WTI Swings as Crude Stockpiles at Cushing Decline; Brent Steady

                     West Texas Intermediate swung between gains and losses after U.S. government data showed crude supplies at the delivery point for New Yorkcontracts shrank to the lowest level since 2008. Brent was steady in London.

Futures were little changed in New York after rising 0.7 percent yesterday. Crude stockpiles at Cushing, Oklahoma, the biggest U.S. oil-storage hub, dropped by 1.45 million barrels to 18.8 million, the least since November 2008, according to an Energy Information Administration report. A measure of manufacturing in China, the world’s second-largest oil consumer, climbed to an 18-month high in July.

“The long-run story has not changed, global supply still looks healthy,” Barnabas Gan, an economist at Oversea-Chinese Banking Corp. inSingapore, said by phone today. “The global growth tailwinds are expected to continue, and that does give oil investors a reason to see higher prices in the short term.”

WTI for September delivery was at $102.86 a barrel on the New York Mercantile Exchange, down 26 cents, at 3:22 p.m. Singapore time. The contract increased 73 cents to $103.12 yesterday. The volume of all futures traded was 20 percent above the 100-day average. Prices have advanced 4.5 percent this year.

Brent for September settlement was 22 cents lower at $107.81 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $4.96 to WTI, compared with $4.91 yesterday.

Fuel Supplies

U.S. crude inventories nationwide fell by almost 4 million barrels to 371.1 million in the week ended July 18, said the EIA, the Energy Department’s statistical arm. Supplies were down for a fourth week, the longest run of declines since January. They were forecast to decrease by 2.9 million, according to the median estimate in a Bloomberg News survey of nine analysts.

Gasoline stockpiles expanded by 3.38 million barrels, compared with a projected gain of 1 million. The peak U.S. driving season typically starts on Memorial Day, which came on May 26 this year, and runs through Labor Day on Sept. 1.

Distillate inventories, including heating oil and diesel, rose by 1.64 million barrels last week, the EIA report shows. An increase of 2 million was projected in the survey.

In China, a preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was at 52, topping the median prediction of 51 in a separate Bloomberg survey and June’s final level of 50.7. Readings above 50 signal expansion.

The Asian country will account for about 11 percent of global oil demand this year, compared with 21 percent for the U.S., according to theInternational Energy Agency in Paris. - Bloomberg

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Gold Drops Below $1,300 as Stocks Rally Curbs Demand

         Gold fell to the lowest level in a week as a rally in equities damped demand for an alternative investment amid concern that physical consumption is faltering.

Gold for immediate delivery lost as much as 0.7 percent to $1,294.98 an ounce, the lowest since July 16, before trading at $1,295.92 by 2:32 p.m. in Singapore, according to Bloomberg generic pricing. The metal has retreated for three days, and is on course for the first back-to-back weekly drop since May.

Bullion sank 28 percent last year on expectations the Federal Reserve will reduce stimulus. The Standard & Poor’s 500 index rose to a record yesterday as earnings of companies including Facebook Inc. topped estimates. Data yesterday showed gold consumption in China, which surpassed India as the largest user last year, fell 19 percent in the first half of 2014. The metal isn’t likely to get support from Indian demand as import restrictions remain unchanged, according to Commerzbank AG.

“The rally in U.S. equities continues to be a headwind for gold, despite safe-haven buying providing some support to prices,” Victor Thianpiriya, commodity strategist at Australia & New Zealand Banking Group Ltd., wrote in a note today.

Goldman Sachs Group Inc. reiterated a call for gold to drop to $1,050 by the end of 2014 as the U.S. economic recovery accelerates, analysts wrote in a report dated yesterday. The bank raised its long-term forecast 13 percent to the marginal cost support level of $1,200 in 2014-dollar terms.

Ukraine Jets

Gold has rebounded 7.8 percent this year in part as tensions in Ukraine and the Middle East fueled haven demand. The price failed to advance yesterday even as pro-Russian separatists shot down two Ukrainian fighter jets in the same eastern region where a Malaysian Air passenger jet was destroyed on July 17, the government said.

