Commmodities

[Muthukali]

Hedge Funds Cut Wagers as Fed Signals Less Stimulus: Commodities

Hedge funds reduced bullish bets on commodities for a second consecutive week as the Federal Reserve signaled it may refrain from more monetary stimulus, increasing concern that growth will slow and curb demand for raw materials.

Money managers lowered net-long positions across 18 U.S. futures and options by 2.8 percent to 1.1 million contracts in the week ended April 3, data from the Commodity Futures Trading Commission show. Bets on higher corn prices fell to the lowest since February, while those on hogs dropped by the most since May. Speculators cut wagers on costlier crude oil for a third week, and are now the least bullish in two months.

Minutes from the March 13 Fed policy meeting released April 3 showed policy makers will probably hold off on increasing monetary accommodation unless the U.S. economic expansion falters. The Standard & Poor’s GSCI gauge of 24 commodities rose more than 80 percent from December 2008 to June 2011 as the central bank set rates at a record low and bought $2.3 trillion of debt in two rounds of quantitative easing. The U.S. economy will accelerate this quarter and the next, economist estimates compiled by Bloomberg show.

“The market is addicted to stimulus,” said Jeffrey Sica, the Morristown, New Jersey-based president of SICA Wealth Management who helps oversee $1 billion of assets. “This market has risen because of the liquidity push and the market will decline when it’s deprived of liquidity.”

Steepest Decline
The S&P GSCI index rose less than 0.1 percent last week after tumbling 2 percent the day after the Fed minutes were released, the steepest decline since mid-December. Cocoa, cotton, wheat and gold led the declines as corn, nickel and soybean futures advanced. The MSCI All-Country World Index of equities slid 1.6 percent, and Treasures returned 0.2 percent, a Bank of America Corp. index shows.

Goldman Sachs Group Inc.’s commodity research team, led by Jeffrey Currie in London, cut its three-month recommendation on raw materials to “neutral” on March 28, warning that the economy will “soften” this quarter. The S&P GSCI retreated 0.9 percent since then.

Bank of America Merrill Lynch’s team, led by Francisco Blanch in New York, retained an “overweight” recommendation April 2, citing the risk that conflict over Iran’s nuclear program will drive energy prices higher. Central banks are extending the provision of liquidity and cutting interest rates to shore up growth, the team wrote in a report to clients.

Emergency Stimulus
The Fed has pledged to keep interest rates near zero through 2014, and the European Central Bank kept its key rate at a record low of 1 percent on April 4. ECB President Mario Draghi quashed talk of an early exit from emergency stimulus measures the same day. The ECB has expanded its balance sheet by about 30 percent since November, pumping more than 1 trillion euros ($1.3 trillion) into the banking system.

“As long as there is loose monetary policy and the world shows net growth, commodity prices will remain firm,” said Michael Cuggino, who helps manage about $15 billion of assets at Permanent Portfolio (PRPFX) Funds in San Francisco. “The demand for commodities is unlikely to weaken.”

The U.S. added 120,000 jobs in March, the smallest increase in five months and less than the most pessimistic estimate in a Bloomberg survey of economists, a Labor Department report showed April 6. The economy will expand 2.2 percent this quarter and 2.5 percent in the next, compared with 2 percent in the first three months of the year, according to the median of 74 economist estimates compiled by Bloomberg.

Open Market
The jobs data may help build a case for further easing at the June meeting of the Federal Open Market Committee, said John Silvia, the chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. U.S. commodity markets were shut on the day of the report for the Good Friday holiday.

Bets on a copper rally rose 25 percent to 18,642 contracts in the week ended April 3, the highest since early August, the CFTC data show. Inventories of the metal monitored by the London Metal Exchange tumbled 29 percent this year. Demand will exceed supply by 13,000 metric tons this year, and the deficit will widen to 17,000 tons in 2013, analysts at Morgan Stanley led by Hussein Allidina in New York said in a report April 2.

Investors put $79 million into commodity funds in the week ended April 4, the same amount as a week earlier, according to Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Open interest, or contracts outstanding, across the 24 commodities in the S&P GSCI advanced 1.9 percent, advancing for a second consecutive week and taking this year’s expansion to 19 percent, data compiled by Bloomberg show.

Arabica Coffee
Bullish soybean wagers rose 12 percent to 235,387 contracts, the highest since Bloomberg began compiling the data in June 2006. A U.S. Department of Agriculture report may show this week South American crops will be smaller than forecast after drought, according to a Bloomberg survey of analysts. Soybeans jumped 2.2 percent to $14.34 a bushel last week as arabica coffee added 0.3 percent to $1.83 a pound. Soybeans for May extended gains today, advancing 0.8 percent to $14.45 at 9:09 a.m. in Singapore.

