Markets Moving Past Bernanke Euphoria

Markets Moving Past Bernanke Euphoria
Markets Moving Past Bernanke Euphoria
As markets recover from “Bernanke Euphoria” traders are pushing to the US dollar to recover and is trading at 82.98 this morning. Federal Reserve Chairman Ben Bernanke said on Wednesday the U.S. central bank would continue to pursue an accommodative monetary policy as inflation remained low and the unemployment rate might be understating the weakness of the labor market.

European shares closed higher on Thursday following dovish comments from U.S. Federal Reserve Chairman Ben Bernanke, and renewed optimism on the economic outlook in Japan and China. US Stocks roared higher to finish near their best levels Thursday, with the Dow and S&P 500 closing at record highs. The euro recovered over 200 points to trade at 1.3087

Federal Reserve Chairman Ben S. Bernanke called for maintaining accommodation even as the minutes of policy makers’ June meeting showed them debating whether to stop bond buying by the Fed in 2013.

The number of Americans filing for unemployment benefits unexpectedly increased to a two-month high last week. Swings in jobless applications are typical in July as auto plants close for annual retooling. First-time claims rose by 16,000 to 360,000 in the week ended July 6 from a revised 344,000.

Consumer sentiment climbed for a fourth straight week, reaching the highest level in more than five years as Americans grew more upbeat about their finances.  Australia’s unemployment rate rose to the highest since 2009, underscoring the challenge newly-installed Prime Minister Kevin Rudd faces as he crafts a re-election pitch centered on economic management. The Australian dollar tumbled this morning after comments from China saying that their growth my only hit 6.5% this year.

Europe’s industrial production is also likely to turn out negative for the economy, which should pressurize the euro. Later in the day the US will release its producer price index and Michigan confidence data which are expected to improve and may support the dollar. Germany’s wholesale price index remained weak.

The Japanese yen is trading at 99.04 dipping a few points today after comments from Bank of Japan Kudora. Mr. Kuroda said recent economic indicators were clearly pointing to a recovery, adding that it was being fueled by improvements in key components–exports, corporate sentiment and profits, as well as growth in consumption. He said the weak yen was benefiting exports, while better business conditions were resulting in more spending. “Among firms, a virtuous cycle between income and spending is expected to gradually start working.”

The policy board decided unanimously to leave policy unchanged, and Mr. Kuroda strongly indicated that with the economy and prices moving in line with the BOJ’s expectations, the bank was not considering any additional steps in the near term. “All necessary and adequate measures are in place to hit 2% inflation target in about two years, although it may become necessary to make adjustments to both upside and downside risks in the future.”

Gold & Silver Gain In Asian Session

Gold & Silver Gain In Asian Session
Gold & Silver Gain In Asian Session
Gold gained in Asian trading this morning to trade at $1252.75 gaining $17.85 as speculators review Chinese data released earlier today showing a climb in inflation, which could limit the monetary easing by the Peoples Bank of China. Gold prices rose on Monday as a weaker dollar supported prices and attracted bargain hunters. The dollar weakened after Greece secured its next tranche of bailout fund and boosted the euro. Holdings in SPDR gold trust, world’s largest gold-backed exchange-traded fund hit fresh lows yesterday since Feb 2009. Gold prices internationally are expected to move down as outflows from exchange traded funds could continue to weigh on prices. Gold continues its daily cycle, gaining in the Asian session and giving back those gains throughout the day.

Gold futures closed higher on short-covering, as traders recouped some of the losses it suffered at the end of last week. India’s gold imports fell 80.56% to 31.5 tons in June from the previous month, a government source familiar with the data said on Monday. However, the source said gold imports are expected to increase in coming months due to a fall in prices ahead of festive season.

The US dollar lost ground, with a closely watched index of the currency’s value retreating from a 3-year high as investors kept a close eye on bond yields influenced by expectations that the Federal Reserve will begin to slow stimulus to the economy later this year. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 946.96 tons, as on July 8. Silver holdings of ishares silver trust, the largest ETF backed by the metal, declined to 10,034.95 tons, as on July 8. The base metals pack traded on a positive note in the trade on the back of weakness in the DX. Additionally, global markets and Eurozone finance ministers agreed for package to Greece supported an upside in prices. Further, LME inventories except Aluminum acted as a positive on prices

Copper prices rose after the dollar eased from 3 years high and pushed prices up. However, concerns over Growth in China which is expected to slow down to a 23 year low limited the upside in prices. Stocks in Shanghai warehouses fell which indicated some pick up in physical demand and supported prices. Base metals are expected to go up today on positive Chinese CPI numbers which came at 2.7 and an easing dollar index Taking cues from rise in gold prices along with upside metals complex, silver prices rose around 1.2 yesterday’s trade and is trading at 19.335 up almost 30 cents in the morning session. Further, weakness in the DX supported an upside in the prices. The white metal touched an intra-day high closed at $19 in the yesterday’s trading session.

Political Tensions, Economic Reports and Weather Forecast Push Crude Oil Prices

Political Tensions, Economic Reports and Weather Forecast Push Crude Oil Prices
Political Tensions, Economic Reports and Weather Forecast Push Crude Oil Prices
Crude oil is trading at 103.64 gaining 42 cents this morning as Egypt remains the central focus of the markets, but ongoing crisis in Turkey and Syria continue to flourish. Death tolls from Syria and Turkey were the headlines of the news this morning. Speculators as well as ordinary people from around the globe continue to watch these situations closely, as Egypt continues to try to find a way to appease all parties and form a government. The biggest worry is the possibility of a regional uprising, while any disruption in crude oil supply could upset markets easily, with Egypt the largest country in the region and holding control of the pipeline and the Suez Canal, violence could easily upset the flow of oil.

The escalation in the Egypt could be among the factors pulling up the price of oil on account of the concern regarding the potential blockage of the Suez Canal, in which nearly 3.8 million barrels per day transport through it. Keep in mind, in 2011 Arab spring that also erupted in Egypt, the Suez Canal remained open. Therefore, the current developments in Egypt are less likely to affect the shipment of oil via the Suez Canal.

The prices of oil (WTI and Brent) continued their rally during last week. WTI increased by 6.9% while Brent oil also increased by 5.44%. As a result, the gap between the Brent oil and WTI moderately contacted; the gap between Brent and WTI ranged between $4 and $5. The latest EIA weekly update showed that oil stockpiles declined by 14.6Mb. Conversely, refinery inputs and imports rose while production edged down during last week. This week, several reports may affect the oil market. These items include: minutes of FOMC meeting, OPEC and IEA oil reports, the developments in the Middle East, and EIA oil weekly update.

