WEEKLY BULLION REPORT-5 Jan To 10 Jan 2015

GOLD 

Gold reversed course and added $4.40 on Friday as traders remain unsure what to expect from the metal with several major banks meeting over the next weeks as well as growing concern on Greek politics. It seems that the new front runners in the Greece elections think they can force the troika to renegotiate loan terms. The IMF has cut off Greece’s funding and the Eurozone is about to do the same. Liquidity was thin in post-holiday trading, with Chinese and Japanese markets closed. Prices were heading for a 0.5 percent weekly decline, the third straight week of losses. Gold inched up on Friday as higher oil prices boosted its safe-haven appeal, but the metal looked set to post its third straight weekly loss, weighed down by a strong dollar. Bullion ended 2014 down nearly 2 percent, as its investment appeal tapered amid betterperforming equities. Many analysts expect another tough year for gold, with the dollar expected to gain further on expectations of higher US interest rates and a recovering economy. A stronger dollar, global deflationary pressures, slowing Chinese demand and higher rates will hurt gold prices. 

SILVER 

Silver gained 126 points taking some cues from gold but mostly on bargain hunters early in the year picking up the cheap commodity which closed at 15.725. Bullion ended 2014 down nearly 2 percent, as its investment appeal tapered amid better-performing equities. Many analysts expect another tough year for gold, with the dollar expected to gain further on expectations of higher US interest rates and a recovering economy. A stronger dollar, global deflationary pressures, slowing Chinese demand and higher rates will hurt gold prices. 

COPPER

Copper dipped another 10 points to trade at 2.816 its lowest price in the past 12 months as the US dollar gained momentum. London copper slipped on Friday to trade near last week’s 4-1/2 year low, pressured by a strong dollar and indications of slowing economic growth in China. Copper on the London Metal Exchange traded down 0.8 not far from 2.818 which it hit last week, its lowest level since June 2010. China’s factory activity sputtered in December, underlining the challenges facing the country’s manufacturers as they fight rising costs and softening demand in a cooling economy. 

CRUDE OIL 

Crude Oil closed the week at 52.64 its lowest close in the 2014-15 season as the strong US dollar weighed on the commodity and disappointing manufacturing PMI from the Eurozone and lackluster Chinese numbers weighed on implied demand. Brent Oil ticked down 90 cents to close the week at 56.44 its lowest close in years.

Brent has fallen to its lowest in more than five years as top exporter Saudi Arabia and other large Gulf producers continue to pump oil, while US shale oil output grows quickly, despite pleas from other Organization of the Petroleum Exporting Countries members to rein in production and shore up prices. Oil production by OPEC countries reportedly fell last month, according to a Bloomberg report. The report comes after OPEC member countries decided at their November meeting not to cut production. Bloomberg said oil production by OPEC countries fell by 0.4% in December. The fall in production is said to have come from Saudi Arabia, Libya and the United Arab Emirates. The countries have so far not officially revised their production targets. There was no sign that producers would cut production in response to the slump. OPEC’s production dropped 122,000 barrels a day from November to 30.24 million in December, a Bloomberg survey indicated. Russian oil output rose 0.3% in December to a record of 10.667 million barrels a day, according to the data from the Energy Ministry. 

NATURAL GAS 

 Natural Gas closed the week at 2.966 adding 7 points as storms and rain blanketed the US hopefully increasing consumer demand. The unexpected closing of nuclear plants in the Northeast also improved the demand for natural gas.  Natural gas gained on forecasts of cold temperatures next week, but expectations of warmer weather the following week held prices near two-year lows. Natural gas sank below $3 a million British thermal units for the first time in more than two years Wednesday and posted a 32% loss for 2014. Gas consumption climbed this week as temperatures dropped in the Midwest to the East Coast, boosting storage withdrawals.  After they came in below-average for five consecutive weeks. 

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