Tag Archives: market news

Gold inches up, headed for third weekly gain

26 Jul

Gold edged up on Friday and was headed for its third straight weekly gain, helped by a weaker dollar and hopes of a prolonged period of easy monetary policy.

FUNDAMENTALS

* Spot gold had climbed 0.07 percent to USD1,333.95 an ounce by 0014 GMT, after gaining about 1 percent in the previous session.

* US data showed that new claims for jobless benefits edged higher last week, but remained within a range that suggests the labour market’s recovery is on track.

* Investors fear that strong US economic numbers would prompt the Federal Reserve to start tapering its stimulus measures sooner rather than later.

* China’s gold demand could hit a record 1,000 tonnes this year, the World Gold Council said on Thursday, which means it would overtake India as the world’s biggest bullion consumer.

* Gold premiums in India jumped to USD 20 an ounce over London spot prices on Thursday due to short supplies even as traders, looking to stock up for festivals, waited for prices to fall further from their highest level in more than a month.

* Gold mining companies are expected to cut their gold hedging position by 20 tonnes on a net basis in 2013 even though the price of bullion has fallen sharply, precious metals consultancy Thomson Reuters GFMS said on Thursday.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.26 percent to 927.36 tonnes on Thursday.

* Goldcorp Inc , the world’s largest gold miner by market capitalisation, posted weaker-than-expected second quarter results on Thursday, hit by a sharp drop in the gold price and a USD 2 billion non-cash impairment charge.

MARKET NEWS

* The dollar languished at one-month lows against a basket of major currencies on Friday, having suffered a setback overnight as investors turned cautious ahead of next week’s Fed policy meeting.

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Gold Futures Poised to Rise Next Week: Survey

13 Jul

On the Comex, gold for delivery on August 13 was seen closing at $1,284.15/oz, a gain of $4.25 or 0.33% on Friday.The futures are closed for weekend. Silver on the Comex for delivery on September 13 closed Friday at $19.895/oz, registering a loss of $0.061 or 0.31%.

mcx gold

MUMBAI : If the survey results of Bloomberg are anything to go by, gold futures are poised to climb next week. Nineteen analysts surveyed by Bloomberg think that gold futures may rise next week even as nine analysts were bearish and three neutral.

Gold as of last quarter has lost 23% y/y and witnessed acceleration in declines as US Federal Reserve Chairman Ben Bernanke hinted that the Quantitative Easing measures announced by Fed would see a tapering starting second half of this year.

However, this week the Federal Open Market Committee minutes for June released has showed a bias towards continuing with QE measures. Ben Bernanke himself said that the monetary policy would remain accommodative for the foreseeable time as the revival in economy is fragile.

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This created a rally in futures as prices breached the $1280 mark, an area of significant resistance.

“With the Fed comments, with the increased cost of funding a short position and some recalibration in peoples’ thinking about the end of quantitative easing, the onus is really on the bears now,” said Ross Norman, chief executive officer of Sharps Pixley Ltd to Bloomberg.

“Physical demand is supporting the market very nicely,” he added.

On the Comex, gold for delivery on August 13 was seen closing at $1,284.15/oz, a gain of $4.25 or 0.33% on Friday.The futures are closed for weekend. Silver on the Comex for delivery on September 13 closed Friday at $19.895/oz, registering a loss of $0.061 or 0.31%.

Meanwhile, with the decline in prices, physical demand remained robust in China even as with import curbs in place, Indian merchants are seeking sales controls fearing a shortage.

In India H2, 2013 is marked by festivities like Diwali and Dhanteras, two Hindu festivals which would see enhanced gold buying.

“This is just a temporary measure, but if we don’t follow through with this, there may be a situation when jewellers don’t have any gold to sell. The government and the Reserve Bank of India have already restricted gold imports,” said Vikas Chudasama, director general, All India Gems and Jewellery Trade Federation to the Indian Express.

“This is a request from the federation to all our member jewellers as it will help bring down imports over the next few months and so ease pressure on the current account deficit (CAD),” he noted.

India recently hiked the import duty on gold to 8% and RBI too put in restrictions on import funding by banks. Indian Rupee has dipped substantially and to record lows even as widening CAD is giving sleepless nights to policy makers.

The gold curb measures ‘helped’ the gold imports by India to come down substantially as latest data say.

“Import of gold and silver is understood to have declined substantially to $2-2.5 billion in June, much below the $8.39 billion imported in May, and over $7 billion in April,” a senior government official said and was quoted recently by the Indian Express as saying.

June imports of Gold have dipped to a paltry 28 tons when compared to 162 tons in May. Data says that imports of gold to Gujarat, a major consuming centre, dipped to 3.73 tons in June against the 37.61 tons registered in May as per the air cargo complex data.

