Market Commentary
Crude Trades Near 3-Day High Amid Iran Nuclear Talks.
Brent crude futures traded near a three-day high after United Nations nuclear officials failed to reach a deal on inspections with Iran. The European benchmark advanced as much as 0.4 percent. UN inspectors didn’t secure an agreement that would allow investigators access to alleged atomic facilities and couldn’t settle on a date for another meeting, chief inspector Herman Nackaerts said today in Vienna. U.S. crude inventories rose less than forecast last week, the Energy Department said yesterday. “Prices will be buoyed by the back and forth in nuclear talks,” said Michael Poulsen, an analyst at Global Risk Management Ltd. in Middelfart, Denmark. Brent for April settlement climbed as much as 41 cents to $118.29 on the London-based ICE Futures Europe exchange and traded at $117.48 at 12:57 p.m. local time. The volume of all futures traded was 2 percent above the 100-day average. The March contract settled at $118.72 when it expired yesterday, the highest closing level for the front-month since Feb. 8. The front-month European benchmark grade was at a premium of $19.74 to West Texas Intermediate. The gap expanded to $23.18 on Feb. 8, the widest since Nov. 26. WTI for March delivery rose 12 cents to $97.13 a barrel in electronic trading on the New York Mercantile Exchange. The volume of all futures traded was in line with the 100-day average.
Gold Council Sees Central Bank Bullion Buying at 48-Year High.
Central banks added the most gold to reserves in almost a half century last year as prices averaged a record, the World Gold Council said. The banks bought 145 metric tons in the fourth quarter, an eighth successive quarter of net buying, the London-based industry group said today in a report. They added 534.6 tons to reserves last year, 17 percent more than in 2011 and the most since 1964, it estimates. Nations from Brazil to Russia are adding the metal to reserves at a time when investors are holding a near-record amount through gold-backed exchange-traded products. Bullion gained for a 12th straight year in 2012, the best run in at least nine decades, averaging $1,669 an ounce through the 12 months. “We think that the current rate of net central bank purchasing, driven by emerging countries, is likely to continue to be very strong,” Marcus Grubb, managing director of investment research at the council, said yesterday by phone from London. “This is very much due to a desire to diversify away from over-reliance from the dollar and the euro.”.
Copper Retreats as Slowing Industrial Production May Curb Demand.
Copper fell on speculation that slowing industrial production from Europe to the U.S. may curb demand and as inventories tracked by the London Metal Exchange reached the highest level since November 2011. Copper for three-month delivery fell as much as 0.2 percent to $8,280 a metric ton on the LME and traded at $8,286. The metal for delivery in March gained 0.2 percent to $3.765 a pound on the Comex in New York. Markets in China, the biggest consumer, are closed this week for the Lunar New Year holiday. Industrial production in France, Europe’s second-largest economy, probably declined 0.2 percent in December from the previous month, when it rose 0.5 percent, according to the median estimate of economists surveyed by Bloomberg before data today. Industrial production in the U.S. may have risen 0.2 percent in January from a 0.3 percent gain in a month earlier, data may show this week.
