Precious Metals Fall in Red

Gold finished the previous week ending 8 March by rising higher in value for the third consecutive session. Traders weakened their forecast for the soon US rate hike amid some comments from Federal Reserve Chair Janet Yellen earlier. According to the Fed’s testimony to the Senate Banking Committee on Tuesday, the current economic conditions in US are unlikely to trigger the interest in raising rates at least the next couple of FOMC meetings. Yellen added that prior the rate hike inflation and wages must rise, despite the recent improvement in the labor market. Futures for April delivery on Comex hiked 0.25% or $3.00, settling at $1,213.10 per troy ounce on Friday close. Gold lost 5.18% of its value in the month of February, following a January 8% gain.

Silver May future delivery lost 0.4%, or 6.6 cents, on Friday and settled at $16.55 per troy ounce by the end of Friday session, whereas the weekly value of the metal rose 1.97%, or 31.8 cents, tracking gains of the gold. On the monthly basis, silver futures dipped 59.2 cents, or 3.8%.

Palladium was down on Friday amid US strong jobs data. The metal was trading at a price of $820/825, $2.50 lower on Friday. US total non- farm employment increased by 295.000 in the month of February, while unemployment edged down 5.5% from 5.7%, significantly better than the forecast.

Platinum also declined above six year lows and traded at $1.161, losing $14. The metal has been dragged to the lows together with gold.

US Economic Data Puts Tension on Base metals

Aluminum lost some 0.9% to $1.782 since the likelihood of the Fed hiking rates was raised amid the growing economic pace in US, leading the Greenback to rise higher. The Dollar index reached 97.73, acting like a headwind for the metals.

Copper futures for May delivery declined 0.11%, or 0.3 cents, on Friday, ending at $2.691 per pound. In the month of February, the metal surged 7.95%, or 21.2 cents. Red metal was supported by speculations of Chinese policymakers as they plan to introduce a fresh stimulus program in order to spur economic growth. Asia is the world’s largest consumer of copper, accounting for 40% last year. As a matter of fact, on Saturday 7, the Bank of China cut the benchmark interest rate by 0.25% to 5.35%.

Nickel was put in a mixed day at the end of the week where the metal closed at $14.395. The market was hit by the unemployment report from US, showing a better than expected data.

Zinc lost $1 and traded at $2.019, while stocks continue to shrink to 547.075 tonnes, down 4.725 tonnes.

Lead slipped to $1.799, down $21. Supplies increased by 75 tonnes, lifting stocks to 213.950 tonnes.

Natural Gas Slide Amid Warn Weather Forecast

Crude oil futures gained on Friday, reaching a record first monthly gain in seven months following the production cuts by drillers in the US and global companies, alleviating a glut in supplies. Crude oil for April delivery on New York Mercantile Exchange surged $1.59, or 3.3%, ending the week at $49.76 per barrel. On a weekly basis, oil futures slid $1.29, following a second consecutive weekly loss. Despite, the month of February ended up with a gain of $1.68, or 0.91%. According to Industry research group Baker Hughes, the number of oil drilling rigs in US declined to 986, down 33 last week, the lowest since June 2011. Traders and analysts are paying close attention to the shrinking rig count as it may sign to an eventual reduction of crude flowing to the market.

Natural gas futures ended at a two– year low on Friday, as warmer weather across the majority of the US is expected in March. On the New York Mercantile Exchange, gas for April delivery declined $2.684 per mBtu, lowest level since February 13, before ending up 1.4 cents, or 0.52%, $2.711. Futures found some support at $2.680 per mBtu, and resistance at $2.888, February 26 high. Natural gas storage fell 5.77%, or 16.5 cents in US. In comparison with the last spring, supplies were 55% below an average of five– years.

Heating oil for April delivery added 2.88% during the week to settle at $1.965 a gallon by Friday trade close.

USDA Wasde Estimated Inventories Rise

Wheat futures for May delivery on the Chicago Mercantile Exchange traded at $4.824 per bushel on Friday by the session close. Generally, the strong US Dollar weighed on the commodity as the Dollar index, measuring the greenback against a basket of six currencies, gained 1.39% to 97.74 on Friday, highest level in September 2003. The stronger US currency reduces investors interest to buy US wheat as it becomes more expensive. On a weekly– basis, May contract fell 5.81%, or 31.5 cents, the greatest weekly lost since September.

Soybean futures for May delivery fell toward $9.7660 per bushel on Friday, February 12 lowest point, over the concerns of Brazilian export prospects ease. As a matter of fact, the two– week strike by some Brazilian truck drivers looks like to be coming to an end. During the week, soybean contract for May delivery slumped 44.74 cents, the first loss in five weeks. Brazil is the largest soybean exporter and holds a competition with the US for business on the market.

Corn for May delivery dived or 4.4 cents on Friday, closing at $3.8600 per bushel. Corn value touched an intraday low of $3.832, the February 26 level amid wheat weakness. Corn and wheat prices are correlated as both are used as animal feed. On a weekly– basis, corn contracted 6.76 cents, for May delivery.

Coffee experienced some bounce as asian roasters are coming to the market in order to take advantage of the lower levels. Robusta coffee for May delivery fell 1.2%, or $23, to $1.858 per tonne. Arabica May futures rose 3.35 cents, or 2.6% on Friday.

EXPLANATIONS

Gold — COMEX active contracted (USD/t o.z.)

Coffee — benchmark Arabica coffee active contract on the NYB-ICE Futures Exchange

Soybeans — active contract on the Chicago Board of Trade (cents/bu)

S&P GSCI Precious Metals Total Return Index — commodity group subindex composed of gold and silver; the index reflects return on underlying commodity futures price movement

S&P GSCI Industrial Metals Total Return Index — commodity group subindex composed of futures contracts on aluminium, copper, lead, nickel and zinc

S&P GSCI Energy Total Return Index — commodity group subindex composed of futures contracts on crude oil, Brent oil, RBOB gas, heating oil, gas oil and natural gas

S&P GSCI Agriculture Total Return Index — commodity group subindex composed of futures contracts on wheat, red wheat, corn, soybeans, cotton, sugar, coffee and cocoa

Long-term price forecasts — aggregated price forecasts based on predictions of 20 international banks forecasts

USDA Wasde Total Estimated Inventories (Today) — current level of inventories of wheat in 1000 MT, corn in 1000 MT, soybeans in million bushels and green coffee in 1000 bags