Metal and Energy Review

Gold futures closed lower, capping a seesaw session as investors were mostly sidelined, waiting for the Federal Reserve’s policy-meeting minutes from June for any clues about further easing. (1571.45)

Indian gold fell to its lowest level in more than a month, tracking weakness in overseas market and supported by stronger Rupee against Dollar. Gold holdings  of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,271.24 tons, as on July 10. Silver holdings of iShares silver trust, the largest ETF backed by the metal, increased to 9,729.89 tons, as on July 9.

There were also signs of concerns in Euro-zone with Italy saying on Tuesday that it may want to tap euro zone aid to ease its borrowing costs.

The minutes of the Fed’s meeting showed policy makers considered the risk that further easing might pose. Some members of the FOMC said that excessive purchases of Treasuries may “at some point, lead to deterioration in the functioning of the Treasury securities market that could undermine the intended effects of the policy.” A few officials said the central bank will probably need to take further action.

Copper futures eased slightly after hour’s trade, as minutes from the US Federal Reserve’s June meeting suggested economic conditions are likely to worsen before policymakers reach a consensus on more stimulus. Copper futures for Sept. delivery closed up by 1.5% at $3.4475 per pound on the COMEX of the New York Mercantile Exchange.

LME nickel has fallen toward 2-1/2 year lows, due to weakness in the stainless steel sector, for which nickel is a key material.

Crude oil rose above $85 per barrel; after a report showed US crude supplies fell for the second week, suggesting demand may be improving also refineries operated at the highest rate in almost 5-years.

The EIA cut has its world oil demand growth forecast for 2012 and 2013 while OPEC said that demand growth will slow in 2013 from what is already a weak level this year. The group, which produces a third of global oil, said daily average demand for its crude would stay below its current production levels.

Natural gas futures rallied the most in 3-weeks, as forecasts for hot weather to spread from the Mid-west to the North-east next week signaled stronger demand from power plants. Natural gas inventories are expected to increase by 26-30bn cubic feet, actual data will be released by EIA later in the day

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