Market Nuggets


Market Nuggets: Barclays: Global ETP Inflows For March So Far In Gold, Silver, Platinum

21 March 2011, 11:49 a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) -- For March so far, there have been inflows into global gold, silver and platinum exchange-traded products, reports Barclays Capital. In the case of gold, total ETP holdings around the world rose 11.2 metric tons on Friday to take inflows for the month to 27.2. Silver ETP inflows are up 367 tons so far this month. Platinum ETP inflows are up 46,000 ounces. However, palladium inflows are down 155,000 ounces for March so far, Barclays says. The recent earthquake and tsunami in Japan have affected demand platinum group metals, especially palladium, Barclays says. Most auto production in the country has been suspended, and the main industrial use for PGMs is auto catalytic converters.

By Allen Sykora of Kitco News; asykora@kitco.com

Market Nuggets: Assets In ETF Securities’ U.S.-Listed Products Top $4 Billion

21 March 2011, 11:42 a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) -- Total assets for seven U.S.-listed exchange-traded products for precious metals, managed by ETF Securities USA LLC, topped $4 billion this month, the company reports. Some of the factors fueling the interest, ETF Securities says, are the continued turmoil in the Middle East-North Africa region and global inflation concerns. The seven products are ETFS Physical Swiss Gold Shares, ETFS Physical Silver Shares, ETFS Physical Platinum Shares, ETFS Physical Palladium Shares, ETFS Physical Precious Metals Basket Shares, ETFS Physical White Metal Basket Shares and ETFS Asian Gold Shares.

By Allen Sykora of Kitco News; asykora@kitco.com

Market Nuggets: Barclays: Chinese Trade Data Show Weak Copper-Market Conditions In February

21 March 2011, 10:50 a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) -- Chinese trade data suggest weak market conditions for copper in February, although imports are likely to strengthen down the road, say analysts with Barclays Capital. Refined copper imports fell 28% year on year to 158,185 metric tons. Also, the country’s refined copper exports also dipped, Barclays says. Meanwhile, concentrate imports fell 30% year on year to the lowest level since August 2008, while scrap imports fell 11% YOY to their lowest level since February 2009. “In sum, total copper metal-unit imports fell to the lowest since August 2008,” Barclays says. “While some of the weakness in the numbers can be attributed to seasonal reasons (Chinese New Year and fewer days in February), it also goes some way to confirm the broadly weak demand picture inferred for the month. We expect imports to strengthen in the months ahead, however.”

By Allen Sykora of Kitco News; asykora@kitco.com

Market Nuggets:VM Group: Platinum/Palladium Ratio May Approach Parity If Russian Stockpiles Exhausted

21 March 2011, 10:45 a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) -- If Russian state stockpiles of palladium are in fact nearly depleted, the platinum/palladium ratio could approach parity, says a monthly metals report from VM Group and ABN AMRO Bank.  Analysts say palladium tumbled from a 10-year high as Japanese automakers suspended production following a massive earthquake, with uncertainty about when full output will resume and when platinum/palladium prices will recover. “But recover they will,” the report says. Meanwhile, Russian palladium shipments to Switzerland fell to the lowest level in 15 years, a sign of dwindling Russian stockpiles. “If Russian state stockpiles are indeed exhausted, then our estimated deficit will widen significantly, and in doing so the platinum:palladium ratio may very well approach parity in the not-so-distant future,” the report says. “The palladium price should continue to rise in the short term, boosted by an optimistic U.S. auto sector and a weak dollar, but disruption to Japan’s car industry might weigh.” The report lists a short-term, one-month outlook for London p.m. fixings of $1,600 to $1,735 an ounce for platinum and for $640 to $740 for palladium.  For platinum, the outlook is $1,750 in two months and $1,850 in 12 months, with an average 2011 forecast of $1,777. For palladium, the outlook is $760 in two months, $875 in 12 months and an average of $819 for 2011.

By Allen Sykora of Kitco News; asykora@kitco.com

Market Nuggets: VM Group Revises Lower Forecast For Copper Deficit In 2011

21 March 2011, 10:36 a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) -- VM Group has downwardly revised its 2011 copper supply/demand deficit. A report by VM and ABN AMRO Bank lists a short-term, one-month outlook for copper prices of $8,800 to $9,500 a metric ton. Headwinds in recent weeks include weak physical premiums, a decline in Chinese copper imports last month, rising exchange inventories, political unrest in the Middle East-North Africa region and higher oil prices that could affect global growth and a short-term negative effect on demand from the Japanese earthquake. Copper may have “overshot” its fundamentals when it rose earlier this year, and prices may need to fall to tempt buyers, especially China, analysts say. “Given that there are plenty of stocks available in China, imports may undershoot previous expectations, while uncertainty remains over Japanese demand in the near term,” the report says. Thus, VM Group has adjusted its estimated copper deficit for 2011 lower to 370,000 metric tons from 460,000. The report lists a two-month forecast of $9,650, a 12-month forecast of $9,000 and a 2011 average forecast of $9,562.

