WEEKLY BULLION REPORT-11 Aug To 16 Aug 2014


GOLD
Gold tumbled the last day of the week after climbing on geopolitical tensions after the Polish Ambassador said that Russia was mounting troops on the Ukraine border and President Putin responded to US sanctions with his own sanctions.Gold climbed to a three-week high after US President Barack Obama authorized air strikes in Iraq, and the metal looked set to post its best week in seven as global geopolitical tensions spurred safe-haven demand. Bullion also got a boost from a drop in Asian share prices on growing fears that conflicts in Ukraine and the Middle East could sap global growth. The 10-year US Treasury yield hit a 14-month low and the dollar slipped against the safe-haven yen, showing increasing risk-aversion in financial markets. Gold fell, pressured by a lack of physical buyers and gains on Wall Street, but a US air strike in Iraq and tensions in Middle East supported prices, which stayed above $1,300 an ounce. Gold was up around 1% for the week, its first weekly increase in four weeks. In early trade, gold rallied to a three-week high on news US aircraft bombed Islamic fighters marching on Iraq’s Kurdish capital of Arbil.According to the World Gold Council’s latest estimate, global gold demand fell 514.7 metric tons in 2013, or 11.2%. That was enough to blast gold down 27.9% to its worst annual performance in nearly a third of a century. The problem wasn’t traditional bar-and-coin investment, which soared 31.1% higher last year to 1780.6t. Gold plunged solely because global ETF demand plummeted to negative 879.8t in 2013.

SILVER
Silver took a major turn after climbing on safe haven trades to end the week at 19.903 down by 87 points. Bullion also got a boost from a drop in Asian share prices on growing fears that conflicts in Ukraine and the Middle East could sap global growth. The 10-year US Treasury yield hit a 14-month low and the dollar slipped against the safe-haven yen, showing increasing risk-aversion in financial markets.

CRUDE OIL
Crude Oil gained at the end of the week, as traders worried a bit after President Obama approved air strikes in Iraq to protect Christians and Kurds. Brent Oil followed diverged to end at 104.77 giving up 67 cents at the close of the week.The price of oil jumped at the end of the week on confirmation that US President Barack Obama has authorized air strikes against Islamic militants in northern Iraq.It is widely recognized that the northern area of Iraq holds the country’s highest oil reserve. The news of the new US airstrikes has quashed all such discussions now and investors will be prudent to keep a very close eye on the fluctuation of oil prices. Crude oil futures prices gained traction Aug. 7 just as news of rebels belonging to the Islamic State in Iraq and Syria, or ISIS, were seizing more land in the vicinity of Kurdistan, “coming unsettlingly close to a number of oil projects and prompting some international companies to evacuate. Ireland’s Petrel Resources said last week that no exploration is being conducted at present at the Amira prospect in Iraq, Organization of the Petroleum Exporting Countries said production rose to its highest level in five months in July, reflecting renewed output in Libya. And consumption data provided a mixed picture, with China saying crude imports in July rose 2% from June but remain down 9% from year-ago levels.

NATURAL GAS
Natural Gas climbed most of the week as the weather finally turned hot in the US indicating an Indian summer. Increased residential demand is helping to push up prices to 3.969. Weather forecasts are mixed, but some show spurts of summer heat in parts of the country both this week and later in August. MDA Weather Services shows slightly above-normal temperatures coming in two weeks to cover all of the East Coast and spread further from west to east across Texas. It started with weather, several analysts said. Though forecasts are mixed, they are showing some spurts of summer heat likely to come in parts of the country both this week and later in August. Heat can increase air conditioning use and gas-fired electricity consumption. MDA Weather Services shows slightly above-normal temperatures coming in two weeks to cover all of the East Coast and spread further from west to east across Texas. Short sellers who bet on falling prices Thursday may have also decided to buy back in and cover those bets to take profits before the weekend.

COPPER
Copper gained 4 points but remained weak and is trading at 3.181. In a move that could see money moving out of emerging markets and back to safe havens,American aircraft on Friday struck targets in Iraq after US President Barack Obama’s decision to authorize air strikes against militants fighting the government there. Apprehensions that investors would take risk off the table in emerging economies saw US treasuries rallying while European equities skidded.Silver climbed mid-week but gave back those gains late on Friday as traders moved away from risk off trades. Copper weakened this week as demand in China was low on worries about a significant drop in Chinese imports.China’s copper arrivals fell 2.9% month-on-month in July, falling for a third straight month, after small importers delayed term refined metal shipments.Arrivals of copper anode, refined metal, alloy and semi-finished copper products stood at 340,000 tons in July, the lowest since April 2013, data from the General Administration of Customs showed on Friday. The inflows dropped further from 350,000 tons in June when arrivals hit a 14-month lowest in the first seven months of 2014, imports rose 18.7 percent year-on-year to 2.86 million tons, the data showed.

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