Commodities Weekly: Gold climbs to near 14-month high

 

Treasured metals

GOLD costs touched the best since April 2018 final Friday, finishing the most effective weekly advance in additional than three years. Protected haven shopping for amid progress considerations and central financial institution shopping for for reserves diversification helped sentiment. Shopping for reversed yesterday after Trump introduced a suspension of Mexico tariffs.

The continuing US-China tariff warfare is elevating considerations in regards to the path of future international progress whereas information out of China confirmed that it elevated its gold reserves for a sixth consecutive month in Could. The reserves now stand at 1,916 tonnes, in response to a Monetary Instances report.

Speculative traders stay satisfied that additional positive aspects are doable as they boosted web lengthy positions to the best since April final yr, in response to the newest information snapshot as at June four from CFTC.

Gold Day by day Chart

Supply: OANDA fxTrade

SILVER suffered the most important one-day decline since March 1 yesterday as threat urge for food was given a leg up by Trump’s Mexico tariff announcement. The gold/silver (Mint) ratio touched a document excessive of 90.56 yesterday.

Extra not too long ago, speculative traders had been inspired by silver’s rebound from this yr’s lows and turned web consumers within the newest reporting week to June four. That was the primary time in 5 weeks they shifted to web consumers, however total they’re nonetheless positioned web quick.

PLATINUM superior for the primary time in seven weeks final week, halting a slide that had seen the commodity fall as a lot as 13.eight% from its April peak. The bounce is seen extra corrective in nature, for the reason that international automobile market remains to be within the doldrums, decreasing demand for the metallic in catalytic converters. The current weak point has seen speculative traders trimming web lengthy positions for 5 consecutive weeks, and they’re now on the lowest for the reason that week of February 19.

PALLADIUM closed above the 55-day shifting common for the primary time since March 26 yesterday because the metallic prolonged its current rebound to a 3rd day. Speculative accounts stay bullish on the commodity, rising web lengthy positions for a 3rd week within the week to June four, the newest information from CFTC exhibits.

Base metals

Rising hopes that the US and China will edge towards a commerce deal earlier than the G-20 summit on the finish of this month have helped COPPER rebound from five-month lows this week. Copper costs touched the bottom since January four final Friday, however are actually 2.7% increased at 2.6647.

The most recent customs information out of China confirmed that copper imports in Could totaled 361,000 tons, 23% decrease than a yr in the past. In the meantime, Chile reported that its exports had been 11% increased in greenback phrases from April at $three.1 billion.

Within the week to June four, speculative traders had been web sellers for a seventh straight week they usually elevated their web quick positions to probably the most for the reason that week of January 15, the newest CFTC information exhibits.

Vitality

Saudi Arabia and Russia voiced considerations yesterday that falling CRUDE OIL demand may push costs under $40 per barrel. Saudi Arabia’s power minister stated that OPEC is nearly unanimous on extending manufacturing cuts, presumably to the tip of the yr, although Russia is reportedly holding again on a ultimate settlement, although Russia’s power minister warned of oversupply yesterday.

Newest customs information from China confirmed crude oil imports had been down eight% month-on-month in Could, whereas Friday’s information confirmed the variety of US oil rigs in manufacturing fell for a fourth week in 5 as at June 7. That’s the least variety of rigs since February 2018. Speculative accounts trimmed web lengthy positions for a sixth week to June four, and they’re now at least for the reason that week of March 12.

WTI Day by day Chart

Supply: OANDA fxTrade

NATURAL GAS appears to be like poised to increase the present rally to a 3rd straight day at this time. That may be the longest rising streak in a month as traders stability climate forecasts which present some above- and a few below-normal temperatures throughout the US for the interval June 15 to 19. Weekly pure gasoline inventories information from the EIA confirmed one other weekly add to stockpiles final week. That makes it the 10th week in a row that inventories have elevated.

China’s Liquefied Pure Fuel (LNG) imports in Could rose 2.three% from a yr earlier to 10.43 billion cubic meters, which introduced the January to Could complete to 54.37 billion cubic meters, a 13.four% bounce from the identical interval the earlier yr.

Agriculturals

WHEAT costs proceed to consolidate a four-week meteoric rise which noticed the commodity attain ranges not seen since February 6. The commodity jumped 27% from Could 13 to June four, to hit 5.222. It’s now at four.981.

The availability facet is trying a bit blended, with rain showers in China’s north presumably affecting harvests, whereas the newest report from the US Division of Agriculture, Overseas Agricultural Service (FAS), sees Russian output rising within the present season.

Speculative traders scaled again their bearish bets to the bottom for the reason that week of February 12, in response to information as at June four from CFTC.

SOYBEANS have failed to increase the constructive momentum that pulled costs from greater than decade lows. Upward momentum was misplaced final week for the primary time in 4 weeks, and the commodity once more failed to shut above the 55-week shifting common, which is at eight.73 now, because it has completed since Could final yr.

Could customs information from China present that soybean imports had been down 24% year-on-year at 7.36 million tons, the bottom complete in 4 years for the month of Could, because the swine fever that has gripped the nation for the previous few months has lower the demand for soy in animal feed.

Soybeans Weekly Chart

Supply: OANDA fxTrade

CORN’s three-week rally got here to an finish final week and the commodity is now consolidating the advance to a close to three-year excessive. The U-turn may have been instigated by a USDA report from the FAS, which recommended Brazil was near realizing document manufacturing within the 2019/20 season. The identical report estimated that Thai manufacturing can be decrease throughout this season resulting from a pest infestation in a few of the crops.

Speculative traders have been well-positioned for the current rally, including to web lengthy positions for a fifth straight week. Web longs are actually on the highest for the reason that week of June 19 final yr.

SUGAR has been grappling with technical resistance on the 100-day shifting common at zero.1240 for the reason that latter a part of final week. Costs have didn’t commerce above the common since April 25. Speculative traders had been web consumers of the commodity for the primary time in six weeks, in response to the newest information from CFTC as at June four.

This text is for normal info functions solely. It’s not funding recommendation or an answer to purchase or promote securities. Opinions are the authors; not essentially that of OANDA Company or any of its associates, subsidiaries, officers or administrators. Leveraged buying and selling is excessive threat and never appropriate for all. You could possibly lose all your deposited funds.

A seasoned skilled with greater than 30 years’ expertise in overseas trade, rates of interest and commodities, Andrew Robinson is a senior market analyst with OANDA, answerable for offering well timed and related market commentary and dwell market evaluation all through the Asia-Pacific area. Having beforehand labored in Europe, since shifting to Singapore he labored with a number of main establishments together with Bloomberg, Saxo Capital Markets and Informa World Markets, proving FX methods based mostly on a mixture of technical and basic evaluation in addition to market stream info. Andrew started his profession as an FX vendor with NatWest and the Royal Financial institution of Scotland within the UK.

Product categories

X