By Allen Sykora of Kitco News; asykora@kitco.com

Market Nuggets: VM Group Short-Term Outlook: 'Upside Risks' For Gold Continue

21 March 2011, 10:18 a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) -- A monthly metals report from VM Group and ABN AMRO Bank lists a short-term, one-month outlook for London p.m. gold fixings of $1,380 to $1,450 an ounce. Any turmoil in equities could dampen gold prices if panic selling means liquidation in gold to cover losses elsewhere, the report says. “Yet bargain hunting on dips below $1,400/oz are sure to lend support to prices either side of that threshold,” the report says. “Upside risks to the price will continue to come from geopolitical risk in the Middle East, economic uncertainty and outright disaster risk based on Japan. Gold could rise further on the back of higher energy costs, specifically if unrest in Libya spills over into other parts of the Arab world and reconstruction efforts in Japan lead to price gains in coal, crude and natural gas.” The report lists a two-month target of $1,475 but a 12-month forecast of $1,200. The 2011 average forecast is $1,451.

By Allen Sykora of Kitco News; asykora@kitco.com

Market Nuggets: VM Group Short-Term Outlook: 'Bull Narrative' For Silver 'Appears Convincing'

21 March 2011, 10:18 a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) -- A monthly metals report from VM Group and ABN AMRO Bank lists a short-term, one-month outlook for London silver fixings of $33.50 to $38.50 an ounce. Analysts cite a report from the Bombay Bullion Association saying Indian silver imports could rise as much as 25% in 2011, while Chinese January data suggest net imports could rise as much as 30% this year. “The bull narrative for silver therefore appears convincing,” says the report. “The price is still far below its real all-time high and it is considerably cheaper than gold – it thus provides a cheaper alternative to hedge against risk. That said, Japanese industrial demand will soften following the earthquake, tsunami and nuclear plant crisis, and liquidation will ensure some sideways trading in the near term.” The report lists a two-month target of $39 but a 12-month forecast of $26.50. The 2011 average forecast is $32.20.

By Allen Sykora of Kitco News; asykora@kitco.com

Market Nuggets: RBC: Base Metals Back To Levels From Prior To Earthquake In Japan

21 March 2011, 9:25 a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) -- Base metals are higher so far Monday, supported by a softer U.S. dollar, higher oil prices and stronger equities, says RBC Capital Markets. They note most base metals are back near, or even ahead, of their pre-Japan earthquake/tsunami levels. This comes on the heels of a strong close last week for the whole base complex, RBC says. “The waves of fund liquidation which took prices to lows early on in the week have clearly now been absorbed and thus further technical losses averted,” RBC says. “These moves were accompanied by huge volumes, particularly on copper--so there  has  clearly been a ‘transfer of ownership’ of the longs, which supports our view that these metals are not going to be ‘allowed’ to fall/fail almost regardless of  the current fundamental picture.” Japan is still in the process of digging out and assessing damage.  “Any rebuilding effort which would actually increase consumption--and hence demand for industrial materials, including base metals--would still seem a ways off as long as the risk of nuclear damage remains,” RBC says. “Never-the-less there is a lot of momentum buying out there.”

By Allen Sykora of Kitco News; asykora@kitco.com

Market Nuggets: IAI: World Aluminum Output Falls 186,000 Metric Tons During February

21 March 2011, 8:39 a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) -- World aluminum output fell 186,000 metric tons, or 8.7%, in February to 1.949 million tons, the International Aluminum Institute reports. On a year-over-year basis, however, output rose 133,000 tons. For the month of February, the largest output declines occurred in North America, down 37,000 tons; West Europe, down 30,000 tons; and Eastern/Central Europe, down 35,000 tons.

By Allen Sykora of Kitco News; asykora@kitco.com

Market Nuggets: Gartman: Weak Dollar, Anticipation Of Japanese Rebuilding Boost Commodities

21 March 2011, 8:27 a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) -- Commodities in general are starting the week higher. The U.S. dollar weakens, which tends to support commodities, says newsletter writer Dennis Gartman. “However, there is more than mere weakness in the U.S. dollar at work here; there is the rebuilding that shall take place in Japan that is at work, putting a bid into copper, or into lumber, or into other raw materials that shall be needed there,” he says in The Gartman Letter. “Too, the irradiation of Japanese food supplies almost certainly shall put a bit into foodstuffs. Certainly the New Zealand milk producers are going to enjoy a huge ramping up of demand for their products as milk supplies have been shown to contain disconcertingly high levels of radiation in Japan in and around Fukushima.”

By Allen Sykora of Kitco News; asykora@kitco.com

Market Nuggets: Commerzbank: Weak U.S. Dollar Adds To Support In Gold Prices

21 March 2011, 8:09 a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) -- Some of the support in gold is coming from a weak U.S. dollar and expectations that Western central banks could use the crisis in Japan as justification for maintaining their ultra-loose monetary policy, says Commerzank. “We expect the price of gold to rise further in the current climate and reach its record level of $1,445 a troy ounce,” the bank says. “Pulled along by gold, silver should make stronger gains and test the 31-year high of just below $37 a troy ounce.”

By Allen Sykora of Kitco News; asykora@kitco.com

Market Nuggets: Morgan Stanley: Military Strikes In Libya To Mean Near-Term Rise In Gold

21 March 2011, 7:45 a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) -- Morgan Stanley looks for the increased tensions and uncertainty in Libya to offer further support to gold. Coalition forces have backed up a no-fly zone meant to protect Libyan civilians, with air strikes that included the Tripoli compound of Libyan leader Moammar Gadhafi, who vowed a “long” war. “Gold prices…will likely climb higher in the coming days with the start of military strikes in Libya,” says a weekly commodities report issued by Morgan Stanley Sunday night. Ahead of the New York pit open Monday, Comex April gold is already up $15.10 to $1,431.20 an ounce.

By Allen Sykora of Kitco News; asykora@kitco.com

Comments