Base Metals Close Lower on Surplus Worries

Precious Metals Mixed on US Jobs Report

Gold lead gains during the last trading day of the previous week amid a downbeat US payrolls report, which revealed the economy added the fewest number of jobs in seven months in April, which fuelled concerns that the US Fed will stay on a cautious path and will hardly lift its interest rates before the end of the year. The report showed the US economy added 160,000 jobs over last month, missing the expectations for the 200,000 positions increase. On the Comex division of the New York Mercantile Exchange, gold futures for delivery in June hit a midday peak of $1,297.70 per troy ounce, before settling at $1,294.00 by the end of trade on Friday, showing an advance of 1.71%, or $21.70, compared to Thursday’s final price. Over the course of the previous week, gold futures jumped a modest 0.27%, or $3.50, as gains were limited by hawkish remarks by a senior Fed’s official. Nevertheless, the yellow metal still posted the second consecutive weekly rise. Meanwhile, in view of the recent economic developments, gold is up nearly 22% so far in 2016.

Silver, along with gold, tacked on during Friday’s trade, as expectations that the Fed would normalize interest rates as soon as June faded. On the Comex, silver prices soared 20 cents, or 1.15%, to finish Friday’s session at $17.78 a troy ounce. Nevertheless, despite the uptick posted during the last trading day, silver futures settled lower, declining as much as 1.64% over the course of the whole trading week.

Platinum also rose on Friday along with other precious metals, with futures for July delivery advancing $21.30 to settle at $1,085.10 per ounce, while on the week prices added just 0.62% on the Nymex.

Palladium was on an up note on Friday, jumping to $607.20 an ounce. In spite of that, palladium did not manage to hold gains on the week, with prices slumping as much as 3.26% on the New York Mercantile Exchange.

 

Base Metals Close Lower on Surplus Worries

Aluminum posted losses on Friday, with three-month metal’s contract sliding 1.5% on the London Metal Exchange by the end of trade, finishing at $1,608.5 a tonne. The dip was bolstered by worries over Chinese demand and the state of the economy overall. In light of the decline posted on Friday, aluminum failed to lead gains over the course of the whole trading week, closing down 5.26% and reversing metal’s strong performance shown two weeks ago.

Copper futures for delivery in July reversed their uptrend observed during the week ended April 29, tumbling to a midday low of $2.135 a pound on Friday, a level not seen since April 12, before finishing at $2.154 per pound, still down 0.2 cents, or 0.09% compared to Thursday’s close. The down move was mainly caused by concerns about demand for the metal from China ahead of the monthly trade data due on Sunday. Later in the week, the General Administration of Customs said both exports and imports declined more than expected, bringing worries over the health of Chinese economy back on the table. In view of Friday’s drop, prices of the red metal did not manage to advance over the course of the prior trading week, settling 11.7 cents, or 5.62%, lower on the Comex division of the New York Mercantile Exchange and posting their biggest weekly decrease since early 2015.

Nickel was down on Friday, closing 4.5% lower compared to Thursday’s end price, at $9,020 a tonne, after touching a two-week bottom of $8,985 amid concerns over market surplus. Over the past five trading days, metal’s futures did not manage to rocket, finishing 4.09% lower on the London Metal Exchange.

Zinc dipped 1.4%, to $1,861 a tonne on Friday on the LME. For the week, futures of the metal slid even further, settling down 2.61%.

 

Energy Commodities Enter Bearish Territory

Crude oil futures for delivery in June advanced on Friday, closing up 34 cents, or 0.77%, to end the week at $44.66 a barrel on the back of a huge wildfire in Canada, which obstructed the country’s oil sands production. Despite a modest uptick, on the New York Mercantile Exchange, crude oil futures for delivery in June slumped 2.74%, over the course of the whole trading week, finishing a four-week winning streak. In the meantime, New York-traded crude oil futures are up nearly 55% since mid-February, when prices fell to $26.05 a barrel, the lowest in 13 years. Despite that, analysts are warning that market situation remains quite weak amid global supply glut that we have been observing lately. Besides all, oversupply worries were boosted by a consecutive jump in US crude stockpiles that hit a fresh record high of 543.4 million barrels last week, according to US Energy Information Administration.

