Gold Price Start The Week Higher But Analysts See Volatility On Horizon

                    Gold prices are starting the week on a positive note but analysts are expecting prices to remain volatile with significant economic events looming on the horizon.

Comex August gold opened the Sunday North American evening/Monday Asian session at $1,307.60 an ounce, up from Friday’s pit close of $1,303.30 an ounce. As of 8:45p.m. EDT, August gold was trading at $1,305.30 an ounce, relatively unchanged from Friday’s close.

Electronic trading of Comex September silver futures opened Sunday evening/Monday morning at $20.715 an ounce, slightly up from Friday’s pit close of $20.636 an ounce; as of 8:15 p.m. EDT, September silver was at $20.740 an ounce.

Although gold prices are back above $1,300 after hitting a four-week low earlier last week, analysts at HSBC said they are expecting to see choppy markets during the week, with the scheduled FOMC and U.S. jobs numbers out on Friday. 

“Gold price volatility is likely to pick-up next week with the Federal Open Market Committee meeting on 29-30 July and the July nonfarm payrolls data to be released on 1 August,” the analysts said in a report published late Friday.

Edward Meir, commodities consultant with INTL FCStone said in a research note published Sunday afternoon that gold could find some support early in the week as markets react to continued turmoil in the Middle East and Eastern Europe. He also said that a potential default by Argentina, which could come by Thursday, should keep investors on edge and boost gold demand.

However, he added strong economic data later in the week could help create some positive investor sentiment, which would be good for equity markets and bad for gold prices.

Analysts at ANZ Bank are expecting gold to struggle as geopolitical events have started to lose their impact on the gold market.

“We don't expect the latest Middle East tension to be a significant driver of prices over an extended period,” they said in their report published Sunday evening.

Physical demand, which has helped support gold prices in the last appears to be losing some momentum, Meir also noted in his report.

“In the physical markets, there was an outflow of 3.6 tons from the SPDR Gold Trust as of last Thursday,” he said. “China’s net overseas purchases of gold through Hong Kong fell to a 17-month low in June, sliding to 40.54 tons, from 52.60 tons in May and 104.6 tons in the year-ago period.” - kitco.com

Read More

Natural gas futures - weekly outlook: July 28 - August 1

            

                    U.S. natural gas futures ended Friday’s session close to an eight-month low, as demand for the fuel was likely to remain limited after meteorologists predicted mild summer weather in much of the U.S.

On the New York Mercantile Exchange, natural gas for delivery in August tumbled 1.72%, or 6.6 cents, on Friday to settle at $3.781 per million British thermal units by close of trade.

Natural gas futures fell to $3.744 on Thursday, the lowest since November 26.

On the week, Nymex natural gas prices lost 4.3%, or 17.0 cents, the sixth consecutive weekly decline.

Futures were likely to find support at $3.741 per million British thermal units, the low from November 26 and resistance at $3.886, the high from July 24.

Natural gas prices have been under heavy selling pressure in recent sessions after updated weather-forecasting models called for cooler temperatures across most parts of the heavily-populated Midwest and Northeast regions over the next ten days.

Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.

Prices rallied more than 2% on Thursday after the U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. rose by 90 billion cubic feet, below expectations for an increase of 96 billion cubic feet.

The five-year average change for the week is an increase of 46 billion cubic feet.

Total U.S. natural gas storage stood at 2.219 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 23.5%, down from a record 54.7% at the end of March.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers decreased their bullish bets in natural gas futures in the week ending July 22.

Net longs totaled 27,748 contracts, down 26.2% from net longs of 37,617 in the previous week.

Elsewhere on the Nymex, crude oil for September delivery settled at $102.09 a barrel by close of trade on Friday, up 0.13%, or 14 cents, on the week.

Meanwhile, heating oil for August delivery advanced 2.19% on the week to settle at $2.912 per gallon by close of trade Friday. - investing.com

Read More

Crude oil futures - weekly outlook: July 28 - August 1

           

                     Brent oil futures rallied to a one-week high on Friday, as investors continued to assess the geopolitical situation in Eastern Europe and in the Middle East.

On the ICE Futures Exchange in London, Brent oil for September delivery rose to a daily high of $108.46 a barrel on Friday, the most since July 18, before settling at $108.39 by close of trade, up 1.23%, or $1.32.

The September Brent contract advanced 1.06%, or $1.15, on the week, the second consecutive weekly gain.

Investors continued to closely watch an intensifying geopolitical crisis between Moscow and the West over the situation in Ukraine.

The Pentagon said Friday that Russia has escalated the violence in Ukraine and may be set to provide more sophisticated weapons to pro-Russian rebels in eastern Ukraine.

