Precious Metals: Silver slid despite hopes for Fed stimulus
Precious metals were mixed on Monday, with platinum and palladium extending previous gains and gold and silver retreating. Mounting hopes that the Fed will ease its monetary policy failed to lift gold and silver. Meanwhile, market players were cautious ahead of the German Constitutional Court decision on whether to suspend the ESM.
Gold retreated from recent highs despite speculation that US and China will embark on easing measures in the nearest future. Broadly stronger US Dollar created pressure on the yellow metal.
Silver halted two-day rally amid mixed global equities and solid greenback. Even hopes for easing in the US failed to support the white metal.
Platinum moved higher despite eased supply concerns after Lonmin agreed to start wage negotiations with its workers at Marikana platinum mine.
Palladium soared on brighter demand prospects after inspiring Chinese vehicle sales data. China’s car sales surged 8% in August.
Industrial Metals: Copper jumped on China easing hopes
Industrial metals prolonged their rally on Monday on escalated hopes for easing measures in the US and China. Meanwhile, market participants anticipated an outcome of the German Constitutional Court hearing regarding the ESM existence.
Aluminum climbed on hopes that recent negative headlines from the US and China will force the central banks to implement stimulus measures.
Copper rallied to three-month high on potential increase in demand as China approved infrastructural projects worth more than USD126 billion.
Nickel added 1.67% despite consumption worries amid possible labour unrest at Arcelor Mittal’s US steel.
Zinc was the top-gainer despite persistent supply glut in the market and stronger US Dollar.
Energy: Brent oil eased up despite Saudi Arabia’s comments
Energy commodities advanced on Monday amid continuous hopes for stimulus in the US and China. Sending the commodity group lower, Saudi Arabia’s oil minister announced that high oil prices were a global concern and were not justified.
Crude oil ended the day with a mild gain, balancing between US and China’s stimulus speculation and reports that high oil prices are not fully supported by fundamentals. At the same time, strong greenback capped the upswing.
Brent oil inched up despite increased cautiousness in the market ahead of the German Constitutional Court decision and Fed meeting. Market participants also awaited US inventory report due on Wednesday.
Natural gas skyrocketed on below-normal temperatures forecasts in the US Midwest and above-normal temperatures in the US coastal parts.
Heating oil moved in tandem with Brent and crude oil, gaining 0.57% ahead of the US inventory report due on Wednesday.
Agriculture: Corn tumbled on faster harvesting in the US
Farm commodities were mixed, with sugar and coffee rebounding and grains dropping. Broadly stronger US Dollar coupled with better weather conditions in the US created heavy pressure on agricultural commodities.
Wheat futures declined despite crop forecasts’ cuts. Rabobank lowered Australian wheat output to 22.79 million MT in 2012-2013, citing unfavorable weather conditions in July.
Corn was the worst-performer after USDA reported that dry weather last week accelerated harvesting. USDA stated that about 15% of crops were harvested last week compared to 10% in the previous week.
Sugar eased up on speculation that demand is recovering as money managers are increasing bets on low prices. Moreover, sugar surplus in India is likely to contract next season.
Coffee was the top-gainer on speculation that global supplies may decline as harvests in Colombia and Brazil are expected to be lower than forecast this year.
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
