WEEKLY BULLION REPORT-15 Dec To 20 Dec 2014

GOLD

Gold is flat at 1225.40 moving between losses and gains ahead of the Federal Reserve meeting this week. Gold slipped on Friday as the dollar rose after robust US economic data but the metal was on track for its biggest weekly climb since June following gains earlier in the week from safe-haven demand.  Bullion’s weakness on Friday came as the dollar rose against most other major currencies, thanks in part to US retail sales data that provided fresh evidence of momentum in the economy. Strength in the economy and the greenback dulls the appeal of gold, often seen as a hedge. Higher equities also hurt bullion. Movements in the energy markets were also being watched by bullion investors as weaker oil prices could limit demand for gold, an inflation hedge. . Earlier in the week, gold had gained as global equities and the dollar tumbled on concern about global growth and political uncertainty in Greece, plus some profit-taking. The metal climbed to a seven-week high of $1,238. 

SILVER 

Silver is trading at 16.405 remaining in a tight range this week but bouncing around all week with huge gains and losses.  Silver prices stretched into fresh three-week highs along with Gold after the People’s Bank of China made a surprise rate cut to its benchmark interest rates in an attempt to further support economic growth. The central bank lowered one year deposit rates by 25 basis points to 2.75% while one year lending rates were slashed by 40 basis points to 5.6%.

COPPER

Silver added 68 points to trade at 17.18 while Copper gained 17 points climbing off its bottom on strong Chinese data. Copper headed for a second weekly gain on speculation demand is supported by the world’s largest users of the metals the U.S. House narrowly passed a spending bill and amid expectations China’s slowdown may spur stimulus. Copper reversed earlier losses and rose as much 0.3% after the House passed a $1.1 trillion spending measure hours before government funding was set to run out. The Senate may approve it as soon as today. Industrial production in China grew by 7.2% in November, according to the National Bureau of Statistics. That’s below the 7.5% forecast in a Bloomberg News survey before data today. Chinese industrial production slowed for a second month in November. China’s policy makers lowered their economic growth target for 2015, China Business News reported today, without saying by how much. The country is forecast to expand by 7% next year, the slowest pace since 1990, according to the median estimate of economists surveyed by Bloomberg News.

CRUDE OIL

January Crude Oil futures continued to decline with the market falling below $59.00 per barrel. Sellers continued to exert pressure after the International Energy Agency cut its 2015 forecast for global oil-demand growth by 230,000 barrels a day. The IEA cited “lower expectations for the former Soviet Union and other oil-exporting countries,” as reason for the downward adjustment in the forecast. The drop in prices is raising concerns with several OPEC members including Iran, Iraq and Venezuela. Saudi Arabia which is sitting on a heap of cash believes that oil prices will find its own level of support without any production cut by the oil cartel. U.S. producers may also start to feel some pressure to reduce output as prices near the psychological $50 level. Oil prices traded as low as $35 per barrel in February 2009. 

NATURAL GAS 

Natural Gas gained 61 points to trade at 3.715 as the weather became colder in the Northeast while the longer term forecast is also showing colder temperatures.  The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 51 billion cubic feet for the week ending December 5, compared with an expected decrease of between 40 billion and 50 billion cubic feet anticipated by analysts. Moderate winter temperatures in the past week or so are expected to give way to colder temperatures beginning next week. For most of the United States in the week ending Friday, temperatures will be warmer than a year ago and will lessen the demand on natural gas. Temperatures are forecast to fall across the Great Lakes and Northeast next week, raising demand and prices for natural gas.  

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