Copper fell 1 percent last week on the LME, paring this year’s advance to 10 percent. Growth in China, the world’s biggest metals consumer, will slow to 8.3 percent this year, from 9.2 percent in 2011, according to the median of 11 economist estimates compiled by Bloomberg. Premier Wen Jiabao cut the nation’s growth target to 7.5 percent last month, the lowest since 2004.

Extra Policy Easing
A purchasing managers’ index for the Chinese services industry dropped to 53.3 last month, from 53.9 in February. Readings above 50 indicate expansion. The country needs extra policy easing to spur growth and the rest of Asia “urgently” needs the nation’s economy to turn, Frederic Neumann, an analyst at HSBC Holdings Plc in Hong Kong, said in a report April 3.

“China is in a very precarious state and it could easily turn into a hard landing,” said Stanley Crouch, who helps oversee $2 billion of assets as chief investment officer at New York-based Aegis Capital Corp. “If you look at all the interventions the Fed and ECB have undertaken they have not great results to show. We are going to probably have a big correction because of China’s hard landing.”

 

[Muthukali]

Gold prices for Tuesday - Thailand

The Gold Traders Association this morning set the buying price at 23,755.72 baht per baht-weight for gold ornaments and 24,100 baht per baht-weight for gold bar.

The selling prices were set at 24,600 baht per baht-weight for gold ornaments, and 24,200 baht per baht-weight for gold bar.

 

[Muthukali]

New rules set to eliminate many gold traders in Vietnam

Thousands of gold shops in Ho Chi Minh City will have to stop trading bullion due to tightened regulations set to take effect next month, an industry group has said.

Most of the 2,000 gold shops in the city are small, with less than VND10 billion in capital, and will not be able to meet the new requirements, said Nguyen Van Dung, chairman of the Saigon Jewelry Association in Ho Chi Minh City.

Under a new government decree, bullion traders are required to have at least VND100 billion (US$4.8 million) of registered capital, a minimum annual tax payment of VND500 million, and a presence in at least three provinces or major cities.

Tran Thanh Hai, general director of gold investment firm VGB, said only banks and large gold traders will be qualified to continue trading bullion.

But Hai warned that many gold companies have been doing business with banks and will continue to “hide” behind those banks in order to buy and sell gold, despite the new regulations.

The new decree, effective May 25, also gives the State Bank of Vietnam complete control over gold bar production as well as the export and import of materials for casting bullion. It bans using gold as a means of payment.

Most of the 2,000 gold shops in Ho Chi Minh City are small, an industry group says.

 

[Muthukali]

Gold prices for Wednesday - Thailand

The Gold Traders Association this morning set the buying price at 23,846.68 baht per baht-weight for gold ornaments and 24,200 baht per baht-weight for gold bar.

The selling prices were set at 24,700 baht per baht-weight for gold ornaments, and 24,300 baht per baht-weight for gold bar.

 

[Muthukali]

Vietnam’s central bank to license gold bar traders just once

The State Bank of Vietnam has said there will be a one-time issuance of licenses to gold traders that can meet its new requirements for bullion trading, giving other companies six months to quit the business.

The central bank will license the import and export of gold materials whenever necessary, but gold bar trading licenses will only be issued once, according to guidelines published on the government’s website last week.

The guidelines came after the goverment introduced a new decree which will tightened regulations on the trading of gold bars from May 25. Bullion traders will be required to have a registered capital of at least VND100 billion (US$4.8 million), a minimum tax payment of VND500 million, and a presence in at least three provinces or major cities.

All existing gold traders are allowed to continue buying and selling gold bars for six months after the decree comes into effect.

Nguyen Quang Huy, head of the central bank’s foreign exchange department, told news website VnExpress that a time frame of more than seven months is enough for businesses to either apply for new licenses or switch to other business lines, including jewelry trading.

Under the new decree, the central bank will have complete control over gold bar production as well as the export and import of materials for casting the bullion.

But Huy said there will be no discrimination against any brand of gold bars, adding that all bullion in the market will continue to be traded normally.

Existing gold traders are allowed to continue buying and selling gold bars until the end of November.

 

[Muthukali]

Gold prices for Thursday - Thailand

The Gold Traders Association this morning set the buying price at 23,755.72 baht per baht-weight for gold ornaments and 24,100 baht per baht-weight for gold bar.

The selling prices were set at 24,600 baht per baht-weight for gold ornaments, and 24,200 baht per baht-weight for gold bar.

 

[Muthukali]

Sugar Surplus Prompts Traders’ Bear Streak: Commodities

Sugar traders are bearish for a seventh consecutive week, the longest stretch since at least 2007, on prospects for the first supply glut in four years.