OPEC’s upcoming report will show of any changes in crude oil and natural gas’s supply and demand worldwide; the report will also show the changes in OPEC countries’ oil production quota during June 2013; this news may affect oil prices. The report will be published on Wednesday, July 10th. The IEA Monthly Report will present an updated (for August) outlook and analysis for the global crude oil and natural gas market for 2012 and 2013. The data is due on Thursday, July 11th.

During last week, the EUR/USD fell again by 1.39%; moreover, the AUD/USD also slipped by 0.78%. The correlations among these currencies pairs and oil prices contracted. The effect of the forex market on oil price seems to have diminished in recent weeks.

Natural gas is trading at 3.644 gaining 29 pips following market sentiment as excess production will be shifted to lower priced commodities increasing the demand for natural gas as it is the cheapest energy substitute. News of a weather situation is also causing higher prices for both crude oil and natural gas as traders stress when storms are predicted. A tropical storm may develop in the mid-Atlantic early this week, according to the U.S. National Hurricane Center in Miami. A collection of severe thunderstorms and low pressure about 1,050 miles east-southeast of the Windward Islands has a 70 percent chance of becoming a tropical storm or depression in the next two days, according to weather outlook from the center.

 

 

Do We Taper & When – Gold Traders Want To Know

Do We Taper & When - Gold Traders Want To Know
Do We Taper & When - Gold Traders Want To Know
Last week, gold and silver prices continued their downtrend even though metals had started the week on a positive note. Their fall coincided with the weakness of leading currencies such as euro and the Aussie that depreciated against the stronger USD during last week. Following the release of the U.S non-farm payroll report, in which 195k jobs were added, more investors now believe that the Fed may taper QE3 in September or December 2013; this will slow down the growth of U.S money base and consequentially further lower the demand for gold and silver as safe haven investments. The next FOMC meeting scheduled for the end of the month will shed some light on this issue. Moreover, during last week, ECB and BOE left their respective cash rates unchanged. The ECB president and BOE governor hinted that they may keep rates low or slash them in the coming months. These headlines were enough to pull down the euro and pound against the USD. This week’s key event for metals will be Wednesday’s double whammy, with Fed Chairman Bernanke speaking and the release of FOMC minutes from its June meeting. This morning gold has added a few dollars to trade at 1219.26 as traders are buying on the cheap after gold tumbled to recent lows. Silver is following in the shadow of gold adding 62 pips to trade at 18.79. Silver got an extra bump by stronger US data, which helps increase the demand for the industrial metals.

Based on upcoming events and latest developments, gold and silver prices might further fall this week after Wednesday events. The sharp decline of both gold and silver prices at the end of the week might lead to a correction at the beginning of the week, but the general downward trend may persist. The upcoming publication of the FOMC meeting and Bernanke’s speech could affect precious metals markets if either of these events could shed some light on the Fed’s future plans. I suspect the upcoming minutes won’t stir up the markets since many wait for the September or end of the year FOMC meeting, in which the Fed may decide to taper QE3. Until then, the ongoing developments in the U.S economy could influence traders as to the future plans of the Fed.

Base metal futures are seen trading down this week, as release of upbeat US non-farm payrolls data has raised fear in the market that the Federal Reserve might taper its bond purchase program soon.

The rise in the dollar index after encouraging US data is also expected to build downward pressure on base metals. Copper futures extended their earlier losses on Friday, falling by more than 2% after a better-than-expected reading on the U.S. labor market. Copper is sensitive to shifts in the economic outlook because of its widespread use in many industries. A stronger U.S. economy could spur the Federal Reserve to curb its stimulus. The central bank’s easy-money programs have supported prices of copper and other commodities. Copper is trading at 3.0811 adding 11 pips this morning. Copper futures had traded at about $3.10 a pound ahead of the report. Prices slumped early on Friday, catching up with Thursday’s losses in other copper markets

Gold and Silver Diverge On Strong Economic Data

gold 2 bnsEconomic numbers gave investors some reason for optimism this week. Jobs numbers were mostly better than expected, yet a weak manufacturing report raised concerns about economic growth. U.S. markets were closed Thursday in observance of Independence Day. Traders are now preparing for the marquee event of the week, the US nonfarm payroll release. On Thursday the ECB and BoE statements kept markets hoping. Traders can never know what to exactly expect from central bankers. Both banks held rates and policy but sent the market volatility meter climbing with their statements. As we ease into today’s data release the US dollar is continuing to climb toward recent highs touching 84.15 while the euro is weak at 1.29. Gold closed down on Thursday and is off in the Asian session this morning trading at $1243.25 down by $8.65

Investors liked what they saw in the job numbers, mostly from the ADP’s monthly figure on private-sector payrolls. These figures came in above expectations. First-time unemployment claims came in slightly below forecasts. Still, investors are waiting for the big jobs numbers due out Friday. Economists surveyed predict the U.S. economy added 155,000 jobs and the unemployment rate fell to 7.5% in June.

Today’s report is important not just for its view into labor markets, but also as a guide to Federal Reserve policy. The Fed, however, will not ignore events going on overseas. A negative change in the global economic outlook or in financial markets could stop the Fed from discussing an exit from the bond buying program.  The importance of the global economy on the U.S. recovery was evident in the latest trade numbers. The U.S. trade deficit unexpectedly widened in May. The global slowdown cut into U.S. exports and the relatively healthy U.S. consumer sector brought in more imports. Depending on June data, foreign trade may have subtracted a half-percentage point from second-quarter economic growth that was already looking meager before the trade numbers were released. The payrolls report is the biggest market-mover on the economic calendar. This time, though, the report may share the spotlight with global turmoil.

The slump in gold prices has hit the European Central Bank where it hurts: its balance sheet. The consolidated balance sheet of the ECB and its 17 member central banks plunged at the end of last week as a result of a revaluation of gold prices, data provided by the ECB showed Wednesday. The regular quarterly revaluation meant that the Eurosystem’s gold holdings fell 115 billion euros.

Gold prices are likely to come under pressure on spot and futures market on Friday as the global markets await US jobs data later in the night. In between, movements in the currency market could play a minor role in the price swings. Indications are that the US data may show that more jobs were added, signaling that the economy is improving. That could eventually lead to the US Fed Reserve scale back monetary stimulus.

