Precious Metals: Palladium surged amid improving vehicle sales
Precious metals were slightly higher on Wednesday despite disappointing FOMC minutes. Fed members were divided on launching more stimulating measures thus implementation of QE3 seems less likely in the next meeting in August.
Gold climbed 0.59% despite inaction of the Fed. The yellow metal found some support on easing measures in the EU and China.
Silver followed the gold’s suit, rising by 1.32%. At the same time, softer global equities and stronger US Dollar weighted down on the white metal.
Platinum eased up on speculation that closures of mines in South Africa are likely to lead to bullishness in the platinum market.
Palladium was the top-gainer on better automobile sales across the globe. Even stronger US Dollar and lack of clear decision from the Fed failed to restrict palladium’s rally.
Industrial Metals: Zinc advanced despite weak fundamentals
Industry metals, excluding aluminum, advanced on Wednesday despite stronger greenback and global demand concerns. Adding pressure on the commodity pack, Fed officials were indecisive in regards to the next round of QE.
Aluminum was the only loser on continuous closures of mines amid low prices. United Co Rusal, world’s largest aluminum producer, plans to halt about 70,000 MT of output at Siberian smelting line.
Copper erased some of the previous losses caused by weak China’s consumption. Slight optimism after Spain announced more austerity measures lifted copper.
Nickel rose despite production cuts and weak demand. CaNickel Mining Ltd reported that the firm will continue to halt operations at Bucko Lake Nickel mine.
Zinc gained 1.2% at LME, remaining weak amid deteriorating industrial activity and stronger US Dollar. Recent China’s steps towards boosting liquidity continued to support industry metals.
Energy: Heating oil rose on lower US inventories
Energy commodities surged on Wednesday despite stronger US Dollar and continuous global growth concerns. EIA report release and hot weather forecasts in the US provided support for the commodity group.
Crude oil soared after EIA reported that US crude oil inventories declined much more than expected last week. However, crude oil came under pressure as worries over supply disruptions from Norway eased.
Brent oil moved higher, being well-supported by recently launched embargo on Iranian oil exports. At the same time, the upswing was capped by persistent global demand fears.
Natural gas skyrocketed on abnormally warm weather forecasts in the US. Meanwhile, traders are cautious ahead of the EIA supply report due on Thursday.
Heating oil eased up after EIA report indicated smaller than expected increase in the US distillate fuel inventories. Currently, distillate fuel supplies are below the lower limit of average range for this time of the year.
Agriculture: Coffee moved higher on adverse weather in Brazil
Farm commodities except for corn rallied on Wednesday on crop-harming weather in the US, Brazil and India. Moreover, commodity group faced an increased volatility as investors were nervous, awaiting USDA report released during the US morning session on Wednesday.
Wheat rose as dry and hot weather is likely to persist in the US. Moreover, wheat caught moment after USDA cut global wheat production outlook, citing worse harvest in Russia, China and Kazakhstan.
Corn futures declined after USDA stated that lower supplies and inflated prices are likely to result in steep tumble in corn demand for livestock feed.
Sugar moved up amid unfavorable weather in Brazil and India. Heavy rains in Brazil and poor monsoon season in India lingered world’s supplies concerns.
Coffee followed bullish trend as weather conditions in Brazil may continue to impact quality of coffee beans.
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 wheat 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