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Gold Heads for Biggest Weekly Gain in Two Years

12 Jul

Federal Reserve Chairman Ben Bernanke said on Wednesday that the overall message from the central bank was that a “highly accommodative policy is needed for the foreseeable future”.

mcx gold

Gold rose for a fifth session on Friday, on track for its biggest weekly gain in nearly two years on easing fears of an early end to US monetary stimulus that as boosted bullion’s appeal as a hedge against inflation.

Fundamentals

Spot gold had climbed 0.1 percent to USD 1,286.21 an ounce by 0016 GMT. It touched close to USD 1,300 on Thursday, its highest in three weeks.

Bullion has gained 5 percent so far this week, on course for its largest weekly climb since October 2011.

Comex gold and silver were also trading near multi-week highs hit on Thursday.

Federal Reserve Chairman Ben Bernanke said on Wednesday that the overall message from the central bank was that a “highly accommodative policy is needed for the foreseeable future”.

Financial markets, which had tumbled after Bernanke said last month that the Fed’s USD 85 billion in monthly bond purchases could be scaled back this year, jumped on Thursday with the Dow and S&P 500 indices hitting all-time closing highs.

Gold, still down nearly 25 percent this year, could face further headwinds as some investors jump to rallying stocks, dumping holdings in gold-backed exchange traded funds.

Investors pulled USD 998.8 million from commodities and precious metals funds, up from withdrawals of USD 92.6 million the prior week, data from Thomson Reuters’ Lipper service showed on Thursday.

Gold traders in India, the world’s biggest buyer of the metal, refrained from fresh purchases as prices climbed to their highest level in more than two weeks.

Market News

The US dollar fell to multi-week lows against the euro and yen on Thursday as traders scaled back expectations the Fed would slow its asset purchases in the coming months.

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Oil edges down to $103/bbl, supply worry eases

9 Jul

NYMEX crude for August delivery was down 16 cents at USD 102.98 a barrel by 0018 GMT, after settling down 8 cents at USD 103.14 on Monday. It touched a 14-month high of USD 104.12 on Monday.

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US crude futures retreated to just below USD 103 a barrel on Tuesday, pressured by the return of a Libyan oilfield and Iraqi pipeline that eased concerns about global oil supplies.

Also Read : checkmatetrades

Fundamentals

NYMEX crude for August delivery was down 16 cents at USD 102.98 a barrel by 0018 GMT, after settling down 8 cents at USD 103.14 on Monday. It touched a 14-month high of USD 104.12 on Monday.

London Brent crude for August delivery was down 34 cents at USD 107.09 a barrel, after settling down 29 cents.

Libya’s major Sharara oilfield will resume operations after an agreement was reached with the armed group that shut it down last month, a senior Libyan oil source said on Monday.

A pipeline from Iraq to the Turkish port of Ceyhan will also resume operations in two to three days following an interruption caused by a leak, two sources in Iraq’s state-run North Oil Company (NOC) said on Monday.

Clashes in Egypt that left at least 51 people dead heightened geopolitical risk, but there has been no impact to ports and shipping through the Suez Canal.

Egypt will hold new parliamentary elections once amendments to its suspended constitution are approved in a referendum, the interim head of state decreed on Monday, setting out a time frame that could see a legislative vote in about six months.

US commercial crude oil stocks likely fell by 3.3 million barrels last week, a Reuters poll showed on Monday. Distillate stocks likely rose by 1.3 million barrels, while gasoline stocks were seen up 1.2 million barrels.

Market News

The Standard & Poor’s 500 Index rose 0.53 percent on Monday, edging closer to its all-time high set in May.

The dollar paused in its rally as investors bought beaten-down currencies such as the Australian dollar on Tuesday, although its broad uptrend is seen intact as the market tries to position for when the US Federal Reserve will start to slow its stimulus.

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MCX Gold, MCX Silver to witness short covering this week; MCX Crude Oil, MCX Copper bearish

1 Jul

Gold and silver on India’s Multi Commodities Exchange crashed to lower levels last week. Crude oil gained on high demand from investors while copper was still on the verge of a downfall.MCX Gold, MCX Silver, MCX Crude Oil, MCX Copper

Algorithmic trading with mechanical sell positions promoted steep fall in gold and silver prices. Persisting slow down in Chinese economy and sad state of affairs in European economy ensured the commodities remained in bearish zone. High demand from importers kept crude oil in positive territory.

MCX gold for August delivery may trade sideways to down this week. Short covering is expected at lower levels. Support: 24800, 24000; Resistance: 26300, 27100

MCX Gold traded in the range of 24830-27000 last week. The commodity remained in bearish territory as U.S gold crashed to $1183 per oz.