Sixteen of 22 analysts expect raw-sugar prices to decline next week and one was neutral, according to Bloomberg’s weekly sentiment survey that began in April 2007. Global production will exceed demand by 10 million metric tons in the 12 months ending in September, equal to about a year of U.S. consumption, according to Singapore-based Olam International Ltd., which trades and processes commodities in 65 countries.

Prices that surged to a 30-year high in February last year spurred farmers to plant more cane and beet, expanding global production to a record this season. Futures traded in New York slumped 10 percent in the past three weeks on mounting concern about another glut next season. Thailand, the world’s second- biggest exporter, may ship the most supply ever this year, the country’s Office of the Cane & Sugar Board said this week.

“We have a surplus this year and it looks like we will have another one next year and that is more bearish than we initially thought,” said John Stansfield, a senior analyst at Olam in London. “The last time the glut for two consecutive years was so big, prices were significantly lower.”

Erases Gains
Sugar’s retreat in the past three weeks to 23.52 cents a pound on ICE Futures U.S. eroded this year’s gain to 0.9 percent and left futures 35 percent lower than the three-decade high of 36.08 cents reached in 2011. Prices averaged 11.16 cents from October 2006 to September 2008, the last time there was two consecutive annual supply gluts. Production costs have risen since then, setting a higher floor for prices, Stansfield said.

The Standard & Poor’s GSCI gauge of 24 commodities rose 6.6 percent this year compared with a 9 percent increase in the MSCI All-Country World Index (MXWD) of equities. Treasuries lost 0.3 percent, a Bank of America Corp. index shows.

Global production will advance 4.2 percent to 168.2 million tons this year, compared with a 2.1 percent gain in consumption to 160 million tons, the U.S. Department of Agriculture estimates. Olam anticipates a surplus of 7 million tons in the next season. The surplus this season would be the first in four years, Stansfield said.

Production in India, the second-biggest producer after Brazil, climbed 13 percent to 23.2 million tons in the six months ended March 31, the Indian Sugar Mills Association said April 3. Thai shipments may rise 20 percent to 8 million tons in 2012, the Office of the Cane & Sugar Board’s Secretary General Prasert Tapaneeyangkul said in an interview.

Trading Commission
Hedge funds and other speculators cut their bets on higher prices by 12 percent in the week ended April 3 and now hold 118,339 U.S. futures and options, data from the Commodity Futures Trading Commission show. The net-long position was 143,577 contracts on March 2, the most since August.

Production in Brazil, the world’s biggest grower, was damaged last year by dry weather and frost, driving prices up 56 percent from May to July. The center south of Brazil, which accounts for about 90 percent of the country’s production, was forecast in March last year to have record cane production of 568.5 million tons by industry group Unica. Output was actually 493.3 million tons. Unica yesterday forecast this year’s harvest in the center south at 509 million tons.

Sugar for May delivery on ICE Futures U.S. is trading at a 3 percent premium to the July contract, compared with as little as 1 percent three months ago, an indication that traders are still concerned about near-term supply.

Sugar Consumption
“The premium May raw-sugar futures command over July suggests that supplies are tight for now ahead of the start of the center south Brazil crop,” said Peter de Klerk, an analyst in London at Czarnikow Group Ltd., which traded sugar in more than 90 countries last year.

Sugar consumption rose every year since 1994, USDA data show. Demand will be a record 167.8 million tons this season, according to the International Sugar Organization, whose members include 86 countries. Declining prices and economic growth will drive buying, said Leonardo Bichara Rocha, a senior economist at the ISO in London. The International Monetary Fund anticipates a 3.3 percent expansion in the global economy this year.

Prices will average 22 cents this quarter and the next and 21 cents in the final three months of the year, 6.5 percent less than now, Deutsche Bank AG estimates. That compares with a five- year average of 18.6 cents, data compiled by Bloomberg show.

Annual Advance
In other commodities, 19 of 26 traders and analysts surveyed by Bloomberg expect gold to gain next week. Futures on the Comex in New York increased 6.9 percent to $1,675.30 an ounce this year, set for a 12th consecutive annual advance.

Twelve of 28 traders and analysts surveyed by Bloomberg expect copper to gain next week and the same amount predicted a drop. The metal for delivery in three months, the London Metal Exchange’s benchmark contract, rose 7.2 percent to $8,150 a ton this year.

Thirteen of 30 people surveyed anticipate lower corn prices next week and five were neutral, while 17 of 31 said soybeans will slide. Corn slipped 2.5 percent to $6.305 a bushel this year as soybeans climbed 14 percent to $13.7875 a bushel.

