring. However, a surplus on physical markets continued to limit gains. Copper market was in surplus of 70,000 tonnes in January versus a deficit of 60,000 tonnes a year earlier, according to the ICSG.

Nickel bounced off a four-year low on sharp rally in copper prices and high cancelled warrants ratio at the LME. However, elevated LME inventories capped the upside. LME stocks approached a record-high of 175,860 tonnes last week.

Zinc advanced on weaker U.S. Dollar and strong performance of other base metals. Lower LME and SHFE stocks coupled with a high cancelled warrants ratio at the LME also supported the industrial metal.


Energy futures soar after U.S. payroll data; elevated stocks cap gains

Energy futures surged on Friday as demand for risky assets improved after better-than-expected figures from the U.S. labour market. However, signs of weaker U.S. oil demand as well as record-high stockpiles weighed on the commodity group.

Crude and Brent oil jumped on upbeat U.S. jobs data. However, the upswing was limited amid combination of falling demand and an increase in supplies in the U.S. The EIA reported that total U.S. oil demand slipped 3.6% last week, while U.S. inventories rose 6.7 million barrels last week to reach a 30-year high.

Natural gas recovered some of its previous losses despite bigger-than-expected buildup in the U.S. stockpiles last week. The latest EIA report showed U.S. inventories surged 43 billion cubic feet last week compared to a forecast of a 27-billion-cubic-feet increase. Moreover, mild spring temperatures are likely to weigh on demand for natural gas.

Heating oil moved higher despite expectations of a seasonal decline in consumption and last week’s jump in the U.S. inventories. U.S. distillate fuel stocks climbed 500,000 barrels last week, while analysts expected no changes in inventory.


Farm commodities mostly lower as U.S. weather may improve

Farm commodities except for coffee were bearish on Friday despite improved appetite for risky assets after strong U.S. employment numbers. Meteorologists called for drier and warmer weather in the U.S. top growing regions this week thus pushing grains lower.

Wheat dropped on hopes the U.S. weather will improve next week. From the demand side, wheat was pressurized by absence of demand from Egypt, which was expected to launch a tender last week. Meanwhile, Informa Economics reduced its forecast for the U.S. hard winter wheat harvest to 798 bushels.

Corn retreated as market players expected U.S. farmers to speed up sowing as weather may improve this week. Currently, only 5% of the US corn was sown as of April 28 versus a five-year average of 31%, according to the USDA.

Sugar dropped amid abundant global supplies. Philippines are expected to produce 2.5 million tonnes of the sweetener in the year that starts on December 1 compared to earlier estimate of 2.45 tonnes, reported the USDA.

Coffee was the only gainer on talks Brazil, despite delaying announcement of the minimum domestic prices for coffee, will provide support to the beans’ prices.


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