Precious Metals: Palladium dips on profit-taking
Precious metals apart from platinum halted their rally on Tuesday as a recent price increase prompted investors to lock in profits. At the same time, broadly weaker US Dollar coupled with speculation that the Fed will continue its easing measures lent some support to the commodity group. Meanwhile, traders awaited the FOMC statement due on Wednesday.
Gold retreated, being pressurized by profit-taking after previous rally. However, the downswing was restricted as hopes that the Fed will stick to its ultra-loose monetary policy continued to lift the yellow metal.
Silver dipped amid mixed global equities and soft greenback. Meanwhile, profit-booking as well as uncertainty over financial health of the Eurozone pushed the grey metal down.
Platinum was the only gainer, being boosted by the US Dollar weakness and anticipation of the Fed comments.
Palladium slid 1.05% on profit-taking. However, the white metal remained the top-performer on monthly basis, rallying 14.29% over the last four weeks.
Industrial Metals: Zinc slid despite signs of better physical demand
Industrial metals except for nickel tumbled on Tuesday ahead of FOMC statement due on Wednesday. Upbeat economic sentiment data from the Eurozone and softer greenback limited losses of the commodity group. However, positive signals failed to lift the commodity group as traders rushed to book profits after a previous price jump.
Aluminum tanked despite a slight decline in LME inventories. Stocks at LME-monitored warehouses eased 275 tonnes on Monday.
Copper declined amid profit-booking and mixed global equities. Elevated LME stocks also put additional pressure on the red metal. Inventories at LME rose 2.84% last week.
Nickel was the only gainer despite high stockpiles at LME warehouses. Nickel stocks at LME climbed 1.6% in the week ended December 7.
Zinc was bearish amid oversupply on the physical markets. Limiting losses of the metal, cancelled warrants ratio remained above 51%, suggesting an improvement in physical demand.
Energy: Heating oil gains ahead of EIA inventory report
Energy futures, excluding natural gas, rebounded on Tuesday ahead of closely-watched Fed meeting due to end on Wednesday. Market players expect the Fed to leave its loose policy unchanged. Meanwhile, traders remained cautious as OPEC is due to discuss global output quotas later in the week.
Crude oil traded higher on upbeat German confidence index reading and weaker US Dollar. Meanwhile, investors awaited EIA weekly supply report that is expected to show a 2.6-million-barrel decline in the crude oil stockpiles last week.
Brent oil jumped amid uncertainty ahead of OPEC meeting on world production quotas.
Natural gas was the only loser on warmer-than-normal weather forecasts in the US. Meanwhile, experts say that US natural gas stockpiles may have fallen by 4 billion cubic feet last week, much less than a 73-billion-cubic-feet decline in the preceding week.
Heating oil advanced ahead of the EIA inventory report due on Wednesday. However, warm US weather that weights on heating fuel demand perspectives capped gains of the commodity.
Agriculture: Coffee climbs after ICO comments
Rural commodities were mixed on Tuesday with softs moving higher and grains declining. Softer greenback was supportive for the commodity group. At the same time, USDA World Supply and Demand report sent grains lower. Meanwhile, the International Coffee Organization comments boosted coffee prices.
Wheat was the top-loser after the USDA raised global production estimate to the high end of market consensus, citing increases in China’s and Australia’s output. USDA also lifted the world’s inventory estimate by 1.6%.
Corn sank despite USDA report being not bearish on the commodity. USDA maintained its forecast for domestic stocks. However, falling demand for US supplies makes future upward revisions possible, experts claim.
Sugar inched up despite weak fundamentals. An upgrade of Brazilian Centre South cane crushing forecasts continued to weight on the sweetener.
Coffee was bullish after the International Coffee Organization slashed its global coffee harvest estimates by one million bags to 146 million bags in 2012-13 marketing year. However, coffee output still is expected to rise significantly by annualized 8.4% in 2012-13.
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