Silver is trading at 19.293 against the strong US dollar, supported by the strong recovery in the US as demand for metals continues to increase, along with better than expected PMI data from around the globe. Base metals are expected to go down as continued weakness in Chinese economy and caution ahead of US payroll data can put pressure on prices. Copper is trading at 3.117 down by 34 pips this morning after strong gains throughout the week.

 

Safe Haven Buying Pushed Gold In The Asian Session

Safe Haven Buying Pushed Gold In The Asian Session
Safe Haven Buying Pushed Gold In The Asian Session

News showed yesterday that gold sales from Australia’s Perth Mint, which refines nearly all of the bullion mined in the country, declined for a second month in June as prices extended a bear-market slump, deterring buyers. This news not only supported the huge decline in gold falling 23% last month, but also weighs heavily on the Australia economy with the AUD falling to trade in the 0.91 range after coming close to 1.06 just weeks ago.

With global economic indicators pointing toward a recovery and inflation remaining in check gold is trading in a downtrend. The US dollar continues to climb on positive data while traders try to decide what the Federal Reserve will do in their upcoming meetings. US jobless claims decreased by 5,000 to 343,000 in the week ended June 29 from a revised 348,000 in the prior period that was higher than initially reported. The survey median called for 345,000 claims. Separate reports showed companies boosted employment by 188,000 workers in June while service industries unexpectedly expanded at the slowest pace in more than 3 years. The trade deficit in the U.S. unexpectedly jumped in May as imports climbed to the second-highest level on record, pointing to an economy that is overcoming higher taxes and government cutbacks. The gap widened by 12.1% to $45 bn from $40.1 bn in April, Commerce Dept. figures showed. The median forecast called for a $40.1 bn deficit.

Gold edged higher for a second session this morning as worries over Europe and Egypt prompted safe-haven buying, but the mood remained cautious ahead of US jobs data that could determine the outlook for the Federal Reserve’s stimulus measures. The yellow metal has gained nearly 2 per cent so far this week after posting its biggest quarterly loss on record, helped as well by short covering and bargain hunting. The last two days it has been boosted by political turmoil in Portugal, where talks over the government’s future threatened to reignite the euro-zone crisis and by the ousting of Egypt’s President Mohamed Mursi by the army. It is typical safe-haven buying. US nonfarm payrolls data due on Friday could determine when the Federal Reserve would begin tapering its US$85 billion monthly bond buying stimulus.

Silver prices have climbed this morning adding almost 40 cents heading back towards the $20 price level holding at 19.678 at this writing, after PMI around the data supported stronger manufacturing and China’s promise to adjust its banking policies to push growth. The demand on industrial metals should climb helping buoy silver prices.

Crude Oil Climbs On Egyptian Coup But Limited By High Inventory

Crude Oi Climbs On Egyptian Coup But Limited By High Inventory
Crude Oi Climbs On Egyptian Coup But Limited By High Inventory

With US markets closing early on Wednesday and out for the US Independence Day holiday, the drama unfolding in Egypt did not shake the markets too drastically yesterday, but will take its toll this morning. Gold has climbed by almost $12.00 as traders move to safe havens. Crude oil continues to climb adding $1.69 to trade at 101.29. Oil prices ended higher for a third consecutive day on Wednesday, with the New York contract settling at a 14-month high, as traders fretted about unrest in Egypt and reacted to rapidly tightening supplies in the U.S. domestic market.

Late yesterday, the Egyptian military staged what is being defined as a “coup”, although non-violent it now claims that it is in control of the government, while President Morsi, and seems to remain in power refusing to step down or leave. Mursi defended his legitimacy as an elected leader in a keynote speech last week before an invited audience of cheering supporters, after a first warning from the army to embrace his opponents. Broadcast live on national television for nearly three hours, it was a mark of a stubborn failure to understand how to communicate beyond the Brotherhood’s electoral base.

Egypt’s military-led authorities shut down three Islamist-run TV stations on Wednesday including one operated by the Muslim Brotherhood after President Mohamed Mursi was toppled by the army, drawing a statement of concern from a press freedom watchdog.

Traders remain worried about the overflow of protests which currently see turmoil, in Syria and Turkey. News this morning said that the military is holding President Morsi in detention at a military base.

Yesterday’s weekly releases of crude oil and gasoline inventories from the Department of Energy (DoE) both showed considerably larger than expected declines, and with oil prices already on the rise, today’s data won’t help.  While traders were expecting crude oil inventories to fall by 2.25 million barrels, the actual decline was more than four times that at 10.347 million barrels.  This was the largest weekly decline so far this year.  Even after this week’s sharp decline, though, inventories still remain well above average. While gasoline inventories also declined this week, the drop was not nearly the magnitude of the decline in crude oil stockpiles.  Traders were expecting inventories to rise by 700K barrels, while the actual change was a decline of 1.719 million barrels.  As shown in the chart below, this week’s drop was right in line with what we typically see in gasoline inventories at this time of year.

Natural gas rose for a third straight day on Wednesday, reversing early losses, as traders blamed short covering ahead of the U.S. Independence Day holiday on Thursday and hotter weather expected for the Northeast next week. U.S. natural gas inventories increased by 72 billion cubic feet on average last week in line with the expectations. Natural gas is trading flat this morning at 3.686 with markets closed today.

 

Gold and Silver Fighting A Strong US Dollar

Gold and Silver Fighting A Strong US Dollar
Gold and Silver Fighting A Strong US Dollar

Gold is trading between small losses and gains this morning with little direction. Gold is holding at $1245, ahead of shortened trading day in the US and the US 4th of July holiday tomorrow. Trading is expected to be light with low volatility ahead of Friday’s nonfarm payroll release. On Thursday, the ECB and the Bank of England are scheduled for their monthly rate and policy meetings. No changes are expected but this will be the first meeting under the leadership of Mark Carney at the Bank of England, so there may be some fireworks if he opts for a press conference or statement. In the UK if the BoE leaves rates and policy on hold, there is no mandatory statement or conference, which ex-Governor King took advantage of. Later in the day the press conference by ECB Draghi is expected to light up the sky as Mr. Draghi is known to do. His press conferences are usually not dull or boring, although his last conference Mr. Draghi refrained from his usual surprises. Trading though will remain light with the Americans out on holiday.

Gold futures declined from their recent highs, pulling back from a nearly 4% climb over the past 2-trading sessions, as dollar strengthened after US factory orders for May came in better than expected. The US dollar has been edging toward the 84.00 price gathering momentum daily on strong eco data and the possibility that the Fed’s will begin to taper sooner than later. Friday’s nonfarm payroll release will be one of the most closely watching economic events of the year.

