Tuesday, January 6, 2015

Gold price rallies into teeth of rabid dollar

Commodities priced in US dollar usually have an inverse relationship to the world's reserve currency.
None more so than gold.
The gold price jumped the $1,200 barrier on Monday, but given the turmoil on markets and fears of a Lehman-magnitude crisis in the Eurozone, the metal would be expected to be trading higher than it is.
The greenback hit an all time high in February 1985 just as gold bottomed at $284 an ounce
The only thing keeping it back is the stronger US dollar.

On Monday, the greenback hit the highest level since November 2005 against the currencies of major US trading partners, with the dollar index topping 92.
That compares to a record low of 71.6 in April of 2008 and a record high of 164.72 in February 1985 when the price of gold bottomed at $284.25 an ounce.
While the gold price is now back to levels seen in January last year, the dollar strengthened 13.2% during 2014, with almost all the gains coming since August.
Plotted against the greenback on the basis of the past correlation between the two, the price of gold may now be expected to be touching $1,100 as this graph from Saxo Bank suggests:
Gold price rallies into teeth of rabid dollar

The Philippine ban on nickel spooks out LME

The Philippine ban on nickel spooks out LME
After the Indonesian government, had declared the ban on the export of nickel ore, its on he Philippines that the whole demand of China is depended.the news that the Philippines is also planning to follow the path of Indonesia has created a kind of panic alert in the market of nickel. But a temporary relief was bought in, when the government of Indonesia itself declared that, the ban will be only after a few years.
At the London Metal Exchange, the benchmark price of nickel declined 1000 dollars to 18,925 dollars on Tuesday; a three month collapses, wiping clean all the profits gained by nickel in the previous days. Even so the news  of the nickel export ban in  the Philippines has highly affected the market, not sure whether to invest in the sinking ship or not. And it can be fairly stated that, the reason behind the recent lagging in the market. It might also turn out to be the effect of recent rumors that have been set out
After the ban announced by the Indonesian government, due to the decline in the price of the commodity in the market, has actually affected the whole base metal strategy. After Indonesia has put on a ban on the export of the commodity, the Philippines were in charge of the commodity’s distribution. The export ban has mostly affected China and also many other countries, who used to be highly depending on nickel, for the production of stainless steel in the market.

Sunday, January 4, 2015

Natural gas eases off 2-year lows on cold weather outlook

Natural gas eases off 2-year lows on cold weather outlook
Natural gas futures were higher on Friday, easing off two-year lows as reports of an outbreak of cold January weather was expected to stoke demand for the heating fuel.
On the New York Mercantile Exchange, natural gas futures for delivery in January were up 4.83% at $3.029 per million British thermal units during U.S. morning trade.
Natural gas futures found support after the U.S. government’s Global Forecast System published earlier in the week showed "a stronger cold push" in the Midwest.
The report also showed lower temperature readings for the Plains, Texas and the Northeast for January 3 through January 7, while forecasts turned colder in the central and northern mid-Atlantic regions for the following five days.
However, forecasts from Commodity Weather Group on Friday indicated that the weather in January will be 6.7% warmer than a year earlier.
Natural gas prices dropped below $3 per million British thermal units last week to the lowest level since September 2012, as unusually mild winter weather limited demand while production soared.
On Wednesday, the U.S. Energy Information Administration said in its weekly report that natural gas storage fell by 26 billion cubic feet last week, compared to expectations for a decline of 38 billion after a drop of 49 billion in the previous week.
Total U.S. natural gas storage stood at 3,220 trillion cubic feet.
Approximately 49% of U.S. households use gas for heating, according to the EIA, the statistical arm of the Energy Department.

Saturday, January 3, 2015

Nickel prices likely to move higher in 2015

Nickel prices likely to move higher in 2015
The rapid change in fundamentals led to high volatility in Nickel prices in 2014. The volatility is expected to continue in 2015, according to analyst reports.
The expectations of an interest rate hike by the US Fed and the feared slowdown in Chinese economy are the major drivers for base metal prices this year. The Nickel prices plunged almost 22% from its peak to close 2014 at $14,935 a tonne. The prices had hit its yearly high of $21,200 a tonne after the imposition of ban on exports by Indonesia. The suspension of production at the Koniambo mines in New Caledonia further support Nickel prices in 2015.
According to latest forecast provided by the London-based consultancy Natixis Commodity Markets, the Nickel prices are likely to average nearly $19,000 a tonne in 2015. This is almost 13% higher than the 2014 average price of $16,867 a tonne. Natixis believes that prices may get adequate support due to supply concerns. However, easing of such concerns would lead to drop in nickel prices in 2016. It predicts the average price in 2016 at $17,375 a tonne.
Natixis forecasts the average price for copper at $6,335 a tonne, aluminum at $2,071 a tonne, zinc at $2,523 a tonne and lead at $2,145 a tonne for 2015.

US Debt Soars By $100 Billion On Last Day Of 2014, Hits Record $18.14 Trillion

It seems like it was only yesterday when we reported that, in yet another sleight of hand for the US Treasury and Social Security Administration, US debt rose by $32 billion on the last day of November sending total US debt above $18 trillion for the first time ever.  As we further noted, it also meant "that total US debt has increased by 70% under Obama, from $10.625 trillion on January 21, 2009 to $18.005 trillion most recently."
Fast forward to today when we are happy to report that according to the US Treasury, America's debt-funded spending spree, while supposedly slowing down if looking at the declining monthly budget deficit report, never actually has.
US Debt Soars By $100 Billion On Last Day Of 2014, Hits Record $18.14 Trillion
As of the last day of 2014, total US debt soared by $98 billion in one day (driven again by Social Security debt surging on the last day of the month to a record $5.117 trillion), and closing off 2014 with a new all time high total of $18.141 trillion in Federal debt - an increase of $136 billion in the month of December and $790 billion for all of 2014.
US Debt Soars By $100 Billion On Last Day Of 2014, Hits Record $18.14 Trillion
Source: US Treasury

Friday, January 2, 2015

And The Second Best Performing Currency Of 2014 Is... Gold

And The Second Best Performing Currency Of 2014 Is... Gold
Arguing that gold is not a currency?
GREENSPAN: Yes... Remember what we're looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it.

Chinese November net Lead product exports hit 2014 high of 5,547 tons

Chinese November net Lead product exports hit 2014 high of 5,547 tons
China’s net exports of lead products, which include refined lead, lead alloy, lead plate, and other lead semis, hit 5,547 tons in November, the highest thus far in 2014, Customs reported.

China imported 1,402 tons of lead products in November, and exports climbed to 6,949 tons.

4,672 tons of refined lead and 1,872 tons of lead plate were shipped from China in November, with their combined number representing 94.2% of total lead product exports for the same month.

The SMM/LME lead price ratio left few profitable opportunities for lead exports, but many Chinese companies exported refined lead and lead plate in the form of processing trade, driving up the export volumes.

Taiwan and Vietnam were still major buyers of refined lead from mainland China, while lead plates were primarily exported to ASEAN members.