Russia is one of the world's top producers and exporters of oil and gas.

Meanwhile, fighting between Israel and Hamas showed little sign of abating, despite ongoing efforts by the U.S. to reach a ceasefire.

Market participants are worried that a flare up in the conflict could draw in neighboring countries and affect oil supplies.

Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in September fell to a session low of $101.00 a barrel on Friday, the weakest since July 17, before coming off the lows to settle at $102.09, up 0.02%, or 2 cents.

U.S. oil prices were weighed by weekly supply data which showed that total motor gasoline inventories increased by 3.4 million barrels last week, above forecasts for a gain of 1.3 million barrels.

The larger than expected increase in gasoline stocks during the summer driving season in the U.S. was bearish for oil prices.

For the week, Nymex oil futures eased up 0.13%, or 14 cents, the second straight weekly gain.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in New York-traded oil futures in the week ending July 22.

Net longs totaled 278,116 contracts as of last week, up 6.8% from net longs of 259,259 in the preceding week.

Meanwhile the spread between the Brent and the WTI crude contracts stood at $6.30 a barrel by close of trade on Friday, compared to $5.29 in the preceding week.

In the week ahead, investors will be focusing on Wednesday’s preliminary reading on U.S. second quarter growth, while Friday’s nonfarm payrolls report will also be in focus.

Wednesday’s Fed statement will also be closely watched for any indications that the central bank is moving closer to raising rates.

The Commerce Department on Friday reported a rise of 0.7% in orders of long lasting goods such as machinery and electronic products, compared to forecasts of 0.5%.

The data came a day after the U.S. Department of Labor said that the number of individuals filing for initial jobless benefits in the week ending July 19 declined by 19,000 to hit an eight-year low of 284,000. - investing.com

Read More

Gold / Silver / Copper futures - weekly outlook: July 28 - August 1

                          Gold futures rallied 1% on Friday, as investors continued to monitor geopolitical concerns in the Gaza strip and Ukraine.

On the Comex division of the New York Mercantile Exchange, goldfor August delivery jumped 0.97%, or $12.50, on Friday to end the week at $1,303.30 a troy ounce.

Gold prices were likely to find support at $1,287.50, the low from July 24 and resistance at $1,316.80, the high from July 22.

Gold’s safe haven appeal was boosted on Friday as investors continued to closely watch an intensifying geopolitical crisis between Moscow and the West over the situation in Ukraine.

The Pentagon said Friday that Russia has escalated the violence in Ukraine and may be set to provide more sophisticated weapons to pro-Russian rebels in eastern Ukraine.

Meanwhile, fighting between Israel and Hamas showed little sign of abating, despite ongoing efforts by the U.S. to reach a ceasefire.

Gold is often seen as a haven investment in times of geopolitical uncertainty.

Despite Friday’s strong gains, Comex gold prices declined 0.46%, or $6.10 an ounce, on the week, the second consecutive weekly loss.

Gold tumbled to a five-week low of $1,287.50 on Thursday after upbeat U.S. economic data added to speculation that the Federal Reserve will hike interest rates sooner than expected.

The U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending July 19 declined by 19,000 to hit an eight-year low of 284,000.

On Friday, the Census Bureau said that U.S. durable goods orders rose 0.7% in June, beating expectations for a 0.5% gain. Core durable goods orders, which are stripped of transportation items, grew 0.8% in June, beating expectations for a 0.6% gain.

The data primed market expectations for the Fed to wind down its bond-buying stimulus program around October and raise interest rates in 2015, which would reduce the need for gold for use as a hedge against loose monetary policy.

In the week ahead, investors will be looking ahead to Wednesday’s monetary policy announcement by the Federal Reserve. The U.S. will also release the monthly non-farm payrolls report for July later in the week as well as a preliminary estimate on second quarter economic growth.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in gold futures in the week ending July 22.

Net longs totaled 136,120 contracts, up 3.1% from net longs of 131,971 in the preceding week.

Also on the Comex, silver for September delivery climbed 1.08%, or 22.1 cents, on Friday to settle the week at $20.63 a troy ounce, as investors returned to the market to seek cheap valuations after prices dropped to a five-week low on Thursday.

On the week, the September silver futures contract lost 1.19%, or 25.0 cents, the second straight weekly decline.

Data from the CFTC showed that net silver longs totaled 46,221 contracts as of last week, down slightly from net longs of 46,795 contracts in the preceding week.

Elsewhere in metals trading, copper for September delivery rallied to a daily high of $3.279 a pound on Friday, the most since July 13, before turning lower to end at $3.240 by close of trade, down 0.8%, or 2.6 cents.

