WEEKLY BULLION REPORT-1 Sep To 6 Sep 2014

equity tips
GOLD
Gold reversed course in the European session to give back earlier gains and some of yesterday’s gains to trade at 1286.10 down by $4.30 as tensions in the Ukraine ease a bit. Russia’s intentions remain unclear. US President Barack Obama said yesterday they had no immediate plans to escalate military operations against Islamic State extremists in Iraq or Syria, but stressed the need to counter the group’s advance. Regarding Russia, Obama said he expects to impose additional sanctions.US traders are heading for a long weekend. Investors are probably inclined to avoid risk, while it is not sure that this will help the dollar much. Aside from the data, there will still be plenty of headlines from Ukraine. For now, the reaction from the West remains rather moderate. New ‘hard sanctions’ would be a negative for the EMU and could weigh on the euro. However, the question is whether Europe is prepared to play the game really hard. In this respect, we look to the meeting of EU ministers today and tomorrow. For now we have the feeling that the rhetoric and sanctions won’t be extremely tough.

SILVER
Silver dipped 105 points after soaring along with precious metals yesterday. Silver is trading at 19.505 supported by strong housing data and a better than expected GDP print in the US. US traders are heading for a long weekend. Investors are probably inclined to avoid risk, while it is not sure that this will help the dollar much. Aside from the data, there will still be plenty of headlines from Ukraine. For now, the reaction from the West remains rather moderate. New ‘hard sanctions’ would be a negative for the EMU and could weigh on the euro. However, the question is whether Europe is prepared to play the game really hard. In this respect, we look to the meeting of EU ministers today and tomorrow. For now we have the feeling that the rhetoric and sanctions won’t be extremely tough.

CRUDE OIL
Crude Oil added 47 cents today as tensions mount in Eurasia to trade at 95.03 while Brent Oil added 35 cents to reach 102.81 the gains are not expected to be sustainable and should reverse once Russia and Ukraine settle down somewhat. A fresh round of tensions between Russia and the West as well as clashes in eastern Ukraine and talks about possible presence of US soldiers in the country have so far had no significant impact on the price of oil. The front-month contract on Brent has been trading sideways in the past three weeks and yesterday settled just shy below 102.50 USD/bbl. Although geopolitical tensions remain high in general (Ukraine, Libya, Syria/Iraq, Israel), their oil market impact is – at least for the time being – quite small. In a combination with relatively strong supply in Atlantic basin and muted demand despite quite strong pick-up in ARA refinery margins over the past couple of weeks), they do not generate more significant upside pressure on oil prices. Stronger-than-expected US economic growth data meanwhile raised hopes for stronger demand in the world’s largest oil consumer.The US Commerce Department yesterday said the country’s economy expanded at an annual rate of 4.2% in the second quarter, revising upward its July estimate
of 4.0%.

NATURAL GAS
Natural Gas continues to climb along with the temperature as a hotter than expected Labor Day holiday rolls in. Gas is trading at 4.064 up by 19 points as weather forecasts now call for a longer summer season with temperatures staying unseasonably warm through October. Natural gas futures advanced to a six-week high in New York as a burst of late-summer heat slowed stockpiling of the power-plant fuel.Above-normal temperatures will sweep from Texas to the Northeast through next week, said MDA Weather Services. A government report showed gas inventories expanded last week at the lowest rate since May 2 after hot weather across much of the central U.S as reported by Bloomberg.

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