A member of the Federal Reserve said Tuesday that even as the economy’s underlying fundamentals improve, the central bank isn’t yet ready to begin tightening monetary policy. William Dudley, President of the Federal Reserve Bank of New York, said that while it is likely the Federal Open Market Committee will begin phasing out a bond-buying program later this year, such a move should not be taken as a signal it plans to move forward any increase in short-term interest rates.

Unemployment fell in May from a year earlier in two-thirds of the nation’s 372 metropolitan areas, but 27 still had jobless rates in excess of 10%, the Labor Department said Tuesday. Eleven of these areas were in California, the country’s most-populous state, which continues to grapple with fallout from the housing-market downturn. El Centro, Calif., had one of the nation’s highest unemployment rates, at 22.8%, surpassed by Yuma, Ariz., at 30.8%. The Fed will rely on employment data heavily before decided to taper their programs as they have tied their monetary policy directly to the unemployment rate.

Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 964.69 tons, as on July 2. Hedge Fund and Money managers remain sidelined which continues to weigh on gold’s pricing. Silver holdings of ishares silver trust, increased to 9,961.42 tons, as on July 2 as the price of silver continue to climb trading this morning at 19.455 adding over 14 cents. Silver buyers were grabbing up the cheap metal when it bottomed at the 18 price level. This morning’s PMI data from China will weight on the metals family but it was services and non-manufacturing so it will not cause downward pressure. 

A Defiant President Morsi Sends Crude Oil Climbing

A Defiant President Morsi Send Crude Oil Climbing
A Defiant President Morsi Send Crude Oil Climbing

As the world watches a defiant President Morsi, told the military leaders and the protesters in the streets that he will not give up his office and that he stands behind the Islamic constitution and that he is the legal ruler of Egypt. His tone, sound much like that heard around the Middle East from Libya and Syria to Tunisia and other. Protesters in Egypt have been demanding the country’s democratically elected, Islamist president step down, saying he has not governed the country in an inclusive manor. The protests are the largest the county has seen since the 2011 uprising that ousted longtime dictator Hosni Mubarak. The protesters are upset that the government has been slow to implement changes and back the demands by the people a year ago when they ousted President Mubarak.

Oil production from Egypt is negligible, the country controls the Suez Canal and pipeline, which move about 4 million barrels of oil per day. Plus, the country is one of the largest and most powerful in the Middle East and North Africa — home to about a third of the world’s oil production. The fear of contagion in the Middle East to major oil producers is the ultimate concern as we saw during the Arab Spring that this unrest can easily spread. Compounding this to the present situation with protests and riots in Turkey and civil war in Syria and growing unrest in Libya, the Middle East is a tender keg which can ignite at any time.

Crude oil prices continue to soar this morning adding $.2.35 to trade at 101.94.

The shape of the U.S. crude futures curve shifted sharply on Tuesday, the latest sign of the dramatic changes the North American oil boom is having on trade in the world’s biggest market. Fundamentally, oil should be trading near historic lows with increased production and lack of demand.

South Sudan said on Sunday it had shipped its first oil cargo through Sudan to international markets since 2011, while its vice president visited Khartoum to defuse a row that threatened the cross-border flows vital to both.

Crude oil traded just below $98 a barrel on Tuesday, not far off a two week high, as positive U.S. economic data buoyed the fuel demand outlook in the world’s largest oil consumer. It was late in the day on Tuesday that Morsi spoke in Egypt sending crude prices soaring.

The strong US dollar did not even limit the climb in oil prices with the US dollar surging towards the 84.00 price level, its crosses are all trading in the red with the euro slipping under 1.30. However, improving euro-zone and German PMI numbers should limit the euro’s losses and may reflect in the afternoon session. Later today on a shortened day before the holiday the US will release its ADP employment change and trade balance number which are likely to improve and may support gains in the dollar. API is expected to release its weekly inventory data early due to the holiday as traders will wait for the EIA numbers later today.

Natural gas futures closed higher for the second straight session, as traders looked for hotter temperatures on the East Coast to prop up demand for the fuel in the coming weeks. Natural gas inventories are expected to increase by 70-75bn cubic feet, actual data will be released by EIA later in the day. Natural gas is trading at 3.648 giving back 10 pips of yesterdays gains.

 

 

 

Gold Continues To Recover From A Near 3 Year Low

gold 2 bnsGold continued to recover from a 34-month low, gaining for a third day, on speculation that lower prices will raise demand even as holdings in the largest bullion-backed exchange-traded product resumed a decline. Gold climbed to trade at 1258.05 adding $2.35 in the Asian session this morning. This morning, Asian equities are trading on a mixed note, the euro is on a stronger note and the dollar index is weaker.

US equities ended the first trading day of the month and quarter on a positive note, supported by improving ISM manufacturing numbers. American manufacturing rebounded in June as orders picked up, while factory reports across the global pointed to stabilization in the global economy. The Institute for Supply Management’s U.S. manufacturing index climbed to a three month high of 50.9 from 49 in May. Unemployment will fall to about 7 percent in the fourth quarter, according to economists at five of the world’s largest banks, creating more confusion among investors about the Federal Reserve’s bond-buying plans. The dollar index fell 0.10% against the majors and settled at 83.054 Europe’s unemployment rate declined to 12.1% from 12.2%, supporting gains in the euro, which settled at 1.3064 against the dollar, 0.42% higher.

World Bank President Jim Yong Kim is preparing an overhaul of the lender’s budget that he says could lead to “massive shifts” in funding to reflect changing priorities under his goal of ending extreme poverty by 2030. Thirteen of the world’s biggest investment banks were accused by the European Union of colluding to curb competition in the $10 trillion credit derivatives industry.

Gold gained over 1% on Monday after posting its biggest quarterly fall ever, as bearish economic data from China boosted bullion’s safe-haven appeal. Comments from US Federal Reserve officials on the need to maintain the bank’s stimulus measures for longer also helped gold recover some losses from last week when it fell 5% to three-year lows. Assets in the SPDR Gold Trust, the largest bullion-backed ETP, fell to 968.3 metric tons yesterday, the least since February 2009, after holding steady for three days. Money managers reduced their net-long position by 20 percent to the lowest since June 2007.

Fed Chairman Ben S. Bernanke said last month that the central bank may slow its bond-buying program this year should the economy continue to improve. Government data on July 5 is forecast to indicate U.S. employers continued to add jobs last month. U.S. markets are closed on July 4 for Independence Day.