On the week, Comex copper prices rose 1.72%, or 5.6 cents a pound as growing optimism over the health of the U.S. economy and speculation demand from top consumer China will increase in the near-term boosted prices.

According to the CFTC, net copper longs totaled 44,107 contracts as of last week, down from net longs of 48,994 contracts in the preceding week. -investing.com

Read More

Copper Remains Near Recent Highs While Gold Continues To Bottom

                  Gold is trading at 1292.60 adding $1.80 but remaining weak as the US dollar maintains its strength. Silver added 83 points to reach 20.498 and platinum is flat at 1472.10. Gold futures fell to the lowest in five weeks in New York as the outlook for an improving global economy reduced demand for a haven. 

A preliminary China Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics rose to an 18-month high. U.S. jobless claims fell to the lowest since February 2006 last week, a government report today showed. The Standard & Poor’s 500 Index of stocks closed at a record yesterday. The decline extends losses this month for bullion after unrest in Ukraine and the Middle East helped prices rebound 10 percent in the first half of 2014. Goldman Sachs Group Inc. reiterated a call for gold to drop further by year-end with an accelerating U.S. recovery, even as the bank raised its long-term forecast on the metal.

Prices for the yellow metal fell 1 percent to below $1,300 an ounce as the dollar and stock markets rose on surprisingly low weekly jobless claims and robust corporate earnings out of the United States. 

Data from Europe showed the services sector in the 18-member euro zone performing better than any forecast from 39 economists in a Reuter’s poll. All that diverted investor attention from the clashes in Gaza between Hamas and Israel, as well as the tensions in the Crimean region after the sanctions on Russia and the downing of a Malaysian passenger jet, that sent bullion rallying last week.

Goldman repeated a forecast for gold to drop to $1,050 by the end of 2014, analysts wrote in a report dated yesterday. The bank said it raised its long-term forecast 13 percent to $1,200 in 2014-dollar terms “to make it more in line with our marginal-cost support level.”

Data from the China Gold Association yesterday showed consumption in the country, which surpassed India as the largest user last year, fell 19 percent in the first half of 2014.

Copper gave up a few points this morning as traders booked profits after Thursday’s rally on Chinese data. Copper is trading at 3.255. Copper dropped for the first time this week as investors viewed a rally to the highest price since July 14 as excessive amid rising global supplies.

Copper is down 2.8 percent this year, the most among the six main metals on the LME. Global supply will exceed demand by 353,000 tons in 2014 and by 492,000 tons in 2015, according to Goldman Sachs Group Inc. Goldman cut its 12-month estimate for copper to $6,200 a ton from $6,600 due to rising output and exposure to a weak property market in China, the biggest user. Copper futures rose the most in three weeks as a gauge of manufacturing climbed to an 18-month high in China, the world’s top consumer of industrial metals.

China’s factory measure from HSBC Holdings Plc and Markit Economics showed a preliminary July reading of 52, compared with the 51 median estimates of analysts surveyed. A level above 50 indicates expansion. Copper inventories monitored by the London Metal Exchange extended a slump to the lowest since August 2008. - Fxempire

Read More

IMF Reduces Growth For US & China Lowering Implied Demand For Oil

                    On Thursday the International Monetary Fund has lowered its 2014 global economic growth forecast, warning of “negative surprises” from the United States and China and geopolitical risks in Ukraine and the Middle East. The IMF projected global growth of 3.4 per cent for this year, down from its April estimate of 3.7 per cent. In 2013, the world economy grew 3.2 percent. The downgraded 2014 growth outlook reflects “both the legacy of the weak first quarter, particularly in the United States, and a less optimistic outlook for several emerging markets,” the IMF said, in an update of its semiannual World Economic Outlook.

The downgrade weighed on implied demand for energy products. The brief update showed the IMF increasingly concerned by escalating geopolitical tensions. “Geopolitical risks have risen relative to April: risks of an oil price spike are higher due to recent developments in the Middle East while those related to Ukraine are still present,” the report said. Despite the worse-than-expected global growth outlook for 2014, the IMF left its 2015 forecast unchanged at an annual rate of 4.0 per cent, the fastest pace since 2011.

