Precious Metals: Palladium soared on stimulus hopes
Precious metals rallied on Tuesday amid building hopes for monetary easing by the Fed, ECB and POBC. Meanwhile, traders awaited a FOMC minutes release due on Wednesday; the minutes are likely to be the major driver for the commodity group in the next sessions.
Gold reached more than three-month high on hopes for easing by global central banks and weaker US Dollar. At the same time, soft physical demand from India continued to depress the yellow metal’s price.
Silver moved in tandem with gold, advancing by 1.83%. Soft greenback and global easing speculation lifted the white metal.
Platinum was hovering near the highest level in two months as supply uncertainties from South Africa persisted.
Palladium attained almost three-month high on hopes for monetary stimulus in the US and China. Additionally, strength of the base metals pack lent support for palladium.
Industrial Metals: Zinc rose amid Eurozone’s optimism
Industrial metals advanced on Tuesday on optimism over the Eurozone and hopes for easing in the US and China. Experts claim that the EU leaders are likely to grant Greece an extension of period needed to adjust budget program.
Aluminum gained 1.63% despite rising stockpiles and weak confidence. The light metals found support on positive headlines from the Eurozone and US.
Copper rose to four-week high on weaker US Dollar and hopes for global easing. Adding to the positive mood of the commodity, China’s city, Chongqing, may invest USD236 billion in development of major industries.
Nickel rose by 1.77% ahead of the US existing home sales data due on Wednesday. However, the upswing was capped as global nickel markets continued to remain in surplus.
Zinc jumped on improved risk-sentiment after successful Spain’s debt sale. At the same time, weak demand created notable pressure on the metal.
Energy: Heating oil soared ahead of US inventory data
Energy commodities apart from natural gas surged on Tuesday on expectations that the ECB will act to resolve the debt crisis in the Eurozone. Moreover, supply concerns from the Caribbean also boosted the commodity group.
Crude oil climbed on lower risk-aversion among market players amid positive news from the single currency union. Threat of tropical storm in the Caribbean also added support for the commodity.
Brent oil jumped as supply concerns from the Middle East and North Sea sent Brent oil futures up.
Natural gas was the only loser amid concerns over ample supplies in the US. Total US supplies remained 13.5% above the five-year average level last week, according to EIA.
Heating oil was the best-performer, rallying 1% ahead of the US inventory data due on Wednesday. Low US stockpiles coupled with supply uncertainties provided strong support for the commodity.
Agriculture: Coffee sank on rising Latin American exports
Agricultural commodities were mixed on Tuesday, with grains extending the rally and sugar and coffee declining further. Over the day, market participants remained focused at weather conditions in the US, Russia, Brazil and India.
Wheat surged as lack of rain in Russia and EU continued to threaten crops. Meanwhile, poor wheat crops in the EU and Russia are likely to boost demand for US exports.
Corn jumped as participants of US Professional Farmer Midwest Crop Tour announced that crop yields are set to fall in both the eastern and western Corn Belt.
Sugar slumped further on favorable weather conditions in Brazil. However, threat of return of El Nino weather pattern in India restricted the downswing.
Coffee dropped on news that Latin American coffee shipments surged by annualized 50% in July.
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 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
