Precious Metals: Palladium dipped on bleak demand prospects
Precious metals were mixed on Tuesday, with gold and silver rebounding and palladium and platinum tumbling. Strong US Dollar, profit taking and fading boost from the US stimulus measures all created heavy selling pressure on the commodity group.
Gold advanced despite appreciation in US Dollar amid upbeat current account data. Meanwhile, traders locked in profits after previous rally of the yellow metal.
Silver gained slightly despite weak global stock markets and solid greenback. Positive US data showing that the national current account deficit narrowed more than expected in Q2 pushed the US Dollar up, thus sending the white metal lower.
Platinum plunged on news that striking miners at South African Lonmin mine accepted a wage offer, thus reducing supply-risk premium for the metal.
Palladium sank on escalated geopolitical tensions between China and Japan that may weight on industrial demand prospects for the metal.
Industrial Metals: Zinc advanced despite greenback’s pressure
Base metals were mixed on Tuesday amid broadly stronger US Dollar and profit-taking after US stimulus-fueled rally. Meanwhile, weak state of the US manufacturing activity continued to push industrial metals lower.
Aluminum prolonged its slump as financial instability in Eurozone continued to weight on market sentiment.
Copper swung from losses to gains on positive US current account data. However, softening manufacturing activity in the US and China’s growth fears capped the paired the gains of the re metal.
Nickel erased previous gains, falling by 2.19% on stronger greenback and oversupply in the market.
Zinc was the top-gainer despite fading boost from the Fed stimulus measures. Persistent supply glut also restrained further upward move of the metal.
Energy: Heating oil slid ahead of the US inventory report
Energy commodities tumbled on Tuesday on global growth fears and weakening manufacturing activity in the US. The New York manufacturing activity dropped unexpectedly this month, attaining three-year low. Moreover, solid greenback added pressure on the commodity group.
Crude oil plunged as uncertainty over Spain’s bailout and contracting manufacturing activity in the US pressurized the commodity price.
Brent oil retreated on tensions between China and Japan that may decrease energy demand. However, attacks on US embassies in the Middle East continued to lend supply-side support for the commodity.
Natural gas extended previous losses amid cooler weather forecasts and high US inventory levels. The most of the US territory is expected to face cooler temperatures in the next six to ten days, thus weighting on conditioning demand.
Heating oil moved lower ahead of the US distillate fuel inventory data due on Wednesday. Meanwhile, global growth concerns dragged the commodity lower.
Agriculture: Coffee inched up despite higher global supplies
Rural commodities apart from coffee plunged on Tuesday amid stronger US Dollar and favorable weather conditions in the world top growing regions. Moreover, recent rally in prices encouraged producers to sell more supplies, sending farm commodities lower.
Wheat sank as planting of the US winter-wheat crop accelerated due to dry weather. Adding pressure on the commodity, Australia is likely to witness more rains that may boost output prospects.
Corn futures declined; however, the downswing was restricted by speculation that recent slump in price would attract importers amid falling global supplies.
Sugar continued to fall as Australia, the world’s third largest producer, upgraded its output forecast, citing better yields and bigger planting areas.
Coffee recovered some losses despite increased supplies as farmers were motivated to sell more coffee due to higher prices.
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