The S&P GSCI gauge of commodities fell to a two-month low this week after a Labor Department report showed U.S. employers added the fewest jobs in five months in March and on concern that Europe’s debt crisis may deepen. Chinese Premier Wen Jiabao cut the nation’s economic growth target to 7.5 percent last month, the lowest since 2004.

“Chinese indicators continue to point towards a continued slowdown, even though the soft landing still looks like the most probable alternative,” said Filip Petersson, an analyst at SEB AB in Stockholm. “There could be some way left to fall.”

 

[Muthukali]

Fund Manager to Lose Hair After Betting on $2,000 Bullion

Charles Oliver, a Sprott Asset Management Inc. portfolio manager in Toronto, will have his head shaved today after losing a bet on the gold price.

Oliver joined Sprott in January 2008 and told clients at a meeting four months later he was so convinced bullion would reach $2,000 an ounce by April 16, 2012, he was willing to stake his hair on it. Gold was at $945 an ounce at the time.

“We got to $1,923 last September, I thought it was all good and easy straight from there on in,” Oliver, who co- manages the C$500 million ($501 million) Sprott Gold and Precious Metals Fund, said in a telephone interview today. “The markets can sometimes tease you.”

Gold futures for June delivery slid 1.5 percent to $1,654.70 at 1:49 p.m. on the Comex in New York. Gold on the Comex peaked at a record $1,923.70 an ounce on Sept. 6.

Oliver, who’s been letting his hair grow out for about two years, said he still expects gold will reach $2,000 and that there’s a “very strong chance” it will get there this year.

“I’m not going to make any new bets yet,” he said.

Gold prices will rise as countries increase money supplies, he said. Investor demand for gold has surged as the Federal Reserve’s accommodative monetary policy spurred declines in the dollar, boosting the appeal of precious metals as an alternative asset. Gold surged 70 percent from December 2008 to June 2011 as the central bank set interest rates at a record low and bought $2.3 trillion of debt in two rounds of quantitative easing.

“Governments are going to continue to run large deficits and to fund it they are going to print,” he said. “That’s great for gold.”

Oliver is also running a charity event associated with the bet, he said. He’s pledged C$100,000 and is hoping to raise more than C$1 million, he said.

 

[Muthukali]

Hedge Funds Cut Commodity Bets on Slowing China Growth

Speculators cut bullish wagers on commodities by the most in 2012 on mounting concern that the slowest Chinese growth in almost three years will curb gains in demand for everything from copper to cotton.

Money managers lowered net-long positions across 18 U.S. futures and options by 9.3 percent to 1.01 million contracts in the week ended April 10, the biggest reduction since Dec. 20, data from the Commodity Futures Trading Commission show. Copper holdings tumbled 84 percent, the most since November. Hedge funds are now betting on lower cotton prices.

China’s economy, the biggest consumer of energy and metals, expanded 8.1 percent last quarter, less than the 8.4 percent anticipated by economists surveyed by Bloomberg, government data showed April 13. The World Bank cut its growth estimate for the Asian nation to a 13-year low a day earlier. Commodities will “drift lower” this quarter as central banks refrain from adding further stimulus, UBS AG said in a report last week.

“Many areas of the world that have been big sources of demand for commodities are slowing,” said Bill Greiner, who helps manage $13 billion of assets as chief investment officer at Mariner Wealth Advisors in Kansas City, Missouri. “If anything, we expect growth worldwide to be a little softer than people are looking for.”

The Standard & Poor’s GSCI Spot Index of 24 raw materials dropped 1 percent last week, led by natural gas, sugar and copper, and dropped further today. The MSCI All-Country World Index of equities fell 1.5 percent for a second consecutive decline, reaching a two-month low on April 11. Treasuries returned 0.7 percent, a Bank of America Corp. index shows.

Copper Tumbles
Fourteen of the raw materials tracked by the S&P GSCI retreated. Copper’s 4.4 percent tumble was the biggest this year. Natural gas extended a slide to a 10-year low, trading below $2 per million British thermal units. Cotton futures rose 1.3 percent, rebounding from a 5.3 percent drop the prior week.

The World Bank said the China will grow 8.2 percent this year, down from a January projection of 8.4 percent and the slowest pace since 1999. Chinese Premier Wen Jiabao cut the nation’s economic growth target to 7.5 percent last month, the lowest since 2004. China accounts for 40 percent of copper consumption and 11 percent of oil demand, according to Barclays Capital and the International Energy Agency.

Labor Department
Confidence among U.S. consumers cooled in April, a sign that the moderation in job growth may limit the biggest part of the economy, the Thomson Reuters/University of Michigan’s preliminary index of sentiment showed April 13. Filings for unemployment benefits rose to a two-month high in the week ended April 7, the Labor Department said April 12. North America accounts for 11 percent of copper demand and uses 26 percent of the world’s oil, Barclays and International Energy Agency data show.