Release on U.S Nonfarm pay rolls, Weekly Jobless Claims, Trade Balance and Spending may put pressure on gold prices in the global markets.

MCX silver for September delivery may trade bearish this week. Sell on rise is advised to the traders. Support: 39000, 38000; Resistance: 41700, 41999

Last week, MCX silver traded in the range of 38536-41334. The commodity crashed tracking gold prices. COMEX silver also witnessed a bear rally to lower levels.

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Chinese HSBC Services PMI and Euro zone retail sales data is likely to announce this week. Worries over Chinese economy may put pressure on silver prices.

MCX crude oil for July delivery may trade with negative bias this week. Support: 5550, 5310; Resistance: 5850, 5890

MCX crude oil traded in the range of 5570-5867 last week. Depreciation of Indian Rupee to 60.5 levels against dollar capped further fall in crude oil prices.

American Petroleum Institute release on US crude oil and gasoline inventories are scheduled for Wednesday. Weakness in Dollar Index may impact crude oil prices further.

MCX copper for June delivery is expected to trade sideways this week. Support: 398, 389; Resistance: 418,420

MCX copper traded in the range of 406-413 last week. The commodity witnessed low volatility on Chinese outlook.

Indian HSBC Services PMI and U.K Construction Purchasing Managers Index (PMI) data are scheduled for the week. Short recovery is expected for copper around 394-392 range.

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Indian Rupee holds key to MCX Gold movements; futures may consolidate gains

11 Jun

“Gold may see consolidation of gains registered on Monday; but weakening of Rupee against Dollar may see the futures scale up further, if the same occurs,” said John Godson, Technical Analyst with Commodity Online.

Movements in Indian Rupee are expected to impact MCX gold futures for the day even as analyst suggest that the commodity may consolidate gains of yesterday.

Rupee was seen trading at 58.871 against Dollar as of 11.36 AM IST. Gold futures on India’s MCX was seen trading up by 0.85% at Rs.28245 on 11.12 am IST. The commodity as of the time mentioned has maintained the range of 28041-28261.

“Gold may see consolidation of gains registered on Monday; but weakening of Rupee against Dollar may see the futures scale up further, if the same occurs,” said John Godson, Technical Analyst with Commodity Online. The weakness in Rupee may let gold on MCX appreciate despite a lack of bullishness in Comex gold, he pointed out.

He also provides support and resistance for the yellow metal.

Support for the commodity: 27900, 27700
Resistance for the commodity: 28300, 28325

Meanwhile, on the Globex platform of Comex, gold for delivery on August 13 was seen trading at $1,383.25/oz, a loss of $2.75 or 0.20% as of 11.30 AM IST.

Gold trading tips

Also, as fiscal risks start to retreat, S&P altered the U.S.’s AA+ credit rating outlook to stable from negative. Besides holdings in SPDR Gold Trust climbed on Monday for the first time since May 29.

The US economy meanwhile, added 175000 jobs in May compared to just 149000 in April, reports from last week said. US unemployment rate meanwhile climbed to 7.6% for the month and private non-farm pay rolls expanded just by 178000 compared to the forecast of 180000 in May.

Barclays notes that while the job data is signalling that “labour markets are improving at a moderate pace” it is “not decisive” in itself.

This means investors would be latched to uncertainty as they try to gleam from the data if or not the US Federal Reserve would phase out QE measures.

Barclays also expects the European Central Bank to keep the interest rates unchanged till the end of this year.

Since inflation rates in emerging markets have surprised to the downside, Barclays thinks that the monetary policy of these nations may continue to remain accommodative.

If the second and third expectations of Barclays are anything to go by, then investors can assume that futures of gold may find some support, though it may not be of on a significant scale if one is allowed to think of the days ahead.

What factors may influence Japanese Oil demand for the rest of 2013

10 Jun

“Although this (oil consumption) is extremely high, the situation is normalising with crude oil consumption for generation down 27% y/y while fuel oil demand for the same purpose has decreased 22% y/y. We expect this downward trend in crude oil and fuel oil usage to continue over H2 13,” Barclays estimated.

The Fukushima nuclear power plant crisis did take at least 48 of the 50 nuclear reactors in Japan offline in a stage-by-stage manner resulting in heavy reliance on crude oil and its distillates for power generation. But, so far into this year, Japanese demand for oil has “normalised” as strong numbers have dissolved into thin air. This is primarily due to the following set of reasons:

–Decreased industrial demand: Q1 Industrial Production average of Japan was 5.9% lower y/y which made a dent on the electricity generation and consumption figures.

–Fall in heating demand: Higher temperatures from late March to early April prevented a surge in heating demand.

–Nuclear power capacity making a comeback: The share of nuclear power in Japan’s energy mix has increased from 2% to 5.3%.