Silver was at $19.605 an ounce from $19.635 yesterday. Platinum dropped 0.2 percent to $1,371.50 an ounce after gaining for three days. Palladium fell 0.3 percent to $684.10 an ounce after a three-day rally. Precious metals continue to trade on a positive note and should see a climb in industrial metals after strong manufacturing and factory data yesterday.

Crude Oil Prices Out Of Sync With Fundamentals

Oil 1 BNSWTI crude oil gained 8 cents on Friday to $97.13 a barrel, ending the quarter down 10 cents but up $5.31 from the close of 2012. On Friday, oil came under pressure from the stronger dollar as investors resumed pricing in the possibility that the Federal Reserve will begin to pare back its bond-buying program as soon as its September policy meeting. This morning oil is tumbling to trade at 96.18 as traders look closely at the fundamentals of supply and demand.

There is nothing including geopolitical tensions to support oil at this price, as speculators continue to push prices upwards on the back of positive economic data from the US. The other side of this argument is the Fed’s reduction in its asset purchases. Neither of these arguments supports prices above the 97.00 price level.

Positive data from Japan, which indicates that “Abeconomic” is working well, turning around the economic situation, with the Japanese Tankan release this morning reporting above expectations and last week’s long list of data releases showing success due to the aggressive monetary stimulus program of the Bank of Japan, might support the BoJ to add additional stimulus, which could support oil prices. On the other hand is data from China over the past month which shows a slowdown in the recovery of the world’s number two user of crude oil. Last week the government revised downward 2013 growth estimates to 7.5% from 7.7%. This morning Chinese PMI data was mixed, with the HSBC private report showed a decline in manufacturing and also reported below the 50 divider line, while the official government release reported slightly higher above the 50 number, but traders pay more attention to the HSBC report. New orders from abroad shrank in June for the third month in a row and at a rate that was the fastest since September as foreign clients, particularly those in Europe and the United States, cut demand for Chinese goods even after China’s producers passed on savings from lower material costs and discounted charges, HSBC said.

Crude oil futures are likely to witness some downward correction due to profit booking in the coming week after trading mostly firm in last few sessions, Benchmark crude oil contract on the New York Mercantile Exchange rose over 4% during the week to a high of $97.82 per barrel Friday. NYMEX oil prices gained due to release of upbeat economic data from the US that boosted hopes regarding improved oil demand, US consumer spending in May grew 0.3%, in line with market expectation. Besides, US weekly jobless claims fell by 9,000 to 346,000 in week ended Jun 22, while pending home sales hit a six-year high in May. Economic data from the US is crucial for the market, as it is the world’s major oil consuming nation. Other fundamentals for crude oil are not very supportive, as the weekly oil inventory report by the US Energy Information Administration showed a sharp rise in petrol stocks in the week ended Jun 21.

Natural gas continued to tumble as the month drew to a close, but rebounded a few pip on Monday morning, to trade at 3.597 well off its high just a month ago at the $4.40 level. Natural gas futures are continuously moving higher and in a swing pattern, forming higher‐highs and higher lows. But in last couple of months prices have just consolidated and indicated signs on correction. As summer sets in, the weather has not been hot enough to send residential use higher but inventories remain at their peak leaving natural gas demand lower and pulling down prices.

 

Metals Recover A Bit On Bargain Shopping

Metals Recover A Bit On A Weaker USD
Metals Recover A Bit On A Weaker USD

Gold prices recovered some of their losses after U.S. first quarter economic growth was revised lower. Gold is trading at 1235.25 gaining $5.45 this morning. The US’s gross domestic product, the broadest measure of all goods and services produced in the economy, grew at a 1.8% annual rate between January and March, the Commerce Department said Wednesday. This was less than earlier readings and below the 2.4% gain forecast by economists.

Gold yesterday dropped sharply and hit 3-year lows, on growing expectations that the US Federal Reserve will slow the pace of economic stimulus later this year and continued liquidation from ETF’s.  Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 969.5 tons, as on June 26.

Silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 9,890.87 tons, as on June 26. The US dollar index, which measures the greenback against six other major currencies, rose to 82.964 from 82.553 on late Tuesday in North America. The dollar index posted its sixth straight session of gains. The USD eased a bit in the Asian session.

Eurozone bonds rose across the board, after European central bankers reassured markets they would keep exceptional monetary policy measures for the foreseeable future. The euro pared some of the losses against the dollar, after final data showed US gross domestic product growth was more tepid than previously estimated in the first quarter, but was held back by a moderate pace of consumer spending, weak business investment and declining exports. The People’s Bank of China said on late Tuesday, it had provided cash to some institutions facing temporary shortages and would continue to do so if needed.

Industrial metals prices slipped yesterday however, recovered some ground on concerns about the outlook for demand from top consumer China as moves by the country’s central bank to ease fears of a credit crunch failed to fully reassure investors. Industrial metals prices are trading higher on international bourses today. Traders can expect a further rise in the prices of metals on account of bargain hunting at lower levels. Silver is trading at 18.733 recovering along with gold this morning as buyers continue to take advantage of low prices.

Copper is trading at 3.057 trading in the green as traders take advantage of the weakened US dollar. The dollar declined by a few pips making low priced commodities a special appealing. Copper closed lower on the London Metal Exchange yesterday, weighed by concerns over Chinese metals demand and a weaker-than expected reading on U.S. economic growth.

Bargain Hunters Buy Silver Dump Gold

Bargain Hunters Buy Silver Dump Gold
Bargain Hunters Buy Silver Dump Gold
Gold is trading at 1277.65 while silver is trading at 19.545 this morning. Gold fell in New York as prospects that the Fed Reserve will reduce monetary stimulus curbed demand for the metal as a protection of wealth. Silver also slipped and platinum plunged to the lowest since November 2009. Traders will be closely watching todays slew of US data, which could give direction to the Federal Reserve decision as to when to begin tapering its programs. Traders will see durable goods orders and housing data which are both expected to print higher than forecast. The rest of the trading day should remain quiet and focused on news flow as there is very little data due out before the North American session.

This morning, most of the Asian equity markets are trading on the higher side, barring the Chinese markets which are down more than 4.5% on the back of concerns caused by the credit crunch. The subsequent announcement by the People’s Bank of China that it may not inject liquidity further added to the concerns. The euro is trading flat at 1.3120. The dollar index is also trading flat at 82.45. There are no major economic data releases expected from the euro-zone. However, a string of data releases from the US in the evening such as durable goods orders, the S&P Case Shiller home price index, House price index, consumer confidence index and new home sales are expected to be positive, which may support the dollar index.