Brent oil futures for delivery in June also tacked on by the end of Friday’s trade to settle at $45.37 a barrel on the ICE Futures Exchange, up 36 cents, or 0.8%, from Thursday’s close. The up move was caused by news about attacks on offshore oil facility in Nigeria paired with reports on fighting in Libya. Despite Friday’s gains, on the week London-traded Brent oil futures did not manage to rise, slipping 4.22% and posting the fourth first weekly drop over the past five weeks. Nevertheless, Brent futures rose roughly 60% since declining below $30 per barrel on February 11. In the meantime, the spread between Brent and WTI crude contracts stood at $1.45 by the close of trade on Friday.

Natural gas was down around 1.5% on Friday, before going up along with oil on the back of reports that revealed Canada’s wildfires spread further, potentially harming oil production. However, natural gas futures did not rise over the week on the New York Mercantile Exchange, bringing weekly loss to 3.51%.

 

Grains Finish Mixed on Global Cues

Corn posted gains on Friday amid uncertainty over the size of corn crop in Brazil, which has been harmed by persistent dryness throughout the growing season, which in turn spurred export demand for US supplies. Moreover, the up move was also supported by indications that farmers in the United States are scaling back on grain acreage from last month’s USDA projections on rumours that some producers are seeding more soybeans. At the Chicago Board of Trade, corn futures for delivery in July finished Friday’s session at $3.76 a bushel, bringing the daily increase to 0.8%. On the week, prices for corn, however, reversed their outstanding performance, declining 3.64% at the CBOT.

Wheat prices erased gains posted over the week ended April 29, with futures sliding by the end of trade last week, being mainly weighed down by expectations of excessive hard red winter wheat crop in the US. Besides that, the current sizeable surplus, which we have been observing as of late, is said to be worsening in the foreseeable future. Based on that, at the Chicago Board of Trade, the most actively-traded grain futures finished 5.07% lower compared to the previous week’s end price, posting the most substantial weekly drop since mid-November last year.

Soybeans managed to lead gains during the last trading day of the previous week, rising on the back of expectations for an uptick in demand for the US beans, as the crop in Argentina has been harmed significantly by flooding this season. At the Chicago Board of Trade, soybean futures for delivery in July advanced 22.5 cents, to settle at $10.34 a bushel. On the week, prices of soybeans climbed a modest 0.49% compared to the previous week’s finishing price.

Coffee was trading in green territory over the past trading week, with the best-traded futures rising as much as 2.47% from last week’s end price.

 

EXPLANATIONS

Commodities

• Gold - COMEX active contracted (USD/t o.z.)

• Silver - COMEX active contract (USD/t o.z.)

• Platinum - New York Mercantile Exchange active contract (USD/t o.z.)

• Palladium - New York Mercantile Exchange active contract (USD/t o.z.)

• Aluminum - Active contract of primary aluminum of minimum 99.2% purity at the LME (USD/MT)

• Copper - Active contact of electrolytic copper at the LME (USD/MT)

• Zinc - Active contract of zinc od minimum 99.995% purity at the LME (USD/MT)

• Nickel - Active contract of nickel of 99.8% purity at the LME (USD/MT)

• Crude oil - light, sweet crude oil active contract on the New York Mercantile Exchange (USD/bbl.)

• Brent oil - Brent oil active contract on the ICE Futures Europe (USD/bbl.)

• Natural Gas - natural gas active contract on the New York Mercantile Exchange (USD/MMBtu)

• Heating oil - heating oil active contract on the New York Mercantile Exchange (USD/gal.)

• Wheat - wheat active contract on the Chicago Board of Trade (cents/bu)

• Corn - corn active contract on the Chicago Board of Trade (cents/bu)

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

• Soybeans - active contract on the Chicago Board of Trade (cents/bu)

Indices

• S&P GSCI Precious Metals Total Return Index - commodity group subindex composed of gold and silver; the index reflects return on underlying commodity futures price movement

• S&P GSCI Industrial Metals Total Return Index - commodity group subindex composed of futures contracts on aluminium, copper, lead, nickel and zinc

• S&P GSCI Energy Total Return Index - commodity group subindex composed of futures contracts on crude oil, Brent oil, RBOB gas, heating oil, gas oil and natural gas

• S&P GSCI Agriculture Total Return Index - commodity group subindex composed of futures contracts on wheat, red wheat, corn, soybeans, cotton, sugar, coffee and cocoa

Indicators

Long-term price forecasts - aggregated price forecasts based on predictions of 20 international banks forecasts

USDA Wasde Total Estimated Inventories (Today) - current level of inventories of wheat in 1000 MT, corn in 1000 MT, soybeans in million bushels and green coffee in 1000 bags

•  Download Full Commodities Technical Analysis