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Archive for February 20th, 2010

Gold, Nonferrous Metal, Nonferrous Metals Prices

February 20, 2010

IMF Announced to Block the Gold Bullion

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It was reported that the International Monetary Fund sold 200 metric tons of gold to India last year for about $6.7 billion. All told, the IMF has sold some 212 metric tons of gold to central banks since September 2009 out of a total authorized 403.3 metric tons. That is about one-eighth of the IMF’s total gold holdings.

The IMF has announced that it would sell the remaining 191.3 metric tons on the open market. The sales will be phased to avoid disrupting the gold market. The announcement caused a sharp dip in spot gold prices this morning, to under $1,100 per ounce on the London market. Prices have recovered since then to about $1,119 per ounce.

The IMF is selling the gold to accomplish two goals. First, the IMF is using the proceeds of the sales to establish an endowment that it will use to produce income to cover its administrative expenses. Second, to generate more resources to fund a $17 billion loan fund for low-income countries, primarily Africa, that have suffered the most from the global financial crisis.

The World Gold Council has reported that demand for gold fell by 11% worldwide in 2009, while prices were up 12%. In the fourth quarter of 2009, gold averaged $1,099.63 per ounce, up 38% from the same period a year ago.

The growth in gold demand came mainly from ETFs like SPDR Gold Shares (GLD), iShares Comex Gold Trust (IAU) and PowerShares DB Gold (DGL). ETF demand for gold in 2009 topped 594 metric tons, up 85% from 2008. Almost half that growth came in the first quarter, when everyone thought the world was going to hell in a handbasket and piled into gold. By the fourth quarter, demand from the ETFs had fallen to just 31.6 metric tons.

Going forward, if the economic recovery falters, gold will once again play its role as a safe haven. If the recovery strengthens, gold will assume its role as an inflation hedge. Either way, the demand for gold is likely to increase.

The IMF’s gold sales are not likely to have much impact, either long-term or short-term on the spot price of gold. The dollar value is just too small. Sure, 191 metric tons sounds like a lot, but it’s probably only around $6 billion worth of gold. That just isn’t enough to swing the gold market much one way or another.

Lead, Nonferrous Metal, Nonferrous Metals Prices

LME Official Lead Prices (US$/tonne) for 19 Feb 2010

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Lead (US/ton)
CASH BUYER 2238.00
3-MONTHS BUYER 2266.00
15-MONTHS BUYER 2268.00
15-MONTHS SELLER 2273.00
27-MONTHS BUYER 2223.00
27-MONTHS SELLER 2228.00

Nonferrous Metal, Nonferrous Metals Prices, Zinc

LME Official Zinc Prices (US$/tonne) for 19 Feb 2010

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Zinc (US/ton)
CASH BUYER 2250.00
3-MONTHS BUYER 2276.50
15-MONTHS BUYER 2308.00
15-MONTHS SELLER 2313.00
27-MONTHS BUYER 2293.00
27-MONTHS SELLER 2298.00

Nickel, Nonferrous Metal, Nonferrous Metals Prices

LME Official Nickel Prices (US$/tonne) for 19 Feb 2010

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Nickel (US/ton)
CASH BUYER 20230.00
3-MONTHS BUYER 20300.00
3-MONTHS SELLER 20325.00
15-MONTHS BUYER 20225.00
15-MONTHS SELLER 20325.00
27-MONTHS BUYER 19850.00
27-MONTHS SELLER 19950.00

Nonferrous Metal, Nonferrous Metals Prices, Tin

LME Official Tin Prices (US$/tonne) for 19 Feb 2010

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Tin (US/ton)
CASH BUYER 16645.00
3-MONTHS BUYER 16675.00
3-MONTHS SELLER 16680.00
15-MONTHS BUYER 16695.00
15-MONTHS SELLER 16745.00

Alloy, Aluminum News, Nonferrous Metal, Nonferrous Metals Prices

LME Official Aluminium Alloy Prices (US$/tonne) for 19 Feb 2010

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Aluminium Alloy (US/ton)
CASH BUYER 1895.50
3-MONTHS BUYER 1920.00
15-MONTHS BUYER 2020.00
15-MONTHS SELLER 2030.00
27-MONTHS BUYER 2110.00
27-MONTHS SELLER 2120.00

