commodity update.

Precious Metals and Industrial Metals Rally

Precious Metals and Industrial Metals Rally

Gold headed for the longest weekly rally since March as U.S. economic data backed the case for sustained monetary stimulus. Russia and Kazakhstan added bullion to reserves for a ninth month in June. Gold is trading up close to $9 at $1337.65 this morning. Gold ended higher on Thursday, after being pulled down more than 1% in the previous session, supported by a weaker dollar as investors looked for clues in the day’s data; about when the Federal Reserve will start to taper its monetary stimulus. Gold traders expect higher premiums for the precious metal ahead of festivals, as the central bank’s steps to restrict imports are expected to cut supplies for domestic consumption. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 927.35 tons, as on July 25.

This morning, Asian equities are trading down led by weak Japanese equities backed by stronger yen. The euro is on a stronger note at 1.3282 and the dollar index is extending yesterday’s losses, which may support the rupee to open on a stronger note. As the day progresses, there are no economic releases from Europe. The US will release its Michigan confidence data, which is expected to improve and should limit the gains in the dollar. Germany’s IFO numbers has improved more than expectation while the euro-zone’s M3 money supply declined. This supported gains in the euro which rose 0.58% against the dollar and settled at 1.3282

The US’ initial jobless claim numbers increased more than expected while continuing claims increased at a slower pace. The durable goods orders improved more than expected for the month of June. However, the dollar index fell 0.39% against the majors and settled at 81.97 after the euro strengthened.

US factories received more orders for automobiles and machinery in June, pointing to a pickup in manufacturing that will help propel the world’s largest economy in the second half of 2013. Bookings for goods meant to last at least three years rose 4.2%, three times surveyed by Bloomberg. US Jobless claims rose by 7,000 to 343,000 in the week ended July 20 from a revised 336,000 the prior period. The Bloomberg projected 340,000. Japan consumer prices rose the most since 2008 in June, an early sign that the world’s third-biggest economy may be starting to shake off 15 years of deflation. Consumer prices excluding fresh food increased 0.4% in June from a year earlier.

Silver climbed to 20.24 gaining 86 pips this morning as the industrial metals and the precious metal groups all traded on a positive note except for copper which eased 15 pips after strong gains yesterday. Copper is trading at 3.175. On Thursday copper futures rebounded in US trade session, after a report showed orders for automobiles, machinery and other durable goods in US jumped more than market forecasts. Copper futures for Sept. delivery closed up by 0.2% at $3.1855 on the COMEX division of the NYMEX.