Precious Metals: Silver rose on weak US data
Precious metals advanced on Wednesday, following dismal economic data releases from the US. US retail sales and PPI dropped more than expected last month, adding to fears that the country’s economy may into recession, especially after tax hikes. At the same time, mounting hopes that the Fed may introduce a new bond-buying program in 2013 buoyed the commodity group.
Gold traded higher on disappointing signals from the US economy. However, broadly stronger US Dollar and uncertainty over Greek bailout bid capped gains in the yellow metal.
Silver rallied despite weak global equities and solid greenback. The grey metal was lifted by speculation that the Fed will prolong its bond-purchasing program next year.
Platinum and Palladium remained well-supported by global supply concerns. Global output of platinum and palladium is expected to plunge 9.9% and 11% this year, driving the market into deficit in 2012.
Industrial Metals: Copper slides as China’s October output rises 8.6%
Industrial metals were mixed on Wednesday amid weak numbers from the US and lingering concerns over whether Greece will receive the next bailout installment timely. Meanwhile, investors were also cautious ahead of Chinese leadership change due on Thursday.
Aluminum was the top-loser, halting two-day rally as support from brighter demand prospects in China faded. Disappointing US data coupled with concerns over looming fiscal cliff weighted on the light metal.
Copper retreated amid heavy supply-side pressure. China’s copper output soared 8.6% in October, sending total production in the first ten months to a record level of 4.94 million tons.
Nickel rebounded despite global growth fears. The metal is likely to remain range-bound, balancing between export limits in Indonesia and lackluster global demand .
Zinc prolonged a rally as 60,700 tonnes were booked to be withdrawn from LME-monitored warehouses, weighting on global supplies.
Energy: Brent oil surged; Middle East conflict in focus
Energy futures jumped on Wednesday despite bleak global outlook and solid greenback. Meanwhile, escalated tensions in the Middle East pushed the commodity group higher. However, market players remained cautious ahead of the EIA inventory report due on Thursday.
Crude oil rallied ahead of the US stockpiles data due on Thursday. Crude oil inventories are expected to have climbed by 2.5 million barrels last week.
Brent oil soared on potential supply disruptions in the Middle East, especially as Iranian oil embargo cuts OPEC production. Israeli threatened that attack on Hama’s commander was not the end of the conflict in Gaza and more strikes would follow.
Natural gas moved higher ahead of the closely watched inventory report due on Thursday. Experts predict a decline of 13 billion cubic feet due to beginning of the heating season.
Heating oil jumped despite strong US Dollar and dismal US retail sales data. A start of the US winter heating season also lifted the commodity futures.
Agriculture: Corn rose amid bottom fishing
Rural commodities were mixed on Wednesday amid solid greenback and bottom fishing. Meanwhile, weak demand for the US exports coupled with fears over global economic slowdown created a heavy pressure on the commodity group.
Wheat extended previous losses on rallying US Dollar. However, the grain may find support on further cuts of global supply estimates. Dan Basse President of AgResource Co announced that global wheat output is likely to miss the USDA forecast of 651.4 million MT.
Corn climbed on bottom fishing. Moreover, hopes that lower prices will attract livestock producers added to gains.
Sugar declined on bearish Unica’s crop update last week. Unica stated that sugar production in Brazil’s Center South-region skyrocketed 73% in the second half of October.
Coffee bounced off recent lows as traders returned to markets to look for cheap valuations. However, easing concerns over Brazilian harvest capped gains in coffee 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
