BULLION-Gold
The yellow metal benefited on the final trading day of the week as buying interest that emerged from lows helped gold prices end with gains following weaker than expected US GDP figures for the second quarter. The most actively traded gold contract, for December delivery, rose $12.70, or 1.1%, to settle at $1,183.90 an ounce on the Comex division of the New York Mercantile Exchange.

The weaker than expected US GDP pulled the US dollar down against the European currency, which has been trekking higher as positive business climate and consumer confidence from the European Union eased concerns of sovereign debt troubles in the region.

However, the holdings of SPDR, the largest gold backed exchange traded fund, has been decreasing steadily, and reaching 1282.82 tonnes after losing 3 percent after June 2010. Overall, gold holdings in the physical gold funds Barclays Capital tracks now stand at 2,068.7 tons and have fallen 22.1 tons for the month.

ENERGY
Crude oil futures pared gains on the Friday as less than impressive second quarter GDP figures of US, the largest consumer of crude oil, gave rise to speculation of slowing growth in the region.

However, both University of Michigan consumer sentiment and the Chicago Manufacturing PMI were slightly better than expected, which helped equity markets to recover and attract funds back into commodities. Crude oil prices recovered later during the session, closing near $79 per barrel on the New York Mercantile Exchange.

However, the sentiments continue to remain grim as figures showed that Chinese manufacturing fell to a 17-month low following the governments efforts to deflate the real estate bubble that threatens the economic progress of the country.

Natural gas prices also ended with gains on Friday last week as fund flows into commodities market increased significantly. Higher average temperatures are likely to persist throughout this week in the major gas consuming areas of US, according to the forecasts of Commodity Weather Group of US.

The cooling requirements in the country are expected to be 17 percent higher than normal through Aug 5, according to the forecasts from Weather Derivatives of Belton Missouri. About 23 percent of US electricity is generated using natural gas, as pointed out by the Energy Department of US. In addition, net long positions in futures and options combined in four natural gas contract increased by 15197, or 14 percent to 120837 in the week ended July 27, reported CFTC.

However, the supplies of natural gas remain to be abundant.

BASEMETALS
Base metals prices were up on Friday as positive Chicago manufacturing PMI and University of Michigan consumer sentiment turned out to be positive. The market, however, gave away some of its gains earlier during the day as the data showed that US GDP figures for the second quarter was 2.4 percent, as against the expectations of 2.5 percent.

Nevertheless, the GDP growth for the first quarter was revised up to 3.6 percent from the preliminary figure of 2.7 percent increase. The red metal jumped towards a fresh 11-week high on Friday as sentiments remains positive with better than expected US economic data, rising stock markets and a weak US dollar.

However, data from China, the largest consumer of base metals, showed that the manufacturing PMI in the country has fallen to 51.2, a 17-month low, during July.

Courtesy: JRG Commodities Research

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