Gold futures saw renewed selling pressure on Monday, as global equity markets fell on concerns over tightening credit conditions and growth worries in China. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 985.73 tons, as on June 24 while silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 9,881.87 tons, as on June 24. Silver traders are taking advantage of the tumble in prices to buy on the cheap, which is helping to limit losses.

Copper closed at its lowest level in almost three years on the London Metal Exchange Monday as investors cashed out of base metals amid a continuing credit squeeze in top metals consumer China. At the close, LME three-month copper was 2.2% lower on the day at $6,670 a metric ton. The metal earlier tumbled 3.0% to $6,613 a ton, its lowest price since July 2010. Aluminum closed 1.2% lower at $1,771 a ton.

Gold, Silver And Copper Remain Weak

Gold, Silver And Copper Remain Weak
Gold, Silver And Copper Remain Weak
Friday was a volatile trading day in Europe and the Americas, while European shares rebounded before turning down and closing lower on Friday. This followed a heavy sell-off in the previous session. Wall Street finished mixed in volatile trading Friday, with major averages putting an end to two days of heavy losses triggered by Fed Chairman Ben Bernanke’s comments that the central bank may scale back its asset purchases later this year. The FOMC concluded its two day meeting and did pretty much as expected and Mr. Bernanke’s comments were pretty much as expected, it was trader’s reactions that were not as expected. Mr. Bernanke tried his best to give traders a clear understanding of the Fed’s position, which seemed to allow traders to open their minds to more possibilities instead of less surety.

Gold and silver tumbled with gold trading below the 1300 price range and silver below the 20.00 price range to close the week. The downtrend continues this morning with gold trading at 1290.35 and silver at 19.85 while the USD climbed to trade at 82.87 after hitting a high of 82.92 gaining 0.32% in early trading. The US Fed also lowered its inflation forecast sharply for 2013 which further hurt gold’s inflation hedge appeal, as gold is thought to be a hedge against growing inflation.

Hedge funds and money managers slashed their bullish bets in gold futures and options for a second consecutive week to the lowest level in a month. Gold prices closed slightly higher on Friday, but swung to a weekly loss of nearly $100 per ounce, fueled by rising expectation of slowing the Federal Reserve’s bond purchases later this year. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 989.94 tons, as on June 21. Silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 9,983.92 tons, as on June 20.

The CME, which owns the NYMEX’s metals trading COMEX division, said that it would hike initial and maintenance margins for gold by 25%, after Thursday’s sell-off.

Silver has tumbled as precious metals declined along with industrial metals after Chinese HSBC PMI data reported below expectations. Activity in China’s vast factory sector decelerated further in June, a private survey of Chinese manufacturers showed on Thursday, casting a pall on markets and stoking further concerns over the health of the world’s second largest economy. The closely-watched flash estimate of the HSBC China Purchasing Manager’s Index (PMI) fell to a nine-month low of 48.3, worse than the final reading of 49.2 in May when the index moved into contractionary territory for the first time in seven months. A reading above 50 indicates expanding activity and one below 50 signals contraction.

Copper prices recovered slightly from 20-month low on Friday, but closed in negative for the third straight week on fears of a slowdown in China’s economic growth. Copper futures for July delivery closed up by 1.3% at $3.1 on the COMEX division of NYMEX. Chinese refined copper imports rose to 232,155 tons in May from April’s 183,023 tons and 301,990 tons a year ago, down 23.15% year on year, as per the customs data.

 

Precious & Industrial Metals Trade At Record Lows

Precious & Industrial Metals Trade At Record Lows
Precious & Industrial Metals Trade At Record Lows
 Gold fell below the $1,300-an-ounce mark while July silver contract fell to a 33-month low today. The falling spree was fueled by Federal Reserve chief Ben Bernanke’s remarks that the central bank might begin pulling back its bond buying program if the US economy continued to improve as per the bank’s estimates.

Gold prices continued to fall on Bernanke’s comments that Fed is likely to slow the pace of the central bank’s bond purchases later this year and bring them to a halt around mid-2014.

CME has increased the margin requirements by 25% on gold trading after prices fell to the lowest since September 2010. SPDR Gold Trust, the largest gold-backed exchange-traded fund’s holdings fell 0.42 percent to 995.35 tons on Thursday from 999.56 tons on Wednesday.

Gold and silver futures closed at their lowest levels in more than 2-½ years, a day after Federal Reserve Chairman Ben Bernanke said the central bank could move as early as this year to slow the flow of monetary stimulus to the economy.

The dollar advanced to a 2-week high against major currencies on Thursday, and looked likely to extend gains after the Federal Reserve signaled it would begin withdrawing its stimulus programs this year, as US economy improves. The ICE dollar index, which tracks greenback’s performance against six rivals, rose to 81.823 from 81.301 on late Wednesday in North America, and traded as high as 82.14. Fed Chairman Ben Bernanke said US economy was growing fast enough to allow the central bank to trim its $85bn monthly stimulus, with the goal of ending it in mid-2014.

The Eurozone and the International Monetary Fund said Greece is assured of sufficient international aid next month as long as the country presses ahead with its economic-overhaul program. Gold prices overall will continue to remain downside on stimulus withdrawal concerns and outflows from gold exchange traded funds. However short covering can keep prices in range for the day.

Silver tumbled below $20 to trade at 19.745 as precious metals traded on a weak note along with industrial metals, after lackluster Chinese data spooked the markets. Industrial metals prices fell to its lowest level in 20 months; hit by further evidence that the economy of top metals consumer China is slowing down and the U.S. Federal Reserve’s stated intention to begin scaling back stimulus measures later this year.

Copper fell to its lowest level in 20-months, hit by evidence that the economy of top metals consumer China is slowing down. Copper inventories rose for the fifth consecutive day to 643,125 tons – the highest level since July 15, 2003. But it was cancelled warrants that saw the biggest jump, up 48,975 tons to 297,975 tons a fresh all-time high

Gold and Silver Take A Serious Tumble

Gold and Silver Take A Serious Tumble
Gold and Silver Take A Serious Tumble

Federal Reserve Chairman Ben Bernanke tried to carefully explain how the central bank will figure out when it’s the right time to pull back on its monthly bond purchases, but investors didn’t have any of it. The Dow Jones tumbled more than 200 points, or 1.4%, on Wednesday afternoon after Bernanke took questions from the media about the Fed’s exit strategy. S&P 500 also dropped 1.4% and NASDAQ sank 1.1%. Stocks had been in the red all day, but were barely below the break-even line before the Fed chairman began speaking. The Federal Reserve left interest rates unchanged and said it would continue with its current bond purchase program – $85 billion in mortgage-backed securities and Treasuries each month – for the foreseeable future. But during his press conference, Bernanke highlighted scenarios in which the Fed would consider tapering.