Gold for December delivery fell as much as 0.7 percent to $1,297 an ounce in New York, the lowest since July 16, before trading at $1,298. Holdings in the SPDR Gold Trust, the largest bullion-backed exchange-traded product, rose for a second day yesterday, data on its website showed.

Silver for immediate delivery declined 0.6 percent to $20.7998 an ounce. Spot platinum dropped as much as 0.7 percent to $1,471.89 an ounce, the lowest level since June 27, before trading at $1,472.29. Palladium decreased 0.3 percent to $869.21 an ounce.

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Gold Is Tumbling While Copper Is Climbing

                        Gold is trading below $1300 and headed down this morning. Gold gave up $6.70 in the Asian session to trade at 1298.00 after touching a low of $1295.78. Silver followed alone declining by 152 points to trade at 20.843 and platinum touched 1479.65 duplicating gold’s movements. Asian equity markets rose on following upbeat economic data from China and as the region’s earnings season got under way. On Wednesday gold was holding its ground above $1,300 as violence deepened in the Middle East over the Gaza strip and as holdings in the top bullion-backed fund rose on safe-haven bids. Tensions remained high between Russia and the West over Ukraine.  Kiev said two of its fighter jets were shot down over the rebel-held territory in eastern Ukraine on Wednesday, and the missiles that brought them down might have been fired from Russia.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.6 tonnes to 805.44 tonnes on Wednesday – a second straight day of increase. Gaza fighting raged on Wednesday, displacing thousands more Palestinians in the battered territory as U.S. Secretary of State John Kerry said efforts to secure a truce between Israel and Hamas had made some progress. Gold prices are expected to move in a range to down for the day over its fading safe haven appeal and poor physical demand.

China’s HSBC Flash Manufacturing Purchasing Managers’ Index (PMI) increased by 1.3 points to 52-mark in July from 50.7-level in the last month.

The US Dollar Index traded on a positive note and gained around 0.1 percent yesterday on the back of weak market sentiments in later part of the trade which lead to increase in demand for the low yielding currency. However, sharp upside in the currency was capped due to estimates of rise in interest rates in near future and investors will keep a close eye on US Federal Reserve meeting to be on held 29th-30th July 2014. The currency touched an intraday high of 80.92 and closed at same levels on Wednesday. The US dollar is trading at 80.90 in the Asian session.

Base metals on traded lower yesterday on speculation that the rally in the prices of Zinc, Lead and Aluminium were excessive in absence of enough fundamental demand. Also, investors were conscious ahead of manufacturing data from the US, Euro Zone and China due today. However, declining trend in LME inventories along with recovery in markets sentiments restricted sharp downside. Metals reversed their declines to gain after the release of Chinese PMI data, with copper climbing to trade at 3.231 up by 25 points and continuing to rise.  - fxempire

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Copper jumps 1% after China PMI hits 18-month high

                      Copper futures rallied to a more than one-week high on Thursday, as investors cheered better than expected manufacturing data out of China, the world’s largest consumer of the red metal.

On the Comex division of the New York Mercantile Exchange, copper for September delivery rose to a session high of $3.253 a pound, the most since July 16, before trimming gains to last trade at $3.248 during European morning hours, up 1.27%, or 4.1 cents.

Copper ended Wednesday’s session down 0.03%, or 0.1 cents, to settle at $3.207. Futures were likely to find support at $3.192, the low from July 23 and resistance at $3.255 a pound, the high from July 16.

Data released earlier showed that China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, rose to an 18-month high of 52.0 in July from a final reading of 50.7 in June. Analysts had expected the index to rise to 51.0 this month.

Copper traders consider shifts in the HSBC PMI an indicator of China's copper demand, as the industrial metal is widely used by the sector.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Elsewhere on the Comex, gold for August delivery shed 0.43%, or $5.60, to trade at $1,299.10 a troy ounce, while silver for September delivery dipped 0.41%, or 8.7 cents, to trade at $20.90 an ounce.

Later in the day, the U.S. was to produce data on unemployment claims, manufacturing activity and new home sales, amid ongoing speculation over when the Federal Reserve may start to raise interest rates. - investing.com

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