Slowing growth may prompt policy makers to increase monetary easing. The People’s Bank of China reported on April 12 an unexpected surge in new yuan loans during March, showing the Communist Party may be trying to avoid a deeper decline in growth. On April 14, the Asian country widened the yuan’s trading band for the first time since 2007.

Federal Reserve Bank of New York President William C. Dudley and Fed Vice Chairman Janet Yellen endorsed the central bank’s view last week that borrowing costs are likely to stay low through late 2014. Speaking in New York on April 11, Yellen said she considers “a highly accommodative policy stance to be appropriate in present circumstances.”

Even without additional monetary easing, low interest rates and other existing policies will help support demand for commodities in the second half of the year, said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based consultant.

‘Awash in Liquidity’
“The world is awash in liquidity,” said Schenker, who was the third-most accurate forecaster for industrial metals in Bloomberg Rankings the past eight quarters. “You’ve got a bunch of hammers out there looking for some nails. People need to put this money somewhere.”

Investors pulled $636.2 million from commodity funds in the week ended April 11, the most since early January, according to Brad Durham, a managing director at Cambridge, Massachusetts- based EPFR Global, which tracks money flows. Gold and precious metals outflows totaled $290.3 million, the biggest exit since Dec. 28, he said.

Fed Minutes
Minutes from the Fed’s March policy meeting, which were released on April 3, showed policy makers will probably hold off increasing monetary accommodation unless the U.S. economic expansion falters. Crude oil, copper, nickel and cotton may decline “in the absence of further injections” of stimulus measures, UBS analysts led by Hong Kong-based Peter Hickson said in the report April 12.

Goldman Sachs Group Inc.’s commodity research team, led by Jeffrey Currie in London, cut its three-month recommendation on raw materials to “neutral” on March 28, saying that the economy will “soften” this quarter.

Money managers reduced their bullish bets on copper by 15,687 contracts to 2,955 as of April 10, the CFTC data show. That’s the lowest since funds were net-short, or betting on declines, in January.

The value of Chinese homes sold dropped 18 percent in the first three months of the year, the government reported April 13. Construction generates about 40 percent of demand for the metal, according to the Copper Development Association. Stockpiles monitored by the Shanghai Futures Exchange rose to the highest since at least 2003 on March 15 and have more than doubled this year.

Farm Bets
A measure of 11 U.S. farm goods showed speculators lowered wagers on a rally for agricultural commodities by 4.9 percent to 669,280. Holdings fell for a third week, the longest slump since December. Speculators have a net-short position of 2,561 contracts in cotton, compared with net-long bets of 7,296 contracts a week earlier.

Sugar wagers dropped 9.4 percent to 107,232, the lowest in four weeks. Sixteen of 22 analysts expect prices in New York to decline next week and one was neutral, according to Bloomberg’s weekly sentiment survey. The traders were bearish for a seventh consecutive week, the longest stretch since at least 2007, when the surveys began.

“There’s more concern now over the possibility of a global recession,” said James Dailey, who manages $215 million of assets at TEAM Financial Management LLC in Harrisburg, Pennsylvania. “It’s quite difficult to navigate trading in commodities right now because things are going to have to get worse before policy makers step in.”

 

[Muthukali]

Gold Sales Drop in March on Signs of Stability, Perth Mint Says

Gold sales from Australia’s Perth Mint, which processes all of the country’s bullion, declined 9.6 percent last month as signs of an accelerating economic recovery in the U.S. curbed demand for haven investments.

Sales of gold coins and bars dropped to 38,123 ounces from 42,161 ounces a year earlier, according to data e-mailed by the mint after an April 13 interview with Neil Vance, wholesale manager at the facility in Western Australia that was founded in 1899. Silver sales slumped 39 percent to 698,559 ounces, it said.

Bullion prices dropped in February and March as U.S. non- farm payrolls climbed, boosting signs that the world’s largest economy is recovering as the Federal Reserve holds interest rates at a record low. Sales from the mint may rebound later this year following a pattern seen in 2011, Vance said.

“What’s happened is a little bit more stability in world markets at the moment, and some of the interest has leveled off,” Vance said by phone from Perth. “Since the global financial crisis hit, we’ve experienced peaks and troughs, and we believe at the moment we’re just in a trough.”

Immediate-delivery gold, which dropped 2.4 percent in February and a further 1.7 percent in March, traded at $1,651.22 an ounce at 8:01 a.m. in Singapore. Spot silver was at $31.48 an ounce after declining 7 percent last month.

In the first quarter, gold and silver coin and bar sales from the Perth Mint totaled 2.16 million ounces compared with almost 3.7 million a year earlier, according to mint data. Investors can buy and store gold at the mint, or buy coins to hold themselves. The figures refer to coins, as well as so- called investment and minted bars, according to the mint.

