Market Movers: Commodities Update 5/27

by on May 27, 2014 5:45 pm BST

Gold & Silver: Gold has picked up extreme bearish movement since early Tuesday trade. Price action has broken through key support of $1,281.5 per ounce. Down over $25 per ounce, gold is looking to test $1,260. If demand does not pick up near these levels, gold has the momentum to reach $1,245. Silver is down .36 per ounce, as price action remains just above $19 per ounce. Silver has seen yearly demand near $18.94 and $19.01, while a close below this would signal a move down to $18.72.

The US durable goods data was more positive than expected but well below last month’s figure, and unrest in Ukraine continues to escalate. There is a clear risk-on mentality as the equity markets hit new highs on what seems to be a weekly basis.

Platinum: Platinum is following precious metals lower, even as strikes in South Africa have cost miners 471,720 ounces of production and $1.9 billion in revenue. The lengthy labor strikes have contributed to a 24 percent drop in platinum production.

Copper: Copper rises to an 11-week high on speculation that Chinese demand has picked up. Market participants believe the Chinese government will implement stimulus measures on the current weakened growth environment. Inventories tracked by the London Metal Exchange hit the lowest levels since 2008.

Crude: West Texas Intermediate (WTI) pulled back from $104 on inventories, which are speculated to be more than ample to meet summer demand. Brent slip lower, too, after a run-up during yesterday’s US holiday trading. The WTI-Brent spread narrowed to $6.13 per barrel.

Softs: Soybeans and corn prices decline on crop reports indicating that crops should be bountiful this season. Soybeans looked to hit a monthly low as seed planting rose from 33 percent planted to 57 percent planted. The forecasts of warm, wet weather will be beneficial for soybeans. Corn hit a three-month low, as 88 percent of crops were sown. Wheat futures continue to push lower before finding demand just above $639.90. Wheat has seen nearly a 12 percent correction since reaching the high of $744.