Metals and Energy Ignore Eco Data

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Yesterday, markets were fairly quiet, with low volume and little activity. Traders seemed to be totally fixated on Friday’s address by Mr. Bernanke and the upcoming ECB meeting. Almost every news article fundamental and technical analysis report was focused on Jackson Hole and central banks. The upwardly revised US GDP or the skyrocketing housing data had little effect on the currency markets. This morning, Japanese retail sales tumbled, printing well below forecast and still no response.

Yesterday gold futures declined, as upwardly revised figures for US economic growth triggered profit booking in the precious metal after its recent rally above $1,675 per ounce, on speculation of new stimulus from the Federal Reserve. Gold holdings  of SPDR gold trust, the largest ETF backed by the precious metal, increased to 1,289.52 tons, as on August 28. Silver holdings of iShares silver trust, the largest ETF backed by the metal, declined to 9,763.53 tons, as on August 28.

The ICE dollar index, which tracks the greenback against a basket of six major currencies, rose to 81.551, compared to 81.334…

Copper fell to a one-week low in heavy volume on Wednesday, pressured by signs of economic slowing in metals demand from China and nervousness ahead of central bankers meeting later this week.

Copper consumption in China, the world’s biggest user, is expected to expand this year at the slowest rate since 1997 as economic growth cools; according to Beijing Antaike Information Development Co. Copper usage may increase 5% to about 7.7mn tons supported by demand from the power industry.

Japan’s nickel imports from Indonesia rose 85% from a year ago to 190,445 tons in July, as per customs-cleared data.

Crude and Brent oil prices declined after US crude stockpiles unexpectedly gained and Hurricane Isaac made landfall, reducing the threat to offshore platforms and rigs in the Gulf of Mexico.  Still WTI crude oil only dipped 1.00 to trade at 95.00.

Japanese crude oil imports from Iran fell sharply in July from a year ago, but imports continued despite a halt in loadings by Japanese buyers to avoid running afoul of a European Union ban on insuring cargoes from the Middle East nation. Japans July crude imports from Iran totaled 126,726 barrels per day last month (624,585 kilolitres), down 52.5% from the same month a year ago.

Crude stocks, excluding oil held in the Strategic Petroleum Reserve, rose by 3.78mn barrels to 364.52mn barrels, gasoline inventories fell 1.51mn barrels last week to 201.23mn barrels and distillates, which include diesel and heating oil, rose 873,000 barrels to 126.08mn barrels, as per EIA.

Natural gas rallied nearly 1%, on news that Hurricane Isaac has prompted more production to go offline and on fears that flooding from the storm could damage the region’s natural-gas infrastructure.

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About: FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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