Commodity Blog

Posts Tagged ‘Barclays Capital’

Copper recovered from the previous losses as economists expect that growth of demand will outpace increase of supply. The economic recovery is gaining momentum and demand for industrial metals grows. Lower demand from Japan after the disastrous earthquake and the tightening in China still can hurt the metal.

The International Copper Study Group estimated that the global consumption will rise 4.5 percent to 19.7 million metric tons this year. At the same time, the output will increase only 1.1 percent to about 19.3 million tons. That means a deficit of 435,000 tons.

Yingxi Yu, a commodities analyst at Barclays Capital, said:

We’re still positive on the economic recovery. We don’t think the events in the Middle East and Japan will derail the global economic recovery so anything that’s leveraged to economic recovery will still be relatively attractive.

Contract for delivery of copper in three months advanced 0.7 percent to $9,450 per metric ton on LME. The metal gained 0.6 percent to $4.2985 per pound on COMEX. Copper traded at $9,435 in Singapore, while it fell 1.5 percent to 70,230 yuan ($10,721) per ton on Shanghai Futures Exchange.

Suki Cooper of Barclays Capital explains here analysis and forecast for the average price of gold for 2011 in this video. The main bullish driving factor for the commodity is seen in the physical gold market and its still rising popularity. A peak in gold prices will be probably indicated by the ETF market pullback. Gold is still attractive in a short-term perspective.

Gold gained and crude oil reversed losses on the concerns about the uprising in Libya. The Libyan unrest caused the oil supply from the country to decline by two-thirds. The uprisings in Egypt and Tunisia toppled the governments. The shift of power inspired the demonstrations in Bahrain and Yemen.

Libya supplies 1.6 million barrels of oil per day (about 1.8 percent of world supply). Barclays Plc reported that about 1 million barrels of Libya’s daily oil production has been stopped. Goldman Sachs Group Inc. put estimates of disruptions around 500,000 barrels per day.

April futures for gold delivery gained $1.80 to $1,415.80 per ounce as of 13:30 on COMEX after reaching earlier $1,418.80, the highest price since January 3. The gains were limited as the traders used the high prices to take some profit by selling the metal. Crude oil advanced $0.38 (0.4 percent) to $97.66 per barrel in electronic trading on NYMEX after it earlier dropped 0.7 percent.

Crude oil dropped today as US nonfarm payrolls posted a much lower growth than was expected, causing concern that demand in the US, the biggest consumer of fuel, will dwindle. The nonfarm payrolls increased only by 36,000, while an increase by 138,000 was expected. Contract for delivery of crude oil in March dropped $1.51 to $89.03 per barrel on NYMEX.

Gold declined today as the unemployment rate in the US managed to decrease even with the bad payrolls. US jobless rate was predicted to increase, but it dropped instead from 9.4 percent to 9.0 percent. April futures for gold delivery declined $4 (0.3 percent) to $1,349 per ounce as of 13:15 on COMEX.

Copper advanced today to the record on the speculation that demand will continue to grow with the global economic recovery, while output will lag behind increasing consumption. Barclays Capital predicted that the world supply deficit will reach 822,000 metric tons this year. March futures for copper delivery gained $0.035 (0.8 percent) to $4.5795 per pound by 13:26 on COMEX after reaching earlier a record $4.614.

Corn futures fell today on the outlooks for better crops, following the rains in the American Midwest. The traders expect larger crop yield with a big portion of it being in a rather good condition. The forecasts for the average bushel-per-acre yield went up from 159.5 to 162.5 in less than two weeks. Analysts point out the fact that the improved weather conditions for crops in August have always meant better yield and thus have always pushed certain agricultures’ prices down. December corn futures declined by $0.0225 (0.7 percent) to $3.3325/bushel as of 10:53 at Chicago Board of Trade.

Latest technical analysis from Barclays Capital suggests a highly probable break through $1,000/ounce mark for the gold quite soon. The patterns similar to those, that managed to push the gold up last year, are currently showing up on the charts, while the 200-day moving average suggests that the gold is still in an uptrend. Today gold fell from $953.03 to $944.64 (losing 0.9%) as of 17:13 GMT.