Commodities tumbled; the US dollar soared while gold took the biggest hit on Thursday morning. Mr. Bernanke’s comments did not come until late in the day, so many markets are reacting this morning. Crude oil seemed to be frozen after the EIA inventory showed higher than expected stocks, while gold seemed stuck after the decision. This morning gold has tumbled close to $28. to trade at 1346.05 as traders digest Mr. Bernanke’s comments. Silver suffered bigger losses to trade at 21.16 down by 46 cents after Chinese data disappointed markets with HSCB PMI data showed a continued contraction in manufacturing weighing heavily on industrial metals. China’s factory activity weakened to a 9-month low in June as demand faltered, a preliminary survey showed, and heightening risks that a second quarter slowdown could be sharper than expected

After market closing hours gold prices fell on Bernanke’s comments that he expects to slow the pace of the central bank’s bond purchases later this year and bring them to a halt around mid-2014. Fed also lowered its inflation forecast sharply which hurt gold’s inflation hedge appeal. SPDR Gold Trust, the largest gold-backed exchange-traded fund’s holdings fell below 1000 tonnes for the first time in 4 years to 999.56 tons. Demand in India has fallen off since the government hiked the import duty on bullion. China demand has slowed from peak levels seen earlier in the year. Gold prices internationally are expected to go down on rising bond yields and low inflation expectations in US. A stronger dollar internationally can further weigh on prices. The dollar is climbing steadily this morning trading at 81.78. Gold fell for a fourth straight session on Thursday to its lowest level since a 15% plunge in mid-April, after the US Federal Reserve signaled it would slow the pace of bond purchases later this year.

A scale-back of the $85 billion monthly asset purchases is likely to weaken support for gold prices, already down about 20% this year due to rapid outflows from exchange-traded funds and slowing demand in top consumers, India and China. Fed chairman Ben Bernanke said on Wednesday the central bank will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year if the US economy continued to show strength.

Until recently, gold – seen as a hedge against inflation – had gained as the global economy took a hit and central banks acted to boost their economies. Gold touched an all-time high of $1,920.30 in 2011.

Stock Markets Prepare For Mr. Bernanke

Stock Markets Prepare For Mr. Bernanke
Stock Markets Prepare For Mr. Bernanke
Let’s face it, speculators, analysts, economists as well as anyone associated with the world of finance is being blinded by the upcoming Federal Reserve decision and statement by Mr. Bernanke due later today at the conclusion of their two day meeting. Since mid-day yesterday the news flow and traders actions have all been in preparation to today’s big speech. U.S. Treasuries were little changed before the Federal Reserve started their two-day policy meeting at which investors will be looking for signals as to when the central bank will begin to slow bond purchases.

The US markets showed a strong upward move on Tuesday, adding to the gains posted in the previous session. The rally came despite the uncertainty ahead of Federal Reserve’s announcement on Wednesday. The strength on US markets was bolstered by a report from the Commerce Department which showed a notable rebound in housing starts in the month of May. The report said housing starts climbed 6.8% to a seasonally adjusted annual rate of 914,000 in May from the revised April estimate of 856,000. The Dow gained 138 points, or 0.9%. That marks the sixth day in a row that the Dow moved up or down more than 100 points. The S&P 500 edged up 0.8%, while NASDAQ added 0.9%.  A report on consumer prices showed that inflation remains subdued. European markets were mixed on Tuesday, as they awaited the outcome of U.S. Federal Reserve’s meet on quantitative easing. European shares closed mixed on Tuesday, after better-than-expected economic data from Germany.

The Federal Reserve is due to end a pivotal two-day meeting later today. Markets are keenly waiting to see if Chairman Ben Bernanke comments on when and how the Fed will start reducing the third round of its bond-buying program known as “quantitative easing”. Foreign institutional investors have been sellers of Indian shares for five consecutive sessions, totaling 28.95 billion rupees, according to exchange and regulatory data. It seems that Investors may continue to use rallies to lighten their positions ahead of Fed’s decision. However, the unemployment level in the Unites States is still above 7 percent, indicating that Fed pulling out in the near future is unlikely.

This morning the Asian indices are trading on a mix note. The Nikkei and Taiwan are up by 1.9% and 0.2% respectively. However, the Shanghai and the Hang Seng are trading lower by 1.1% and 0.6% respectively, while the Strait Times and the Kospi are down by 0.1% and 0.7% respectively. Japan posted a merchandise trade deficit of 993.916 billion yen in May, the Ministry of Finance said on Wednesday – slipping into the red for the 10th consecutive month. The headline figure beat forecasts for a shortfall of 1.22 trillion yen following the downwardly revised deficit of 881.9 billion yen (originally 879.9 trillion yen) in April. Exports surged 10.1 percent on year to 5.767 trillion yen, topping forecasts for a gain of 6.4 percent after adding 3.8 percent in the previous month. Exports to China added 8.3 percent on year to 1.046 trillion yen

Gold Range Bound While Silver Climbs

Gold Range Bound While Silver Climbs
Gold Range Bound While Silver Climbs
Gold is trading flat this morning following yesterday’s trend. Gold remains in a tight range from 1380 to 1385. Gold and silver futures declined on Monday, as traders positioned themselves ahead of a Federal Reserve policy meeting that begins later today and that will be closely watched for clues to the central bank’s next monetary-policy step. Gold is 17 percent lower this year, tumbling into a bear market in April, as some investors lost faith in bullion as a store of value, and on concern that the Fed may taper asset purchases. The central bank, which begins a two-day meeting today, currently buys $85 billion a month of Treasury and mortgage debt. The US Federal Reserve meets today with speculation rife of an imminent paring of pumping cash into the economy. The US Fed buys treasury and other bonds worth $85 billion every month. The speculation has already resulted in the dollar gaining slightly this morning.

Although traders are fairly sure that the Fed will continue its current policies and hold rates in the near term, they are looking for Mr. Bernanke to give guidance into the future tapering of the Fed asset purchase plan. Traders are expecting Mr. Bernanke to indicate that the FOMC would consider beginning its tapering plan at its next meeting.

