WEEKLY BULLION REPORT-20 Apr To 25 Apr 2015

GOLD

Precious Gold bounced around all week holding under the $1200 level most of the week but reversed course on Friday to end the week at 1203.80 gaining  $5.30. Silver marched to a different drummer falling on Friday to trade at 16.23 and Platinum soared to 1171.90 adding $12.70 at the close of the week. Gold dropped to a low of 1200.75/1201.75 on dollar strength after U.S. economic data showed Core CPI coming slightly above consensus at 1.80% (annualized) – not  far from the U.S. Fed target annual inflation rate of 2.00%. The metal then recovered to a high of 1207.25/1208.25 as global equities declined following news of a crackdown on margin lending by Chinese stock market regulators.    SILVER Silver closed lower this week at 16.28. Similar to gold, silver has held its major low at 14.28 from December 2014; with a subsequent higher low in 15.29. However,  for the weekly chart to turn bullish we would also need to see a higher high, above the 18.48 high from earlier this year. The gold-silver ratio traded higher this week, testing the top of the bearish trend channel that has been in place since December 2014. The top of the channel comes in at 74.35; the ratio is currently at 74.02.

COPPER

Chile is responsible for a third of the world’s mined output of copper with many of the largest mines located in the Atacama desert. Before the unusual weather this week, a drought was reducing production as a result of water restrictions  imposed by the authorities. In April 2014 a major earthquake also temporarily halted output at a number of large mines. copper has been consolidating since hitting near six-year lows in January. China's economy probably cooled further to grow 7% in the first three months of the year, a Reuters poll showed, which would be the weakest pace in six years and raise pressure on policymakers to do more to bolster growth.

CRUDE OIL

Crude Oil gave back some of this week’s strong gains to trade at 55.99 falling 72 cents on Friday as traders booked profits. Brent Oil fell only 27 points as OPEC member continue to pump record amounts of oil but Iran called for a rollback of 5%.OPEC said its oil production surged in March, sending crude prices lower. March production jumped 810,000 barrels per day (bpd) to 30.79 million bpd, which is equivalent to a third of global supply. Dipping output from the U.S. and other rival producers due to oil prices halving since last June increased demand for  OPEC’s supplies, the organization said.

NATURAL GAS

Natural Gas reversed earlier gains to trade near its lowest point to close at 2.641 falling 43 points on Friday as traders looked at the updated weather forecast and  Thursday’s inventory report. Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. declined by 34 this week to 954 amid depressed oil prices.Houston-based Baker Hughes said Friday 734 rigs were seeking oil and 217 explored for natural gas. Three were listed as miscellaneous. A year ago, 1,831 rigs were active.

The Energy Information Administration, the underground storage injection reached 63 Bcf – this was higher than the 5-year average and above the market expectations. Following last week’s injection, the storage picked up to 1,539 Bcf, which is still 8.6% lower than the same the 5-year average.

This time a year ago, the United States produced about 66 Bcf/d of natural gas and the national average price of next-day delivered natural gas was $4.59/MMBtu. Today, the US is producing roughly 72 Bcf/d of natural gas and the average national price of next-day delivered gas, as of April 13, was $2.35/MMBtu. It is safe to say that we are in an environment of depressed prices and surplus supply.  

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