–High base usage and limited capacity expansion for oil-powered facilities.

Weird stats

It is opportune at this moment to recall some statistics in this regard:

–As mentioned earlier there had been 50 reactors in Japan functioning before the nuclear disaster.

–These reactors generated about 22.62 mn MWh at the end of 2010. The actual capacity of the reactors was double the number!

–As the plants were shut down one-by-one in Japan, the power generation figures dropped to 1 million MWh, a 96% drop compared to 22.62 million MWh!

–Recent days have seen the generation climbing to 1.76 million MWh

–April saw Japan burning 220% additional crude oil and 94% in extra fuel oil compared to pre-Fukushima levels.

crude oil intraday tips

“It is unclear how many reactors will be coming back online or how many will have to be decommissioned permanently based on the findings of the regulation authority,” Barclays said in the report on Japanese oil demand. Hydro and thermal sources are now sharing the power generation burden of Japan these days.

“Although this (oil consumption) is extremely high, the situation is normalising with crude oil consumption for generation down 27% y/y while fuel oil demand for the same purpose has decreased 22% y/y. We expect this downward trend in crude oil and fuel oil usage to continue over H2 13,” Barclays estimated.

So, what will influence one of the biggest economies in the planet in the second half of the year as far as crude oil demand is concerned?

Influencing negatives

Weakening of Japanese Yen: As Japanese Yen has weakened to 100 for a Dollar, compared to 80 last year, Japan’s crude import basket has turned out to be very expensive. For instance, March 2013 had seen the basket becoming most expensive since October 2008 breaking the 10500 mark and reaching 10875 for the month. The highest this basket has come to rule was at 14627 in August 2008. (But that was primarily due to a rally in underlying crude oil prices.)

Needless to say, importers of Japanese crude and fuel oils have begun to feel the heat of purchase. This should be read in the context of a possibility of range-bound trade in crude oil in the days to come.

Meanwhile forex market strategists at Barclays, “expect USD/JPY to rebound to 103 over the next 3-6 months because they expect it to be a bellwether if the government’s policy for targeting higher inflation is credible. Additionally, they expect the US economy to gain strength in H2, 13 and support market expectations of Fed tapering, leading to broad USD strength.”

Not good news for Yen bulls as well as crude oil importers in Japan.

Potential nuclear renaissance: It is clear that liberal democrats who are in power in Japan, especially, the Japanese PM Shinzo Abe want to push the start button in nuclear reactors, as and when the regulatory authorities give a green signal. The measure is deemed important by Abe and his team as only then would his party be able to carry out its economic agenda and secure their long term interests.

But the ride may not be smooth. On June 2, thousands of protesters took to streets in Tokyo in defiance of the Abe’s plan. They have alreadyc collected almost 8 million signatures against it. Meanwhile a nuclear plant in Tsuruga was found to be sitting on a fault line and thereby susceptible to earth quakes making its chance of getting approved almost nil.

“The authorities will continue to review plants and applications for potential restarts, though Abe’s push for imminent wide-scale nuclear power seems highly unlikely,” Barclays said in the report.

Influencing positives

Diesel cars and Abenomics: Diesel cars are becoming much more popular in Japan as the they increasingly turn out to be eco-friendly and subsidies for clean diesels kick in. No wonder Japanese gasoil demand has jumped 2.5% year-to-date.

“Last year, the higher call on fuel oil and crude for power generation trumped the negligible flat growth in gasoline, kerosene and gasoil. This year, we expect these refined products, particularly gasoil, to produce a slightly more measurable rate of growth,” Barclays said in the report.

However, domestic sales of new cars in Japan as well as trucks and buses have been falling by 7.3% y/y in May even as the drop may not be as steep as had been expected.

Meanwhile, with Abenomics under work, Japanese real GDP growth is expected to see annualised gains of 3.5%-3.7% over the four quarters starting second quarter in 2013 as Yen weakens further and fiscal spending climbs along with wealth effect taking routes on equity rallies.

All these factors can positively contribute to oil demand growth in Japan.

SPR sales: In a bid to replace heavier grades of crude oil with lighter ones–given the improved appetite for latter–Japan’s METI sold about 4.4 mb of crude from the country’s Strategic Petroleum Reserves.

The ministry is estimating to buy back 6.29 mb of light grades, saying they are waiting for the right moment. If carried out over a two-month span, it would boost imports by an additional 104 thousand b/d.

“In our view, given further depreciation of the yen expected…we would not be surprised if they come into the market sooner rather than at the tail end of the year,” Barclays said.

Taking all of these factors into consideration, Barclays expects Japanese oil demand growth to come down by a marginal 0.03 mb/d or 0.63% in 2013.