Energy and Metals Review

Jun 29 • Market Commentaries • 3486 Views • Comments Off on Energy and Metals Review

Gold fell to the lowest level in almost 4-weeks amid signs of slowing US growth while dollar gained on speculation that European Union leaders will struggle to solve the debt crisis. Gold has lost its safe haven title as investors begin to move into the risk markets. Although risk aversion remains the theme with no additional stimulus from the Feds, gold is no longer the safe haven of choice. Gold will close the month and the quarter at a loss.

Silver slumped to the cheapest in 19-months. Gold holdings  of SPDR gold trust, the largest ETF backed by the precious metal, increased to 1,281.62 tons, as on June 18. Silver holdings of iShares silver trust, the largest ETF backed by the metal, increased to 9,875.75 tons, as on June 22. With a decline in global production, most industrial metals continue to decline. Silver falls in both the precious metals group and the industrial metals pack.

South Korea purchased a total of 6,000 tons of aluminum for arrivals by Sept. 20 via tenders on June 28, as per the state-run Public Procurement Service. Demand for aluminum has dropped so low the Alcoa has announced major layoffs.

Japan’s imports of nickel ore from Indonesia jumped 81% in May to 200,176 tons last month, compared with 110,679 tons a year earlier, as per the finance ministry data.

Crude oil futures fell as much as 3%, on worries that an EU summit will not find durable solutions to the euro zone’s crisis, which could dent the futures energy demand. This week’s EIA inventory showed a small drop in stocks but was under forecast.


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Norwegian oil production has been further cut by 290,000 barrels per day, according to a union official, from 240,000 bpd earlier this week, as oil workers’ strike that began on Sunday continued, with no signs of a resolution.

Iranian Oil Minister warned South Korea on Thursday, that Tehran would reconsider ties with Seoul if the country stopped importing oil from Iran, as per official IRNA news agency.

The Obama administration, which has imposed global financial sanctions intended to curtail business with Iran, has granted exceptions to the sanctions to China and Singapore.

Natural gas futures dropped for the first time in 6-days, after a government report showed that US stockpiles rose more than expected last week.

The Energy Information Administration said supplies of natural gas grew by 57bn cubic feet to about 3.06tln cubic feet last week.

A proposal from Japan to allow the exportation of Natural Gas from the US to Japan, is under review at the EIA with support from the Administration. This would be a great boost for Natural Gas with its limited demand and huge growth in the United States.

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