BULLION
Precious metals has climbed further on the final trading day during the last week as safe haven demand for the yellow metal continued to flow in as the markets weighed the economic recovery. The debt troubles in the European Union and the weaker than expected US jobs data gave rise to doubts about global economic recovery, resulting in it persuading the investors to go for gold during times of uncertainty.

Initial US jobless claims increased by 12000 to 42000 in the week ended June 12, according to Labor Department figures, signaling the labor market may not be improving and reducing the prospects for a sustained recovery. Gold prices climbed towards yet another all time high on 18th of June.

The most actively traded contract, for August delivery, settled $9.60, or 0.8%, higher at $1,258.30 an ounce on the Comex division of the New York Mercantile Exchange, after hitting the all time high of $1263.76 per ounce. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, rose to a record 1,307.96 tons last week

ENERGY
Crude oil prices fell on Friday last week as fears about the sustenance of economic recovery continued to haunt the markets following the weaker than expected US economic data. However, falling gasoline inventories and seasonal demand for oil helped win back some of the losses from earlier during the day.

The inventories of gasoline was reported to have dipped to six week lows as summer driving season commenced in the US, the largest consumer of crude oil. Crude oil for July delivery gained 39 cents, or 0.5 percent, to settle at $77.18 a barrel on the New York Mercantile Exchange.

Natural gas prices fell on Friday last week as the report from the Energy Information Agency showed that inventories continued to climb. Natural gas for July delivery on the New York Mercantile Exchange was trading 4.8 cents lower, or 0.93%, at $5.114 a million British thermal units.

Total gas in U.S. storage as of June 11 was 2.543 trillion cubic feet, about 14% above the five-year average and 0.1% above last year's level. However, forecasts show hotter than expected weather is expected to support prices of natural gas.

BASE METALS
Base metals prices ended the last week with losses as they fell on Friday following the weakness in the stock markets and weaker than expected US economic data. The jobs data of US, the second largest consumer of copper, showed signs of weakness and resulted in emergence of selling pressure in the markets.

Data also showed that manufacturing in Philadelphia of US expanded in June at the slowest pace since August. Copper for July delivery HGN0 on the New York Mercantile Exchange's COMEX division shed 2.15 cents to settle at $2.8840 per lb.

However, China has decided to give away its trade advantage in the international market as the country made its Yuan stronger, allowing more flexibility to the currency. The market is expected to react positively to the move as hopes of economic recovery have resurfaced. Stronger investor’s sentiment and higher appetite for risk can support prices of base metals as well.
Courtesy: JRG Commodities Research

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook