Precious Metals: Palladium inched down despite strong auto sales
Precious metals retreated on Wednesday as markets have already priced in expectations for easing measures by the ECB and Bank of England. Broadly stronger US Dollar added pressure on the commodity group.
Gold depreciated in choppy holiday trade on broadly stronger US Dollar and fading impact of the forthcoming ECB meeting.
Silver declined as traders await US non-farm payrolls data due on Friday. Weaker than expected labour market performance may boost hopes for QE3 hence is likely to support precious metals.
Platinum followed bearish trend on weaker equities. However, South Africa supply uncertainties limited losses of the metal.
Palladium plunged despite rising vehicle sales in the US. Soft PMI data releases in the beginning of the week continued to weight on the white metal.
Industrial Metals: Zinc fell as manufacturing activity remains weak
Industry metals moved lower in short Wednesday’s session as Spain is set to start a new austerity measure of EUR30 billion after its borrowing costs rose again.
Aluminum tumbled on lingering worries over the Eurozone’s economy. However, strong vehicle demand is likely to support the metal.
Copper dropped, following common trend of the base metals pack. At the same time the red metal may regain strength from potential fall in supplies from Peru caused by mine workers strikes.
Nickel fell despite tightening supplies as Australia imposed minerals tax. Meanwhile, traders are cautious ahead of the ECB meeting due on Thursday.
Zinc eased down as global manufacturing state remained weak in June. However, limited supplies and global easing hopes are expected to boost the metal’s price.
Energy: Heating oil rose over the week on better demand hopes
Energy commodities soared over the week on easing hopes all over the world and global supply concerns. On Wednesday, US markets were closed for holiday.
Crude oil gained 9.3% over the week as oil workers’ strikes in Norway and rising Iranian tensions created supply risk premium for the commodity.
Brent oil was bearish in the last five sessions on likelihood of easing measures in the US and Europe. Executions for further RRR cuts in China also boosted demand prospects.
Natural gas extended previous gains amid abnormally hot and dry weather in the US. Warm weather increases fuel demand for air-conditioning.
Heating oil was among gainers over the week on brighter demand prospects from the EU and China.
Agriculture: Corn surged on supply concerns
Agricultural commodities posted strong weekly gains in thin Thursday’s trade as US markets were closed for holiday. Persistent worries over harvest conditions in the US and Brazil continued to support the commodity pack.
Wheat climbed as dry and hot weather in the US escalated global supply concerns. Moreover, recent dryness in Black Sea regions weighted on the crop yields in the area thus adding to production cuts worldwide.
Corn surged on expectations for new heat wave in the US that is likely to continue hurting crops of world’s top-producer.
Sugar approached two-month high on speculation that Brazilian output will remain restricted amid rainfalls that harmed cane harvest.
Coffee appreciated as wet weather in Brazil is expected to return by the weekend and may hurt the quality of coffee beans further.
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 months forward aluminum contract on the London Metal Exchange
Copper - three months forward copper contract on the London Metal Exchange
Zinc - three months forward zinc contract on the London Metal Exchange
Nickel- three months forward nickel 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 on the LIF-NYSE LIFFE London Exchange
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
