Precious Metals: Silver steady after previous rally on Thursday
Precious metals ended the week on the positive note, drawing strength from long-awaited QE3 announcement made on Thursday. Adding to the positive mood of the commodity group, the greenback continued to depreciate on dismal industrial production data from the US.
Gold approached almost seven-month high, being strongly supported by stimulus program in the US and weak US Dollar.
Silver was flat after sharp rally on Thursday amid surging global equities and persistent concerns over spreading crisis in Eurozone.
Platinum skyrocketed on continuous supply concerns. On Friday, strikers at Lonmin’s Marikana mine rejected wage offer while Aquarius Platinum and Xstrata halted their operations at some South African mines amid threats of labour unrest.
Palladium prolonged its 11-day advance on brighter industrial demand prospects after the Fed launched the new round of QE. Mounting hopes that China will loosen its monetary policy also lifted the precious metal.
Industrial Metals: Copper moved higher on US easing
Industrial metals rallied after the Fed announced QE3 on Thursday. The base metals’ pack also found support on weaker greenback and hopes that China may ease its prudent monetary policy. At the same time, disappointing US industrial production data capped the upswing of the commodity group.
Aluminum jumped on hopes for better demand from the US and slightly lower inventory levels at the LME warehouses.
Copper joined the rally of the commodity group; however, the upswing was restricted by elevated inventory levels.
Nickel was the top-performer amid expectations that QE3 in the US will boost steel demand. Hopes for easing in China also pushed the nickel’s price higher.
Zinc climbed despite persistent supply glut in the market. The metal was also lifted by euphoria over easing measures in the US.
Energy: Brent oil eased up on escalated tensions in the Middle East
Energy commodities apart from natural gas gained, remaining well-supported by Fed decision to implement stimulus measures in the US. Moreover, escalated tensions in the Middle East created strong upward pressure on the commodity group.
Crude oil moved higher on easing measures in the US and supply concerns from the Middle East. Persistent tensions over Iran’s nuclear program continued to lend support for energy prices.
Brent oil climbed 0.67% on news that demonstrations in Yemen and clashes in Egypt near the US embassy created supply threat for crude oil products.
Natural gas extended previous losses on strong pressure from elevated US inventories. US natural gas stockpiles stood above five-year average for this year period last week.
Heating oil erased Thursday’s decline, tracking gains of crude and Brent oil.
Agriculture: Corn advanced on stronger demand hopes amid QE3
Rural commodities rose for the second consecutive day on Friday as QE3 in the US fuelled demand hopes for the commodity group. Broadly weaker US Dollar also created strong support for the farm commodities.
Wheat reached one-month high after ANZ Bank cut its forecast for Australian wheat crops to 20 million tons, below the USDA estimate by 6 million tons.
Corn posted the largest gain in more than two weeks on brighter demand prospects amid long-awaited quantitative easing in the US.
Sugar prolonged its rally on speculation that renewed rains in Brazil may again disrupt harvesting. Moreover, tightening supplies from the world’s second largest producer, India, also boosted the sweetener’s price.
Coffee moved higher as stimulus measures in the US are likely to strengthen demand amid lower supply levels from Latin America.
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.
