Oil Prices Swing in Volatile Trade

Precious Metals at Record Lows on Rate Hike Expectations

Gold continued its downward trajectory, finishing the week near the lowest level since February 2010, as traders rushed to sell the metal on the back of bolstered expectations for a December rate hike by the Fed. Bullion futures for delivery in December plummeted 0.15%, or $1.60, to settle at $1,076.30 a troy ounce by the end of Friday’s trade on the Comex, after falling to $1,062.00 on Wednesday, a level not seen in almost six years, following the minutes of the Fed’s October meeting, showing that most members of the FOMC expect a rate hike next month. As for the week, prices of gold sank 1.61%, posting the fifth consecutive weekly loss and longest losing streak since late July.

Silver futures for December delivery plunged 0.89%, or 12.6 cents, to settle at $14.09 a troy ounce on the Comex division of the New York Mercantile Exchange by the end of trade on Friday, after falling to as low as $13.99 on Wednesday, marking the metal’s lowest close since August 26. On the week, silver prices also did not manage to book any gains, with best-traded futures for December delivery sliding 1.34%, the fifth consecutive weekly decline, amid the Fed’s interest rate hike timing.

Platinum futures continued to track their downtrend last week, with the most actively-traded platinum futures for January delivery slipping 0.68% on Friday to settle at as low as $840.40 per ounce, and sliding to a seven-year low to close 2.09% lower compared to the previous week’s closing price. Meanwhile, sell-off in platinum is expected to remain for longer, with prices of the precious metal plummeting to levels they were last seen during the global financial crisis in 2008.

Palladium exchanged hands for as little as $550.25 an ounce by the close of trade on Friday, which is down 1.85% compared to the previous week’s end price. At the current moment, palladium is back to levels it was last seen in mid-2010, trading at record lows for the past couple of months.

Base Metals in Red, China Worries Still Weigh

Aluminum, was trading higher on Friday, with US metal futures jumping $17 to settle at $1,483, as the news revealed that the stocks fell 7,950 tonnes to 2,945,850 tonnes. At the London Metal Exchange, spot aluminum futures, however, did not manage to gain, losing 1.98% on the week. Meanwhile, with the other metals being under substantial selling pressure over the recent months amid a stronger US Dollar and weak growth in emerging markets that continue to be the dampeners, the future jump in prices of aluminum remains rather uncertain.

Copper futures for delivery in December sank on Friday, falling 2.1 cents, or 1.04%, to finish the trading session at $2.055 a pound on the Comex after falling to $2.030 earlier in the day, marking the weakest level since May 2009. Besides all, copper prices kept being under significant selling pressure, shrinking 4.03%, on the week, and more than 30% since May, as a stronger US Dollar combined with ongoing concerns over future global demand, especially from China, the world’s top copper consumer, weighed, worsening traders’ sentiment.

Nickel closed Friday’s trade slightly higher, rising $15 to settle at $9,415, as stocks fell 672 tonnes to 418,056 tonnes. Despite a slight rebound, on the week, metal’s prices plummeted 10.88% at the London Metal Exchange on the back of worries about metal’s oversupply combined with weak demand from China, which continue to weigh on prices of nickel and leave the long-term outlook for the metal uncertain.

Zinc has been the standout performer of Friday’s trade, rallying $69 back to $1,600 a tonne at the LME, as expectations that China will implement production cuts caused the price to go up. Earlier in the week, metal’s prices have broken below $1,500 for the first time since 2008. On the week, metal’s prices still posted a loss of 2.38% amid persistent concerns about oversupply paired with weak demand from China.

Oil Prices Swing in Volatile Trade

Crude oil was trading mixed last week, swinging between losses and gains on Friday, as traders reacted to the expiration of the December WTI oil contract. On the New York Mercantile Exchange, crude oil futures for delivery in December fell 15 cents, or 0.4%, to finish Friday’s session at $40.39 a barrel, after hitting a midday low of $38.99, a level not seen since August 27, while the most actively-traded futures for delivery in January tacked on, following a decrease seen in a closely-watched gauge of US drilling activity. Over the course of the previous trading week, New York-traded oil futures still sank 2.43%, posting the third straight weekly decline.

Brent oil futures for delivery in January inched up 48 cents, or 1.09%, to settle at $44.66 a barrel by the end of Friday’s trade on the ICE Futures Exchange, after rallying to a session’s high of $45.50 amid short-covering ahead of the weekend. For the week, London-traded Brent oil futures added 0.61%, as French air strikes in Syria bolstered concerns about a disruption to the world’s supplies from the Middle East. In the meantime, the spread between the US and the European benchmarks stood at $2.76 per barrel on Friday compared to $2.46 by the end of trade on Thursday.

Heating oil futures for December delivery slipped 0.78% over the prior trading week, settling at $1.3871 per gallon by the end of Friday’s session on the Nymex.

Natural gas futures sank to the lowest level in the past month on Friday on the back of warmer outlook and healthy storage injection. On the New York Mercantile Exchange, natural gas futures for December delivery plunged 13.1 cents, or 5.76%, to settle at $2.145 per million British thermal units by the close of trade on Friday, after sliding 5.02% to $2.291 earlier in the day. As concerns the whole trading week, natural gas prices plummeted 7.34%, being weighed down by milder weather forecasts for the next two weeks that dampened near-term demand expectations for the fuel.

Agricultural Commodities Jump Amid USDA Report Data

Corn futures finished the previous week slightly higher, being supported mainly by gains in the wheat market. At the Chicago Board of Trade, corn futures for delivery in December tacked on 1 cent, or 0.3%, to settle at $3.65 a bushel by the close of trade on Friday. Over the course of the previous week, the most actively-traded corn futures added 1.7%, as the two grains tend to trade together because they can substitute one another in animal feed.

Wheat has been rather volatile over the course of the last week, though still closing higher, rising on the back of ongoing positive demand that followed upbeat export sales announced in the prior trading day, when the USDA said net wheat sales on the week ended November 13 totalled 721,900 metric tons, which was more than two times higher than it was originally estimated. At the Chicago Board of Trade, wheat futures for delivery in December jumped 3.75 cents, or 0.8%, to close the trade at $4.94 a bushel. Over the course of the previous week, US grain prices posted an increase of 0.45% compared to the previous week’s end price.

Soybeans did not manage to book substantial gains last week, as concerns over large soybean stockpiles along with forecasts for beneficial rains in South America, which are likely to water remaining dry patches in Brazil, weighed on traders’ sentiment. At the Chicago Board of Trade, soybean futures for delivery in November shrank 0.5 cents, or 0.1%, to settle at $8.595 per bushel, while on the week prices still climbed 0.55%. Meanwhile, the outlook for soybean prices remains rather depressed, as a USDA report revealed that exports were far above the estimates.

Raw sugar’s performance last week was not as impressive as it was 2 weeks prior; however, most actively-traded raw sugar futures still managed to post a weekly increase of 1.52% at the Chicago Board of Trade.

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

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