The lower growth rates weigh on commodity demands, but at the same time the increase in geopolitical concerns pushes the price of crude oil on worries over supply and production disruption. WTI slipped $1.05, or 1 percent, to end at $102.07. The volume of all futures traded was 23 percent below the 100-day average for the time of day. Brentdeclined 96 cents, or 0.9 percent, to close at $107.07 a barrel 

West Texas Intermediate crude declined with gasoline as U.S. inventories of the motor fuel expanded for a third week, threatening to depress refining margins. Gasoline stockpiles grew by 3.38 million barrels last week and supplies around New York Harbor, where futures contracts are delivered, were at the highest seasonal level since 2008, Energy Information Administration data showed. Gasoline futures ended at the lowest price in almost six months. Gasoline futures for August delivery dropped 2.33 cents to $2.8368 a gallon on the Nymex, the lowest settlement since Feb. 28. Ultra low sulfur diesel dropped 0.45 cent to $2.8709.

Natural gas gained after the release of the weekly EIA inventory report. Gas climbed to trade at 3.847 adding 8 points this morning. The report showed a net increase of 90 Bcf from the previous week. Stocks were 561 Bcf less than last year at this time and 683 Bcf below the 5-year average of 2,902 Bcf with the total working gas below the 5-year historical range. - fxempire

Read More

WTI Swings as Crude Stockpiles at Cushing Decline; Brent Steady

                     West Texas Intermediate swung between gains and losses after U.S. government data showed crude supplies at the delivery point for New Yorkcontracts shrank to the lowest level since 2008. Brent was steady in London.

Futures were little changed in New York after rising 0.7 percent yesterday. Crude stockpiles at Cushing, Oklahoma, the biggest U.S. oil-storage hub, dropped by 1.45 million barrels to 18.8 million, the least since November 2008, according to an Energy Information Administration report. A measure of manufacturing in China, the world’s second-largest oil consumer, climbed to an 18-month high in July.

“The long-run story has not changed, global supply still looks healthy,” Barnabas Gan, an economist at Oversea-Chinese Banking Corp. inSingapore, said by phone today. “The global growth tailwinds are expected to continue, and that does give oil investors a reason to see higher prices in the short term.”

WTI for September delivery was at $102.86 a barrel on the New York Mercantile Exchange, down 26 cents, at 3:22 p.m. Singapore time. The contract increased 73 cents to $103.12 yesterday. The volume of all futures traded was 20 percent above the 100-day average. Prices have advanced 4.5 percent this year.

Brent for September settlement was 22 cents lower at $107.81 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $4.96 to WTI, compared with $4.91 yesterday.

Fuel Supplies

U.S. crude inventories nationwide fell by almost 4 million barrels to 371.1 million in the week ended July 18, said the EIA, the Energy Department’s statistical arm. Supplies were down for a fourth week, the longest run of declines since January. They were forecast to decrease by 2.9 million, according to the median estimate in a Bloomberg News survey of nine analysts.

Gasoline stockpiles expanded by 3.38 million barrels, compared with a projected gain of 1 million. The peak U.S. driving season typically starts on Memorial Day, which came on May 26 this year, and runs through Labor Day on Sept. 1.

Distillate inventories, including heating oil and diesel, rose by 1.64 million barrels last week, the EIA report shows. An increase of 2 million was projected in the survey.

In China, a preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was at 52, topping the median prediction of 51 in a separate Bloomberg survey and June’s final level of 50.7. Readings above 50 signal expansion.

The Asian country will account for about 11 percent of global oil demand this year, compared with 21 percent for the U.S., according to theInternational Energy Agency in Paris. - Bloomberg

Read More

Gold Drops Below $1,300 as Stocks Rally Curbs Demand

         Gold fell to the lowest level in a week as a rally in equities damped demand for an alternative investment amid concern that physical consumption is faltering.

Gold for immediate delivery lost as much as 0.7 percent to $1,294.98 an ounce, the lowest since July 16, before trading at $1,295.92 by 2:32 p.m. in Singapore, according to Bloomberg generic pricing. The metal has retreated for three days, and is on course for the first back-to-back weekly drop since May.

Bullion sank 28 percent last year on expectations the Federal Reserve will reduce stimulus. The Standard & Poor’s 500 index rose to a record yesterday as earnings of companies including Facebook Inc. topped estimates. Data yesterday showed gold consumption in China, which surpassed India as the largest user last year, fell 19 percent in the first half of 2014. The metal isn’t likely to get support from Indian demand as import restrictions remain unchanged, according to Commerzbank AG.

“The rally in U.S. equities continues to be a headwind for gold, despite safe-haven buying providing some support to prices,” Victor Thianpiriya, commodity strategist at Australia & New Zealand Banking Group Ltd., wrote in a note today.

Goldman Sachs Group Inc. reiterated a call for gold to drop to $1,050 by the end of 2014 as the U.S. economic recovery accelerates, analysts wrote in a report dated yesterday. The bank raised its long-term forecast 13 percent to the marginal cost support level of $1,200 in 2014-dollar terms.