Declining Sales
Sales of gold coins from the U.S. Mint were 62,500 ounces in March, 15 percent lower than a year earlier, according to the Washington, D.C.-based mint’s website. So far in April, they’ve totaled 12,500 ounces, and at that pace would be 25,000 ounces this month, 76.9 percent lower than a year earlier.

The U.S. economy expanded “at a modest to moderate pace” from mid-February through late March as manufacturing, hiring and retail sales showed signs of strength, the Federal Reserve said in its Beige Book report on April 11. Federal Reserve Bank of St. Louis President James Bullard said yesterday that U.S. growth will quicken and the economy is “on track.”

While the Fed has pledged to keep interest rates near zero through 2014 to sustain the recovery, European governments including Spain are battling the debt crisis. Spain is set to sell debt today as its borrowing costs near levels that prompted Greece, Ireland and Portugal to seek bailouts. The crisis is getting worse, Mohamed A. El-Erian, co-chief investment officer at Pacific Investment Management Co., said April 11.

‘Go Back Up’
“Silver and gold prices have come down,” said Vance. “We think people may be waiting for them to go back up before they come back in to buy.”

Goldman Sachs Group Inc. said March 28 that gold will rise further on another round of stimulus from the Fed. While the metal may decline this quarter, the price may recover in the second half, UBS AG said in a report the same day.

Gold may reach $1,830 in the third quarter and $1,900 in the fourth, according to the median estimate of 19 analysts compiled by Bloomberg. The metal, which has rallied for 11 years, reached a record $1,921.15 on Sept. 6 last year.

“People believe they see the peak in the price, so they sell back their coins or wait for it to come back in price before coming in to buy again,” Vance said. “Certainly we expect that to happen this year.”

Holdings in bullion-backed exchange-traded products stood at 2,395.126 metric tons yesterday, according to data compiled by Bloomberg. That compares to the all-time high of 2,410.186 tons on March 13.

 

[Muthukali]

Oil Trades Near Two-Week High on Spanish Debt, IMF Forecast

Oil traded near the highest close in two weeks after Spain raised more debt than planned at an auction and the International Monetary Fund boosted its global growth outlook, easing concern a slowing economy will curb demand for crude.

Futures were little changed after gaining for a second day yesterday. Spain sold 3.2 billion euros ($4.2 billion) of bills, compared with a maximum target of 3 billion. The IMF raised its growth forecast for 2012 to 3.5 percent from 3.3 percent and increased its 2013 estimate. U.S. crude stockpiles rose for a fourth week, data from the American Petroleum Institute showed.

Crude for May delivery was at $104.26 a barrel, up 6 cents, in electronic trading on the New York Mercantile Exchange at 9:42 a.m. Sydney time. The contract yesterday gained 1.2 percent to $104.20, the highest close since April 2. Prices are 5.5 percent higher this year.

Brent oil for June settlement rose 10 cents to $118.78 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s front month premium to West Texas Intermediate closed at $14.14, the lowest since Feb. 1.

U.S. crude supplies increased 3.4 million barrels last week, figures from the industry-funded API show. An Energy Department report today may show inventories expanded 1.8 million barrels, according to the median of 10 analyst estimates in a Bloomberg News survey.

 

[Muthukali]

Gold prices for Wednesday - Thailand

The Gold Traders Association this morning set the buying price at 23,649.60 baht per baht-weight for gold ornaments and 24,000 baht per baht-weight for gold bar.

The selling prices were set at 24,500 baht per baht-weight for gold ornaments, and 24,100 baht per baht-weight for gold bar.

 

[Muthukali]

Oil Trades Near One-Week Low on Rising U.S. Stockpiles

Oil traded near the lowest close in more than a week in New York after a government report showed U.S. crude stockpiles rose more than twice as much as forecast.

Futures were little changed after declining the most in two weeks yesterday. U.S. supplies gained 3.9 million barrels last week, Energy Department data showed. The median forecast in a Bloomberg News survey of analysts was for an increase of 1.8 million barrels. Prices also dropped after Iraq’s deputy prime minister for energy said the Strait of Hormuz is unlikely to close and there is no shortage of oil.

“The trend is there for inventories to build but we haven’t seen dramatic decreases in the price of the commodity,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity markets newsletter in Sydney. “The market is trying to work out if we’re in a recovery mode or slowing. It’s a bit quiet in Iran and the Middle East but it’s still there.”

