Precious Metals: Platinum spiked on South African supply concerns
Precious metals advanced on Tuesday after Moody’s warmed the US that it may cut the national ‘Aaa’ rating in case the policymakers do not take actions to lower the US debt level in the beginning of 2013. Broadly weaker US Dollar coupled with anticipation of the FOMC meeting results due on Thursday also supported the commodity group.
Gold moved higher on negative headlines from the US. Meanwhile, investors awaited Germany’s decision on the ECB bond purchasing program.
Silver was bullish amid strong global equities and weak greenback. Mounting hopes that the US will embark on asset-purchasing program also lifted the white metal.
Platinum rallied after the African National Congress called for strikes in South Africa’s mining sector, lingering worries over labour unrest in the country.
Palladium continued the longest upswing since February 2008, following strength of the base metals. However, weaker-than-expected growth of car sales in China capped the upward trend of the metal.
Industrial Metals: Nickel moved higher on hopes for China’s easing
Industrial metals rallied on hopes that the Fed and POBC will loosen their monetary policies, thus fuelling demand for the commodity group. On Tuesday, market participants remained cautious ahead of the German Constitutional Court decision due on Wednesday and the FOMC meeting due on Thursday.
Aluminum advanced on hopes for stronger China’s demand. Lower inventories at the LME warehouses also sent the light metal higher.
Copper prolonged its rally on series of subsidy reports by China’s government. Supporting the red metal, China’s Premier Wen Jiabao said that the country has a room to use monetary and fiscal reforms to boost growth.
Nickel went up despite persistent surplus in the market. Speculation that China will ease its monetary policy added to gains of the metal.
Zinc inched up on weaker US Dollar. However, oversupply in the market continued to limit the upward move of the metal.
Energy: Natural gas soared ahead of the US inventory report
Energy commodities inched up on Tuesday amid speculation that the US and China will implement stimulus measures. However, higher output from OPEC and recovering US production after hurricane in the Gulf of Mexico created heavy pressure on the commodity group.
Crude oil advanced on brighter demand prospects from the US and China. Capping the upswing of the commodity, OPEC reported that oil production rose by 260,000 barrels per day last month.
Brent oil was slightly higher amid stimulus hopes and weaker greenback. At the same time, possibility of strategic oil reserves release pushed the commodity price down.
Natural gas attained four-week high as 10% of the natural gas production in the Gulf of Mexico remained shut because of recent hurricane. Meanwhile, traders also await US stockpiles report due on Thursday.
Heating oil rose ahead of the US weekly inventory report due on Wednesday.
Agriculture: Corn tumbled on faster harvesting in the US
Rural commodities were mixed on Tuesday, with sugar and coffee extending previous gains and grains falling further. Broadly weaker US Dollar and expectations for easing measures in the US and China supported the commodity group.
Wheat slid for the second day in a row as rains in the southern US Great Plains created favorable conditions for winter varieties.
Corn was the top-loser despite poor condition of the US crops. USDA reported that 52% of the crops were in poor and very poor condition.
Sugar managed to climb despite rising output in Brazil as dry weather in the top-growing regions speeds up sugar cane harvesting. Adding pressure on the sweeter, Rabobank raised its global surplus forecast by 13% for October.
Coffee posted the biggest jump since 2010 on speculation that supplies from Brazil and Colombia are tightening.
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
