Precious Metals: Platinum gained on global supply concerns Precocious metals rallied for the third consecutive session on Wednesday on hopes that the Fed will prolong its stimulus measures. In the recent speech, Ben Bernanke stated he is still unsatisfied with the pace of economic recovery. At the same time, the upward trend was limited by profit-taking and solid greenback.
Gold lost momentum as worries over the global economic outlook started to outweigh expectations of Fed continuing its easing measures.
Silver climbed, moving in sync with gold. The grey metal remained well-supported by a signs of robust investment demand. ETP silver holdings surged 4.8 tonnes to a record high of 19,065 metric tonnes.
Platinum advanced for the seventh session in a row, driven by supply shortage concerns. Anglo American Platinum announced it would cut 14,000 jobs in South Africa and reduce output by 400,000 ounces per year that is 7% of global production.
Palladium rose as hopes for monetary stimulus across the globe improved industrial demand outlook for the metal. However, the upswing was capped after the data showed a 8.2% decline in EU car sales in 2012.
Industrial Metals: Nickel slumps on global demand concerns
Industrial metals were bearish on Wednesday amid lingering global economic concerns. Investors shunned riskier assets and turned to safe-havens after the World Bank lowered its global growth forecast from 3% to 2.4% for 2013, citing slower-than-expected recovery of the developed economies. Meanwhile, US Dollar rallied versus its major counterparts, putting heavy pressure on base metals.
Aluminum dipped on worries that slower global expansion will weight on demand for the light metal. Elevated LME inventories also sent prices lower. LME stocks rose by 4,225 tonnes to remain near a record high of 5.24 million tonnes.
Copper sagged 0.6% amid global demand concerns and solid greenback. Adding to losses, China’s cooper imports declined 6.6% month on month in December.
Nickel dropped, being pressured by bloated LME inventories coupled with oversupply on the physical markets. Nickel stockpiles at LME added 2,574 tonnes last week to attain almost a three-year high.
Zinc declined on excessive global supplies and high LME inventories. Stocks at LME climbed by 6,075 tonnes to hover near a 17-year high of 1.2 million tonnes.
Energy: Natural gas retreats ahead of US weekly supply data
Energy futures were mixed on Wednesday amid rising concerns over global economic recovery after the Word Bank cut its world’s growth estimate from 3% to 2.4%. Uncertainty over US debt ceiling dispute also weighed on the market sentiment. Meanwhile, investors awaited the data from the US jobs and housing market due on Thursday.
Crude oil rallied after the EIA report indicated an unexpected decline in the US crude oil inventories last week. US crude oil stockpiles dropped by one million barrels last week compared to a forecast of a 2-million-barrel increase.
Brent oil inched up, tracking crude oil’s gains. However, the commodity remained under heavy pressure from global demand worries.
Natural gas halted its rally as investors locked in profits ahead of the EIA weekly inventory report due on Thursday. Meanwhile, market players continued to monitor weather forecasts to gauge heating demand potential.
Heating oil retreated after the data showed an increase in the US distillate fuel inventories last week. US stocks added 1.7 million barrels but remained near the lower limit of the average range for this period of the year.
Agriculture: Sugar plunges amid global supply surplus
Farm commodities apart from sugar advanced on Wednesday, drawing strength from the last week’s USDA Wasde report. The sentiment on grains was also underpinned by South America weather concerns. Soil moisture in Argentina, Paraguay and southern Brazil is expected to decline in the next ten days, reported World Weather Inc.
Wheat edged higher on worries that dryness in many US hard winter wheat growing regions will cut wheat crops. Wheat found further support on speculation that lower prices may attract foreign buyers and livestock producers.
Corn added 0.1% as lack of rain in South America may reduce harvest. However, the gains were restricted as US ethanol production tumbled below the forecasts last week. Moreover, US biofuel inventories climbed 2.6% to 20.36 million barrels last week.
Sugar was the only loser on combination of global supply glut and concerns that demand from South Africa and Russia may decline.
Coffee was the top-gainer despite expectations of an increase in producer selling and worries over excessive global supplies.
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 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