Crude for May delivery was at $102.76 a barrel, up 9 cents, in electronic trading on the New York Mercantile Exchange at 11:56 a.m. Sydney time. It slid 1.5 percent yesterday to $102.67, the lowest close since April 10. The more-actively traded June contract gained 7 cents to $103.19 a barrel today. Front-month prices are 4 percent higher this year.

Brent oil for June settlement rose 0.4 percent to $118.40 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $15.16, from $14.85 yesterday.

Fuel Stockpiles
Oil in New York has technical support along its 100-day moving average, around $101.93 a barrel today, according to data compiled by Bloomberg. Futures have been trading above this indicator for the past week. Buy orders tend to be clustered near chart-support levels.

U.S. crude stockpiles climbed to 369 million barrels, the highest level since May 27, the Energy Department data showed. Refineries operated at less than 85 percent of capacity for a second week, according to the report. Gasoline inventories decreased 3.7 million barrels, compared with a median forecast for a decline of 1.1 million barrels in the Bloomberg survey.

Gasoline for May delivery slid 3.13 cents, or 1 percent, to $3.2027 a gallon on the New York Mercantile Exchange yesterday. That’s the lowest closing price in seven weeks.

Distillate inventories, a category that includes heating oil and diesel, dropped 2.91 million barrels last week, the Energy Department said. Analysts surveyed by Bloomberg predicted they would shrink by 125,000 barrels.

The oil market is balanced and there is no need for OPEC to change its output quota if demand remains at current levels, Iraq’s Hussain al-Shahristani said in an interview in London. Ministers from the Organization of Petroleum Exporting Countries are scheduled to meet June 14 in Vienna.

Iraq is hosting an international diplomatic gathering next month to discuss Iran’s alleged efforts to develop nuclear weapons as sanctions restrict buyers of its crude. Iran has threatened to shut the Strait of Hormuz, a transit route for a fifth of the world’s oil, in response to an embargo.

 

[Muthukali]

Gold prices for Thursday - Thailand

The Gold Traders Association this morning set the buying price at 23,649.60 baht per baht-weight for gold ornaments and 24,000 baht per baht-weight for gold bar.

The selling prices were set at 24,500 baht per baht-weight for gold ornaments, and 24,100 baht per baht-weight for gold bar.

 

[Muthukali]

Gold prices for Friday - Thailand

The Gold Traders Association this morning set the buying price at 23,649.60 baht per baht-weight for gold ornaments and 24,000 baht per baht-weight for gold bar.

The selling prices were set at 24,500 baht per baht-weight for gold ornaments, and 24,100 baht per baht-weight for gold bar.

 

[Muthukali]

Gold prices for Wednesday - Thailand

The Gold Traders Association this morning set the buying price at 23,649.60 baht per baht-weight for gold ornaments and 24,000 baht per baht-weight for gold bar.

The selling prices were set at 24,500 baht per baht-weight for gold ornaments, and 24,100 baht per baht-weight for gold bar.

 

[Muthukali]

Cattle Rebound From Biggest Drop in 11 Months on Mad Cow

Cattle futures rebounded after tumbling by the exchange limit yesterday after a case of mad-cow disease was reported in the U.S. The South Korean government will halt any new U.S. imports.

The disease has been found in a dairy cow in central California, John Clifford, the U.S. Department of Agriculture’s chief veterinarian, told reporters yesterday in Washington. Meat from the animal didn’t enter the human food chain and the carcass will be destroyed, Clifford said. This is the fourth confirmed case of the brain-wasting disease in the U.S. cattle herd since the first was discovered in December 2003, in an animal that came from Canada.

“It’s just a small rebound after yesterday’s drop,” said Hiroyuki Kikukawa, general manager of research at IDO Securities Co. “An outbreak of mad cow disease will keep putting downward pressure on the market. This will keep buyers, including Japan, from easing trade curbs on U.S. beef imports.”

Futures for June delivery climbed 0.3 percent to $1.1185 a pound on the Chicago Mercantile Exchange at 10:11 a.m. Tokyo time. Futures fell 2.6 percent to settle at $1.11575 a pound yesterday to the lowest level since July 1 and the biggest percentage drop on a most-active contract since May 23.

South Korea will halt customs clearance of any new U.S. beef imports, Park Sang Ho, an official at South Korea’s farm ministry, said by phone today. The agriculture ministry shortly after issued a statement saying it will take “necessary measures” on beef imports and will take steps “soon” in regard to the nation’s quarantine rules.

Baker Commodities Inc. said the case of mad cow disease found in California was at its Hanford deadstock plant, where dead livestock are held before going to a rendering plant. The animal arrived at the plant April 18 and all test samples are sent to the University of California at Davis, the company said.

Japan Imports
Japan has no plan to suspend U.S. beef imports “at the moment” even after the discovery, Minoru Yamamoto, director of the animal health division at the farm ministry said by phone.

