GOLD
Gold ended the week with a small increase at 1348.15 but moves into a strong buy position this week as traders look forward to Jackson Hole and Janet Yellen’s speech ahead of a possible rate increase in September. Gold fell on Friday for the first time this week as hawkish comments from U.S. Federal Reserve officials renewed bets on a U.S. rate hike this year, but was still on track to end the week with modest gains. "There is no clear direction from the Fed. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced. The yellow metal soared in value since the Britain voted to leave the EU as investors switched to traditional safe assets. Moreover, gold is sensitive to higher rates by the US Fed, which lifts the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
SILVER
Comex, Silver futures for September delivery tumbled 42.3 cents, or 2.14%, on Friday to settle at a seven-week low of $19.31 a troy ounce. On the week, silver declined 43.2 cents, or 2.19%, the third straight weekly loss. Minutes of the Federal Reserve's July policy meeting published earlier in the week showed committee members remained divided on the timing of the next rate hike, although there is general agreement that more data is needed before such a move. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases. For the year, the precious metal is up nearly 25%, boosted by concerns over global growth and expectations of monetary stimulus. Williams's speech was just the latest piece of hawkish rhetoric from top Fed officials. Earlier this week, New York and Atlanta Fed presidents William Dudley and Dennis Lockhart both said a September rate hike may be on the table.
COPPER
Copper remains neutral this week with no big data so prices will move in response to the US dollar. Copper is trading at 2.169 down 7% on an annual basis. Chinese data has remained worrisome as the government tries to reposition and reshape their economy. Copper is underperforming every other major base metal so far this year. The London Metal Exchange three-month price is trading around $4,840 per tonne, translating to a year-to-date gain of just under five percent. And there are plenty of analysts expecting even lower copper prices over the coming months. Peruvian production of mined copper jumped by a staggering 51.5 percent to 1.12 million tonnes in the first half of this year. National output was 741,000 tonnes in the year-earlier period, according to Peru's ministry of energy and mines. First-half production jumped to 260,000 tonnes from 98,700 tonnes in January-June 2015.
CRUDE OIL
Crude Oil soared this week closing at 48.45 with a gain of nearly 9% and although signals indicate that oil prices could climb this week supply and demand are indicating that the commodity is overpriced. Oil is up 30% on a year to date basis and 18% on an annual projection. All this is on the hope of production cuts at the late September meeting. Traders are reacting only to new headlines as data showed an increase in production by the Saudi’s. Iran and Iraq are not ready to cut production and are increasing output steadily. Saudi Arabia may finally be willing to work with producer nations to put a floor under oil prices after allowing market forces to determine the cost of a barrel of crude since November 2014, according to Jan Stuart, global energy economist at Credit Suisse. When the cost curve flattens, the gap between the current and future prices of crude futures is narrowing. CNBC reported that oil prices surged dramatically in the last two weeks thanks to OPEC freeze talk, but there's little expectation the cartel will act, especially now that crude is trading 24 percent higher just on hot air. The bullish argument is that some producers, like Iraq and Iran, are getting close to the limit of what they can produce. Libya is expected to bring some oil back on line, while Nigeria still has about 800,000 barrels offline. Venezuela could also see production decline. That leaves the U.S. shale producers as one wild card.
CAPITALSTARS
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