Ukraine Jets

Gold has rebounded 7.8 percent this year in part as tensions in Ukraine and the Middle East fueled haven demand. The price failed to advance yesterday even as pro-Russian separatists shot down two Ukrainian fighter jets in the same eastern region where a Malaysian Air passenger jet was destroyed on July 17, the government said.

Gold for December delivery fell as much as 0.7 percent to $1,297 an ounce in New York, the lowest since July 16, before trading at $1,298. Holdings in the SPDR Gold Trust, the largest bullion-backed exchange-traded product, rose for a second day yesterday, data on its website showed.

Silver for immediate delivery declined 0.6 percent to $20.7998 an ounce. Spot platinum dropped as much as 0.7 percent to $1,471.89 an ounce, the lowest level since June 27, before trading at $1,472.29. Palladium decreased 0.3 percent to $869.21 an ounce.

Read More

Gold Is Tumbling While Copper Is Climbing

                        Gold is trading below $1300 and headed down this morning. Gold gave up $6.70 in the Asian session to trade at 1298.00 after touching a low of $1295.78. Silver followed alone declining by 152 points to trade at 20.843 and platinum touched 1479.65 duplicating gold’s movements. Asian equity markets rose on following upbeat economic data from China and as the region’s earnings season got under way. On Wednesday gold was holding its ground above $1,300 as violence deepened in the Middle East over the Gaza strip and as holdings in the top bullion-backed fund rose on safe-haven bids. Tensions remained high between Russia and the West over Ukraine.  Kiev said two of its fighter jets were shot down over the rebel-held territory in eastern Ukraine on Wednesday, and the missiles that brought them down might have been fired from Russia.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.6 tonnes to 805.44 tonnes on Wednesday – a second straight day of increase. Gaza fighting raged on Wednesday, displacing thousands more Palestinians in the battered territory as U.S. Secretary of State John Kerry said efforts to secure a truce between Israel and Hamas had made some progress. Gold prices are expected to move in a range to down for the day over its fading safe haven appeal and poor physical demand.

China’s HSBC Flash Manufacturing Purchasing Managers’ Index (PMI) increased by 1.3 points to 52-mark in July from 50.7-level in the last month.

The US Dollar Index traded on a positive note and gained around 0.1 percent yesterday on the back of weak market sentiments in later part of the trade which lead to increase in demand for the low yielding currency. However, sharp upside in the currency was capped due to estimates of rise in interest rates in near future and investors will keep a close eye on US Federal Reserve meeting to be on held 29th-30th July 2014. The currency touched an intraday high of 80.92 and closed at same levels on Wednesday. The US dollar is trading at 80.90 in the Asian session.

Base metals on traded lower yesterday on speculation that the rally in the prices of Zinc, Lead and Aluminium were excessive in absence of enough fundamental demand. Also, investors were conscious ahead of manufacturing data from the US, Euro Zone and China due today. However, declining trend in LME inventories along with recovery in markets sentiments restricted sharp downside. Metals reversed their declines to gain after the release of Chinese PMI data, with copper climbing to trade at 3.231 up by 25 points and continuing to rise.  - fxempire

Read More

Copper jumps 1% after China PMI hits 18-month high

                      Copper futures rallied to a more than one-week high on Thursday, as investors cheered better than expected manufacturing data out of China, the world’s largest consumer of the red metal.

On the Comex division of the New York Mercantile Exchange, copper for September delivery rose to a session high of $3.253 a pound, the most since July 16, before trimming gains to last trade at $3.248 during European morning hours, up 1.27%, or 4.1 cents.

Copper ended Wednesday’s session down 0.03%, or 0.1 cents, to settle at $3.207. Futures were likely to find support at $3.192, the low from July 23 and resistance at $3.255 a pound, the high from July 16.

Data released earlier showed that China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, rose to an 18-month high of 52.0 in July from a final reading of 50.7 in June. Analysts had expected the index to rise to 51.0 this month.

Copper traders consider shifts in the HSBC PMI an indicator of China's copper demand, as the industrial metal is widely used by the sector.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Elsewhere on the Comex, gold for August delivery shed 0.43%, or $5.60, to trade at $1,299.10 a troy ounce, while silver for September delivery dipped 0.41%, or 8.7 cents, to trade at $20.90 an ounce.

Later in the day, the U.S. was to produce data on unemployment claims, manufacturing activity and new home sales, amid ongoing speculation over when the Federal Reserve may start to raise interest rates. - investing.com

Read More