WEEKLY BULLION REPORT-16 Mar To 21 Mar 2015

GOLD

Gold added $3.40 but remains bearish and is trading at 1155.30 as the US dollar returned toward record levels. The US dollar is trading at 99.57. Gold prices are higher on some cooling in the dollar index but are still headed for a sixth weekly loss in the past seven weeks on expectations of a Fed rate hike. Gold trimmed a second weekly decline, rebounding from the longest slump in 17 years, as investors weighed data for clues on when the Federal Reserve may raise interest rates in the world’s largest economy.

SILVER

Silver added 14 points to trade at 15.53 after soaring in the Asian session the shiny metal gave back most of its earlier gains as the US dollar recovered.

COPPER

Copper gave back a bit of  gains but remains strong as traders hope that the Chinese will introduce new stimulus programs. Copper is trading at 2.653. The price of base metals declined in the past two weeks by 1.2% on average. In fact, at the end of the commented period the price of aluminum had dropped to a two-month low. Expectations of a forthcoming rise in official interest rates in the USA and the related strengthening of the American dollar did no favors for copper and other metals. Practically no relevant or lasting response was provoked by the rate cut in China.  However, the metals market may be far from dull in the coming months. The potential implementation of even stricter rules for the dispatching of metals from the LME and the rising rates in the USA could lead to a faster degradation of  supplies and thereby a decline in prices. The copper price increased by 2% yesterday as China’s credit growth in February exceeded market expectations and spurred  bets on stronger demand for the metal.

CRUDE OIL

Crude Oil tanked last falling 73 cents to trade at 46.32 while Brent Oil gave up 57 cents to 56.51 as oil prices continue to bottom as global production and storage reach record levels.  The new EIA short term forecast, it unveiled that the agency slightly revised its forecast for this year’s US oil production to the upside (in comparison with the last month’s report). Moreover, the agency says that “projected 2015 oil prices remain high enough to support continued development drilling activity” in the key shale regions, though the pace of production growth is expected to slow down  vis-a-vis the previous years. The agency added that “the forecast remains particularly sensitive” to actual oil prices.

NATURAL GAS

Natural Gas is trading at 2.700 down by 34 points as traders reviewed winter weather reports and last inventory report. The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week  ended March 6 fell by 198 billion cubic feet, compared to expectations for a decline of 191 billion. Supplies fell by 189 billion the same time last year, while the five-year average change for the week is a decline of 116 billion cubic feet. Total U.S. natural gas storage stood at 1.512 trillion cubic feet. Stocks were 483 billion cubic feet higher than last year at this time and 225 billion cubic feet below the five-year average of 1.737 trillion cubic feet for this time of year. A day earlier, natural gas for delivery in April jumped 9.2 cents, or 3.37%, to settle at $2.824 amid expectations this week’s storage data will show a significant gas withdrawal.

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