WEEKLY BULLION REPORT-26 May To 31 May 2014
MARKET FUNDAMENTAL NEWS & REPORTS
GOLD
Gold traded in a tight range this week closing at 1292.80 after opening at 1293.00 on the previous Monday. Fed speeches and global data had little effect on prices this week. Gold futures settled lower Friday on the back of better-than-expected data on new U.S. home sales and strength in U.S. equities, prompting prices to tally a mild loss for the week. Sales of new homes increased 6.4%, the most since October, Commerce Department data showed. Gold shed about 0.1% for the week. The biggest component of the decline was the drop in premiums which had
jumped abnormally over the past few months on lack of supply in the physical markets. Gold premiums on the MCX which have averaged around Rs. 1180/ 10gm since August 2013 fell to Rs. 534, almost a 50% drop. RBI has now permitted 7 more agencies to import gold with immediate effect. Earlier in March, the RBI had allowed five more banks to import gold under 80:20 scheme. Overall, now more than 20 entities, including state-run banks, private banks and agencies are allowed to import gold. In India, Rupee strengthens to its highest level & is expected to be so. This also exerting pressure on precious metals price for further downward movement.
SILVER
Silver closed at 19.428 while Copper headed towards a new high and ended the week at 3.166. July silver dropped 0.5% to $19.42 an ounce—about 0.5% higher on the week. Stronger Rupee also exerting downward pressure on precious metals price. Silver get effected from a steep fall in Gold premium & permission to import gold to 7 new agencies by RBI. Also, due to a range-bound movement in Base metals, overall, putting pressure on Silver price.
NATURAL GAS
Natural Gas climbed after the EIA weekly inventory release to trade at 4.388 after opening at 4.47. After industrial natural gas consumption bottomed out in 2009 at 16.9 Bcf/d, it has been increasing at a moderate pace. The May 2014 Short-Term Energy Outlook projects that industrial consumption will increase through 2015 and the Annual Energy Outlook projects continued growth through 2040.
GOLD
Gold traded in a tight range this week closing at 1292.80 after opening at 1293.00 on the previous Monday. Fed speeches and global data had little effect on prices this week. Gold futures settled lower Friday on the back of better-than-expected data on new U.S. home sales and strength in U.S. equities, prompting prices to tally a mild loss for the week. Sales of new homes increased 6.4%, the most since October, Commerce Department data showed. Gold shed about 0.1% for the week. The biggest component of the decline was the drop in premiums which had
jumped abnormally over the past few months on lack of supply in the physical markets. Gold premiums on the MCX which have averaged around Rs. 1180/ 10gm since August 2013 fell to Rs. 534, almost a 50% drop. RBI has now permitted 7 more agencies to import gold with immediate effect. Earlier in March, the RBI had allowed five more banks to import gold under 80:20 scheme. Overall, now more than 20 entities, including state-run banks, private banks and agencies are allowed to import gold. In India, Rupee strengthens to its highest level & is expected to be so. This also exerting pressure on precious metals price for further downward movement.
SILVER
Silver closed at 19.428 while Copper headed towards a new high and ended the week at 3.166. July silver dropped 0.5% to $19.42 an ounce—about 0.5% higher on the week. Stronger Rupee also exerting downward pressure on precious metals price. Silver get effected from a steep fall in Gold premium & permission to import gold to 7 new agencies by RBI. Also, due to a range-bound movement in Base metals, overall, putting pressure on Silver price.
NATURAL GAS
Natural Gas climbed after the EIA weekly inventory release to trade at 4.388 after opening at 4.47. After industrial natural gas consumption bottomed out in 2009 at 16.9 Bcf/d, it has been increasing at a moderate pace. The May 2014 Short-Term Energy Outlook projects that industrial consumption will increase through 2015 and the Annual Energy Outlook projects continued growth through 2040.
COPPER
Copper rose on Friday to near two-month peaks on growing supply tightness while nickel’s rally paused. LME copper traded up 0.64% at $6,919 a ton in rings, heading for a weekly gain of nearly 1%, its third straight weekly rise. Prices hit the highest in 11 weeks at $6,954 a ton. A crunch in nearby copper supply as reflected by LME cash prices at $80 a ton above the benchmark, near the highest in two years, is helping boost copper. LME inventories have slipped to their lowest since 2008. Also boosting the metal were surveys out showing China’s factory sector had its best performance in five months in May and US factory output growth hitting its fastest pace since February 2011. However, the HSBC Flash China Manufacturing PMI still pointed to a contraction, coming in at 49.7, keeping a lid on gains in copper. Three month (copper) is being pushed higher by fundamental tightness, which you can see in stocks, (but) this will be coming to an end in the second quarter as demand begins to wane.
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