Gold, Silver, Crude Oil and Natural Gas Update

futures traded in a tight range but managed to close higher, as the dollar weakened while bargain buying was seen after previous week’s sharp drop in the prices. Gold holdings  of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,275.46 tons, as on July 9.

Silver holdings of iShares silver trust, the largest ETF backed by the metal, increased to 9,729.89 tons, as on July 9.

The dollar index, which compares the US unit to a basket of other currencies, declined to 83.161, down from 83.359 on late Friday.

Hedge funds and money managers boosted their bullish bets in US gold futures and options by 30% in the week up to July 3, after a European deal to shore up banks and cut borrowing costs increased bullion’s investment appeal.

Speculators also sharply cut their copper net shorts after prices rallied over 5% during the period covered, as per CFTC data.

China’s annual consumer inflation came in at 2.2%, a lower rate than the 3% in May, which left room for Beijing to ease policy without stoking upward price pressures. China’s Trade Balance widened this morning with exports report above forecast, but a huge drop in imports. Markets are disappointed with the data.

Copper closed in positive, recovering from its earlier dip to one-week low on hopes for more monetary easing by central banks, including in top metals consumer China.

Copper futures for Sept. delivery closed down by 2.4% at $3.4095 per pound on the COMEX of the New York Mercantile Exchange.

Oil prices jumped 2%, with Brent futures rising back above $100 per barrel, as a strike by workers and a planned lockout by companies threatened to completely shut Norway’s crude oil production. By the end of the day, the oil strike was settled and oil prices returned to their prior levels.

Iraq’s government said crude oil exports from the semi-autonomous northern region of Kurdistan to neighboring Turkey are “illegal” and threatened on Monday to take “appropriate action,” in a continuation of recent of tensions between the two as reported by the Wall Street Journal.

Natural gas futures closed higher, as forecasts for above-normal temperature in mid-July for much of the nation raised hopes of rising gas consumption. Natural gas futures traded on NYMEX has moved into backwardation for the first time in 10-months, as record heat boosted demand from power plants. (Backwardation occurs when the front month contract trades at a higher price than contracts for later delivery).

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