The majority of U.S. homebuilders view conditions in the industry as favorable for the first time since the start of the housing crisis seven years ago, with an industry report showing confidence in the sector surged in June.  Any scale-back of the stimulus would hurt gold, which is typically seen as a hedge against inflation. Bullion is down 17 percent so far this year as investors have shunned its safe-haven appeal, while global stocks have rallied.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, stood at 1,003.17 tonnes on Monday — their lowest in more than four years. Moreover, reports suggest that physical buying in Asia may be waning as well. Gold imports into India, the world’s No. 1 gold consumer, are plunging following the government’s move to increase import duties from 6% to 8% earlier this month, according to sources. The most recent increase in duties on gold, curbing of gold financing and restrictions on gold imports by banks and state-run trading companies to a consignment basis in India have led to the expected short term decline in demand which may be contributing the gold’s inability to close above $1,400/oz.

Silver this morning is diverging from gold, although there is not shift in fundamentals to support price movement in industrial or precious metals. The lower US dollar and the low price for silver, which was trading at the bottom of the 21.00 range made the metal attractive to buyers looking for deals on the bottom. Silver has gained 67 points to trade at 21.825.

 

Turkey and Syria Drive Oil Prices

Turkey and Syria Drive Oil Prices
Turkey and Syria Drive Oil Prices
On Tuesday morning WTI crude oil is trading on a positive bias but flat to Monday’s close. WTI crude traded near the highest price in more than 4 months at 98.07, before a government report that will probably show U.S. stockpiles declined and refinery rates increased. The dollar strengthened against the majority of its 16 most traded counterparts amid speculation about when the Federal Reserve will begin to taper its monetary stimulus.

Geopolitical tensions are the only supporting factor for crude oil which is trading well above its expected range. Crude oil futures hit a 9-month high near $99 per barrel, but reversed gains to close lower, as investors turned cautious ahead of the start of the US Federal Reserve’s two-day policy committee meeting on Tuesday. Brent crude oil futures touched a 10-week high of around $107 per barrel, as tensions in the Middle East rose, but prices finished slightly lower for the day after a late sell-off in US gasoline futures.

Syria on Monday dominated the start of the Group of Eight summit in Northern Ireland amid fears of a broader Middle East conflict. Prices jumped last week after US officials said they had evidence of the use of chemical weapons by forces backing Syrian President Bashar al-Assad and signaled that Washington could begin arming the opposition. Concern over events in Turkey, which warned on Monday that it may bring in the army to help quell nearly three weeks of nationwide anti-government protests helped add to the volatility of crude oil.  Tensions between the U.S. and Russia over the Syrian Civil War helped boost oil prices. The U.S. West Texas Intermediate benchmark rose as high as $98.74 a barrel in intraday trade, clearing a February high and hitting its highest mark since September.

Data due out later today are projected to show U.S. commercial crude-oil stocks declined 1 million barrels for the week ended June 14, according to a survey of analysts. The decline is expected to stem from a reduction in crude-oil imports, which have been volatile recently.

The American Petroleum Institute is scheduled to issue its weekly report. More closely watched figures from the U.S. Energy Information Administration (EIA) are due tomorrow.

A drawdown of 1 million barrels would be “more than double seasonal norms,” with the EIA’s five-year average showing oil stocks typically fall by about 400,000 barrels during this reporting period, according to Platts. Reports on crude-oil inventory released last week were bearish, with both the API and EIA reporting supply increases, even as analysts had expected no change in inventory levels.

Natural gas seems to be overshadowed by political tensions and the FOMC meeting and remains flat at 3.889 subject to the whims of the weather forecasts. Natural gas futures rose almost 4%, lifted by forecasts for hot weather in the coming weeks and a possible tropical storm in the Gulf of Mexico.

Crude Oil Supported By Geopolitical Tensions But Limited By Fundamentals

Crude Oil Supported By Geopolitical Tensions But Limited By Fundamentals
Crude Oil Supported By Geopolitical Tensions But Limited By Fundamentals

Press coverage that US had authorized sending US weapons to Syrian rebels increased the tensions regarding Middle East and fear of supply glitch and pushed crude oil prices higher. The increased geopolitical tensions sent crude oil skyward. President Barack Obama authorized arming rebels in Syria after the White House said it had proof the Syrian government had used chemical weapons against them. Crude oil climbed on Friday to trade slightly above the 98.00 price level. This morning the commodity has eased by 20 cents trading at 97.88. WTI crude rose to a four-month high after President Obama was said to authorize arming Syrian rebels groups, ratcheting up tensions in a region home to about a third of the world’s oil supply. Western diplomats said the United States is considering setting up a no-fly zone in Syria, which would represent its first intervention in that civil war, after the White House said Syria had crossed a “red line” by using nerve gas.

Also reports that a pipeline burst between US and Canada which could crate temporary supply glitch also supported price increases for WTI crude oil. Although supplies in the US are abundant at this time, the delay should not cause any attention in the markets in the long term.

The US Dollar on Friday pared gains versus the euro after a survey showed U.S. consumer sentiment retreated this month after reaching its highest in nearly six years in the previous survey.

US shale production forecasts and Chinese demand fears were weighing on energy demand earlier in the day. Other commodities were dented somewhat by weak Chinese data and after the World Bank slashed its growth forecast for China’s economy this year to 7.7 percent from 8.4 percent. Markets were also roiled by fears of central banks pulling the plug on their extraordinary stimulus measures that are aimed at supporting global economic growth.

US shale oil extraction continues at very high levels, and the Energy Information Administration nearly doubled its estimates for US shale oil reserves from 32 billion barrels to 58 billion barrels. This, added to the Chinese economy suffering from a slowdown in growth rates and high US oil stockpiles, pulled oil back down to below 95.00 per barrel on Tuesday. However, since that point, the market has rebounded sharply on growing worries about the oil-rich Middle East.

Natural gas fell, on signs of rising supplies and little chance of a jump in near-term demand as moderate temperatures hold across much of the US. Natural gas is trading at 3.763 recovering almost 20 cents this morning. U.S. natural gas futures ended lower as cooler US weather forecast in US reduced Air Condition demand in Natural Gas. Natural Gas is expected to move further down over further milder weather and excess inventories. Front-month gas futures on the New York Mercantile Exchange ended down 8.1 cents, or 2.1 percent, at $3.733 per million British thermal units after trading between $3.729 and $3.83