Precious Metals: Palladium rose on Fed easing hopes
Precious metals were mixed on Wednesday ahead of the long-awaited FOMC meeting results due on Thursday. The German’s Constitutional Court decision to back up the euro area bailout fund sent the US Dollar lower, thus supporting the commodity group.
Gold eased down as investors started to cash out from the market after the gold reached six-month high in the US morning trading hours.
Silver, being more volatile than gold, dropped 0.72% on profit-taking and anticipation of the FOMC meeting’s outcome. Stronger global equities coupled with softer greenback limited losses of the white metal.
Platinum soared on global supply concerns. Anglo American is set to shut down some of its South African mines amid spreading labour unrest.
Palladium gained 1.10% on speculation that the Fed and POBC will loosen their monetary policies.
Industrial Metals: Zinc lost momentum ahead of FOMC statement
Base metals apart from nickel inched up on Wednesday on mounting expectations that the Fed will ease its monetary policy. The German Constitutional Court’s decision and Chinese Premier’s comments also boosted the industrial metals pack.
Aluminum was the top-gainer on lower inventories at LME warehouses and hopes for stronger demand from China and US.
Copper was almost flat, balancing between profit-taking and global growth concerns on negative headlines from China.
Nickel was the only loser on weaker lead demand and persistent supply glut. However, broadly weaker US Dollar restricted the downside of the base metal.
Zinc was steady, losing momentum after previous sharp gains as traders remained cautious ahead of the FOMC meeting results.
Energy: Heating oil rose despite higher US inventories
Energy commodities except for crude oil climbed on Wednesday following the US supply report and positive news from the Eurozone. However, higher output levels by OPEC continued to weight down on the commodity group.
Crude oil was slightly lower after US supply numbers for the last week. The EIA reported that US crude oil inventories unexpectedly increased by 2 million barrels last week.
Brent oil moved higher on reports that the US ambassador in Libya was killed and three other embassy members faced a rocket attack.
Natural gas surged ahead of the US supply data due on Thursday.Meanwhile, market participates remained focused on the US weather forecasts that may provide indications of natural gas demand prospects.
Heating oil climbed almost 1% despite a 1.2 million-barrel increase in the US distillate fuel inventories last week.
Agriculture: Coffee eased down amid favorable weather in Colombia
Rural commodities were mixed on Wednesday amid broadly weaker greenback and improving weather conditions in the US and Brazil. Meanwhile, escalated cautiousness in the markets ahead of the FOMC statement created heavy pressure on agricultural commodities.
Wheat halted three-day decline after the USDA cut the global output forecast by 0.6% from the last month’s estimate, citing severe drought in Russia.
Corn fell as USDA raised its forecast of the US and global inventories as weaker demand offsets crop losses caused by unfavorable weather conditions.
Sugar reached thee-week high on Indian supply concerns. India’s sugar surplus is expected to drop by annualized 57% this year, thus tightening global supplies.
Coffee inched down as drier weather in Colombia is likely to boost crops to 8.2 million bags this year. However, Colombian crops still expected to miss government’s forecast of 8.5 million bags.
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