Aluminum News, Nonferrous Metal, Nonferrous Metals Prices

LME Official Aluminium Prices (US$/tonne) for 19 Feb 2010

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Aluminium (US/ton)
CASH BUYER 2076.00
3-MONTHS BUYER 2107.00
15-MONTHS BUYER 2198.00
15-MONTHS SELLER 2203.00
27-MONTHS BUYER 2275.00
27-MONTHS SELLER 2280.00

Copper, Gold, Nonferrous Metal, Nonferrous Metals Prices

Gold Steady While Copper Gains Marginally

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It was reported that Spot Gold prices traded sideways till 4.30 pm IST 17 Feb after breaching the highest prices in almost two weeks. Gold prices gained yesterday on the back of improved risk sentiments in the financial markets. Investors were seen flocking towards riskier investments which weakened the low-yielding dollar and pushing up the prices of gold.

Positive economic data releases from Germany and US yesterday led to improved confidence on global economic recovery which led to boost in risk sentiments of investors. However, the European Union has not yet declared on how it would aid Greece and other ailing nations in the Eurozone to overcome its deficit problems. Risk aversion may emerge back if they fail to devise a proper plan which may strengthen back the dollar. Gains in gold prices may be capped if the dollar rebounds back. A stronger dollar usually exerts pressure on gold.

Copper prices gained marginally today after closing above $7000 mark yesterday. The red metal has been gaining amidst improved confidence amongst investors. Inventories of copper on LME remain unchanged today at 5,49,900 tonnes after increasing in the earlier sessions reflecting improved demand.

However, prices may be capped on the upside as Chinese markets remain closed till this weekend and hence would lower demand from the world’s largest consumer of metals. Moreover, the European Union has not yet declared on its ways to help Greece which can hurt investor’s risk appetite.

Crude Oil prices remained a little changed above $77 today after gaining yesterday amidst the weakening dollar coupled with positive economic data releases from US, Japan and Germany. The dollar weakened against the Euro on speculation that Greece won’t need a bailout to overcome its deficit problems.

US Secretary of State Hillary Clinton said yesterday that the US is seeking support from countries to back sanctions against Iran which would help prices to gain. However, the US Energy Department will release data on crude inventories tomorrow. Inventories have been on an increase till last week.

Copper, Nonferrous Metal, Nonferrous Metals Prices

LME Copper Price Rises up

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It was reported that world spot copper traded at $3.15/lb this week, the highest price this month, as a declining dollar has fueled demand for metals as alternative assets. Copper futures for May delivery averaged $3.24/lb on Tuesday on both the London Metal Exchange (LME) and the New York Mercantile Exchange’s Comex unit.

The spot global copper price has fallen from $3.35 in January to $3.02 so far this month on speculation that budget gaps in Portugal, Italy, Greece and Spain could derail the global economic recovery. However, Bloomberg now quotes Michael Widmer, a strategist at Bank of America/Merrill Lynch Research in London, as saying that copper and other nonferrous metals futures have climbed in price as traders and investors are “less pessimistic” about Greece’s budget deficit especially and have returned to higher-risk assets.

“Declines in metals this year are not really driven by metals fundamentals, but a broader macroeconomic environment,” Widmer tells Bloomberg in an interview. Copper in LME warehouses is around 549,900 metric tons this week but Widmer says there has been a steady rise in bookings this month to remove 16,000 metric tons of the metal from warehouses registered with the LME-which signals growing demand from manufacturers.

Catherine Virga, senior base metals analyst with CPM Group in New York, tells Reuters that “we are seeing an uptick in physical demand across the base metals complex due to the lower prices.”

Then there’s China, the world’s largest copper consumer. Copper demand is expected to grow by more than 11% in the first quarter.  “The demand picture out of China is still robust,” analyst Dan Smith at Standard Chartered Bank in London writes to clients. “Once China comes back from the New Year holidays things will pick up and this price rebound is an anticipation of that.” Chinese markets are due to reopen next week after this week’s New Year break.

Copper, Nonferrous Metal, Nonferrous Metals Prices

LME Official Copper Prices (US$/tonne) for 19 Feb 2010

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CASH BUYER 7085.50
3-MONTHS BUYER 7110.00
15-MONTHS BUYER 7110.00
15-MONTHS SELLER 7120.00
27-MONTHS BUYER 7030.00
27-MONTHS SELLER 7040.00
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