The discovery of mad cow disease in California shows that the government’s surveillance system is working, and the U.S. beef and milk supply is safe, Guy Loneragan, an epidemiologist and professor of food safety and public health at Texas Tech University, said on a conference call with reporters organized by the National Cattlemen’s Beef Association.

The news also came “at the very tail-end of what is a major downward correction,” Dennis Smith, a senior account executive at Archer Financial Services in Chicago, said in a telephone interview. Prices have fallen 7.9 percent this year.

‘Non-event’
The cow that tested positive for BSE “didn’t come anywhere near the food chain,” said Troy Vetterkind, the owner of Vetterkind Cattle Brokeragesaid in a telephone interview from Chicago yesterday. “The government, the USDA, their inspection service did their job. It’s a non-event in my opinion.”

In 2003, after the first case of the disease, dozens of countries shuttered their doors to U.S. shipments. Losses to livestock producers and meatpackers ranged from $2.5 billion to $3.1 billion annually from 2004 through 2007, according to the International Trade Commission. Nations including Japan and China have maintained some restrictions ever since.

 

[Muthukali]

Oil Trades Near Weekly High on Demand Outlook After Fed

Oil traded near the highest level in more than a week in New York after Federal Reserve policy makers said they expect growth to accelerate, boosting speculation that fuel demand will rise.

Futures were little changed after gaining 0.6 percent yesterday. Economic growth is expected to “remain moderate over coming quarters and then to pick up gradually,” the Federal Open Market Committee said in a statement. Prices declined earlier as U.S. supplies gained and Iran’s envoy in Moscow said his country is considering a proposal to halt the expansion of its nuclear program.

Crude for June delivery was at $104.05 a barrel, down 7 cents, in electronic trading on the New York Mercantile Exchange at 9:46 a.m. Sydney time. The contract yesterday rose 57 cents to $104.12, the highest close since April 17. Prices are 5.3 percent higher this year.

Brent oil for June settlement increased 0.8 percent to $119.12 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s front month premium to West Texas Intermediate closed at $15.

Iran is considering a Russian proposal to halt the expansion of its nuclear program in order to avert new sanctions, Iranian Ambassador Mahmoud-Reza Sajjadi said in Moscow yesterday. Oil prices have climbed this year amid speculation that tension with Iran may disrupt global supplies.

U.S. crude inventories rose 3.98 million barrels to 373 million last week as output climbed to a 12-year high, according to the Energy Department. Stockpiles were projected to increase 2.8 million barrels, according to the median of 11 analyst estimates in a Bloomberg survey.

 

[Muthukali]

Gold prices for Thursday - Thailand

The Gold Traders Association this morning set the buying price at 23,649.60 baht per baht-weight for gold ornaments and 24,000 baht per baht-weight for gold bar.

The selling prices were set at 24,500 baht per baht-weight for gold ornaments, and 24,100 baht per baht-weight for gold bar.

 

[Muthukali]

Gold Extends Advance on Optimism Fed Will Spur Growth

Gold rose in New York after Federal Reserve Chairman Ben S. Bernanke said he’ll do more to fuel growth if necessary, weakening the dollar and boosting bullion’s appeal as a store of value.

Bernanke said the central bank is ready to add stimulus if needed even after leaving its policy unchanged yesterday and upgrading its view of the economy for 2012. Additional bond- buying is still “very much on the table,” he said. That helped stoke a rally in global stocks and drove the greenback lower. The Fed bought $2.3 trillion of debt in two rounds of so-called quantitative easing from 2008 to June 2011.

“Gold is clearly trading on the dollar,” Copenhagen-based Arne Lohmann Rasmussen, head of rates, foreign-exchange and commodity strategy at Danske Bank A/S (DANSKE), said by e-mail today. “The dollar is under pressure.”

June-delivery bullion rose 0.6 percent to $1,651.60 by 8:11 a.m. on the Comex in New York. Gold for immediate delivery increased 0.5 percent to $1,651.07 an ounce in London.

“Gold regained its footing after Bernanke said the Fed is prepared to do more for the U.S. economy,” said Lynette Tan, an investment analyst at Phillip Futures Ltd.

Bullion, which dropped as much as 1.1 percent yesterday, rose today as the dollar slid for a third day against a six- currency basket including the euro. Holdings of gold in exchange-traded products fell for a third day yesterday to 2,389.8 metric tons, the lowest level since March 23.

Platinum for July delivery, this year’s best-performing precious metal, gained 0.9 percent to $1,560.40 an ounce. Palladium for June delivery rose for the first time in four days, gaining 1.2 percent to $662.95 an ounce. Silver for July delivery advanced 1.5 percent to $30.89 an ounce, the most since April 12.