Precious Metals: Silver sank on strong greenback
Precious metals traded lower on Friday amid broadly stronger greenback after upbeat US GDP data. Adding to the negative mood of the commodity group, Jeffrey Lacker, president of the Richmond Fed stated that the monetary stimulus is not likely to provide a sufficient boost for the US economy. Jeffrey Lacker’s comments raised uncertainty over the future of easing measures in the US.
Gold was slightly lower, balancing between strong physical demand from central banks across the globe and rallying greenback.
Silver dropped on persistent weakness in the global equities. Moreover, uncertainty over the Fed stimulus coupled with strong greenback created heavy pressure on the white metal.
Platinum was the top-loser despite output forecasts’ cuts by the world largest producers. Anglo American Platinum lowered its platinum production estimate by 8% this year, citing miners’ strikes.
Palladium was bearish as persistent worries over financial instability in the eurozone continued to weight on industrial demand prospects for the metal.
Industrial Metals: Copper inched up after upbeat US GDP figure
Industrial metals apart from copper slid on Friday despite encouraging US data. US GDP expended more than expected last quarter, boosted by sharp increase in consumer spending. Meanwhile, larger-than-expected decline in the US UoM consumer sentiment sent base metals lower.
Aluminum extended previous losses, dropping by 0.83%. The metal continued to remain under heavy pressure after China reported that its output rose by annualized 9% in September.
Copper was the only gainer as positive US GDP data reassured investors that that demand for the red metal is likely to strengthen.
Nickel and Zinc shed 0.78% and 0.11% amid weak spot market activity and bloated inventories at the LME and Shanghai warehouses.
Energy: Brent oil rose on brighter demand prospects in the US
Energy futures except for natural gas advanced on Friday as positive US GDP reading boosted demand hopes. However, stronger US Dollar and on-going concerns over Spain and Greece capped the upswing of the commodity group.
Crude oil moved higher on anticipation that signs of economic recovery in the US will stimulate energy demand.
Brent oil added almost 1% on upbeat US data and persistent supply side support. Tensions between Syria and Turkey escalated. Moreover, violence started to spill over neighboring countries.
Natural gas retreated as US inventories climbed above the five-year average last week. Moreover, weather forecasts disappointed investors as mild temperatures are expected across the most parts of the US in the next weeks.
Heating oil was the top-gainer on worries that Hurricane Sandy will disrupt production in the US East Coast.
Agriculture: Corn slid amid weak demand for US supplies
Farm commodities plunged on Friday as demand for US supplies continued to shrink. Stronger US Dollar as well as concerns over a slowdown in Asia and eurozone also weighted down on rural commodities. Meanwhile, traders continued to monitor weather forecasts in the top-growing regions to gauge global supplies.
Wheat futures declined as demand for US exports dropped sharply due to availability of cheaper supplies from Russia.
Corn moved lower as strong greenback and weak demand for US grain pushed the corn futures lower.
Sugar dipped despite hopes that lower price will attract more buyers. At the same time, ample global supplies continued to weight on the sugar price.
Coffee attained seven-week low on worries that slowing global economy will pressurize world’s consumption.
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
