Precious Metals: Gold surged after FOMC minutes release
Precious metals soared on Wednesday as the Fed hinted that stimulus measures are possible in the nearest future. Broadly softer US Dollar after weaker than expected existing home sales data also added to gains of the commodity group.
Gold soared 1% on speculation that the Fed will announce QE3 at the next FOMC meeting due on 12-13th of September. However, soft physical demand from India continued to cap gains of the yellow metal.
Silver extended previous gains on hopes for QE3 in the US. The white metal also found support from the industrial demand side as energy commodities and base metals were strong over the day.
Platinum approached three and a half-month high amid supply uncertainties from South Africa. Lonmin announced that it would not fire 3,000 striking workers as a threat of the new wave of violence still exists.
Palladium was the top-performer as easing measures across the globe are likely to stimulate car demand, thus increasing potential consumption of palladium.
Industrial Metals: Aluminum rose on easing hopes
Base metals except for copper surged on Wednesday after the Fed announced it is likely to embark on stimulus measures in the nearest future. Easing concerns over the Eurozone’s debt crisis also boosted the industrial metals.
Aluminum rose on hopes for easing in the US. However, elevated inventory levels as well as weak investors’ confidence weighted down on the light metal.
Copper was flat, balancing between potential increase in demand and rising global supplies. Copper output from Peru jumped by annualized 9.40% in Q2.
Nickel was the top-gainer amid building expectations for easing in the US and China. Meanwhile, nickel market continued to remain in surplus, thus restricting the metal’s rally.
Zinc moved higher amid weak US Dollar and stimulus speculation. However, weak spot demand coupled with increasing production in Peru created heavy pressure on the industrial metal.
Energy: Crude oil moved higher after US inventory data
Energy commodities were bullish on Wednesday on brighter demand prospects as the Fed may launch monetary stimulus program in the nearest future. Moreover, a tropical storm threat in the Caribbean region created additional support for energy prices.
Crude oil jumped after the Fed hinted on monetary easing. Adding to the gains of the commodity, US crude oil supplies dropped by 5.4 million barrels last week.
Brent oil moved up amid falling US inventories and persistent supply concerns from the Middle East, North Sea and Caribbean region.
Natural gas surged 1.84% after the US National Hurricane Center announced that tropical storm is moving towards Leeward Islands in the Caribbean Sea. Meanwhile, market participants also anticipated US storage data due on Thursday.
Heating oil followed an upward trend despite slight increase in US distillate fuel inventories last week. Currently, US distillate fuel supplies are below the lower limit of the average range for this period of the year.
Agriculture: Wheat slid as demand for Indian supplies strengthens
Rural commodities apart from sugar retreated on Wednesday despite broadly softer greenback and hopes for monetary stimulus in the US. Meanwhile, market players continued to monitor weather conditions in India, Brazil, Russia and the US.
Wheat halted its rally amid potential increase in Indian exports as surging global prices spurred demand for cheaper shipments from Asia.
Corn futures declined on speculation that US drought may have caused less crop damage than initially expected.
Sugar was the only gainer despite improving weather conditions in Brazil and India. Weaker US Dollar lent some support for the sweetener.
Coffee came under heavy selling pressure amid easing supply worries from Brazil and India.
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
