Saxo Bank optimistic about gold price

Saxo Bank optimistic about gold price

Baku, Azerbaijan, Feb. 26

By Maksim Tsurkov – Trend:

Commodities traded flat on the week with the Bloomberg Commodity Index showing gains in energy being offset by losses across both industrial and precious metals, Head of Commodity Strategy / Saxo Bank Ole Hansen told Trend Feb. 26.

Hansen said that the agriculture sector traded flat following a month of strong gains, particularly among key crops.

“The latest weekly report from the US Energy Information Administration delivered a triple dose of bullish news with WTI surging to resistance at $63.15/barrel,” he said. “This followed a surprise counter-seasonal drop in stocks driven by surging exports while production was flat following a recent jump.”

Hansen said that gold, meanwhile, endured its worst week since early December on the back of a stronger USD, a hawkish Federal Open Market Committee, and the US 10-year government bond yield approaching 3% – a level not been seen since it was rejected back in December 2013.

“The fifth consecutive failure (since 2014) in breaking higher has also helped raised short-term concerns about a deeper correction,” Hansen added.

“The motto of this year’s annual Munich Security Conference, held last week, was "To the Brink – and Back",” Hansen said. “All indications unfortunately pointed towards further conflicts as the conference laid bare the major lack of trust among world powers.”

“It highlighted multiple geopolitical risks ranging from US versus Russia, The West versus North Korea, Europe versus Turkey, and a messy Middle East where Russia and Iran are up against Israel and the US in Syria,” he said.

“Other threats being discussed and worried about were cyber threats and not least the rise in global trade tensions, especially between the US and China,” he said. “The US Commerce Department recently released its recommendations for restricting imports of steel and aluminium. The proposal, which now awaits a response and approval from President Trump, could potentially slap punitive tariffs on imports from five major suppliers including China and Russia.”

“From a global perspective the impact is likely to be limited with the biggest being the risk of tit-or-tat retaliation on US imports, not only from China but also from other countries singled out by the proposal,” he said. “The stock prices of US steel and aluminium producers are likely to receive a boost while US manufacturers making products from the two metals could suffer a competitive disadvantage given the impact of higher prices for domestically produced steel and aluminium.”

“Industrial metals in general traded lower as Chinese investors returned from their New Year holiday,” he said. “The weakness was driven by a recovering dollar, increased expectations for further FOMC rate hikes, and China's quest to deleverage in order to achieve a more sustainable growth trajectory.”

Hansen said that while investors await an expected post holiday pick-up in Chinese demand, the downside risk for now seems limited with HG Copper currently trading within a $3 to $3.3/lb range.

“Overall the agriculture sector led by grains seems to have woken up from a multi-year snooze with record high stock levels increasingly being challenged by an uncertain production outlook,” he said. “During the past month, a rising weather premium has emerged after extreme heat in the Southern Hemisphere and extreme cold across the Northern hemisphere impacted a variety of food commodities from soybeans to wheat and cocoa.”

“Additional support has come from the weaker dollar, strong demand, and rising energy prices as well as short covering from hedge funds who have been reducing a record grain short back to neutral during the past four weeks,” he said.

“The recent rally in key crops led by soybeans due to lower output from Argentina may now pause ahead of the crucially important month of March,” he said. “This is when the size of the Latin American harvest will become known while the US planting season begins, and with that news about what and how much US farmers intend to plant.”

“During the past week oil and gas operators as well as traders and ministers descended on London for the biggest annual gathering of oil executives at the IP Week,” Hansen said. “While the consensus was for higher prices due the successful and ongoing production cuts from Opec and friends, some uncertainty with regard to surging non-Opec production was also seen.”

Hansen said that this was highlighted by the International Energy Agency which is forecasting that global demand growth in 2018 and 2019 can be met by rising non-Opec production.

Subscribe to Trend in Google News! Subscribe
Major terrorist attack against rally with Erdogan's participation prevented in Turkey
Major terrorist attack against rally with Erdogan's participation prevented in Turkey
Great number of EU, NATO countries interested in Turkish drones - Cavushoglu
Great number of EU, NATO countries interested in Turkish drones - Cavushoglu
Erdogan discusses humanitarian aid with Red Crescent, Red Cross
Erdogan discusses humanitarian aid with Red Crescent, Red Cross
Loading Bars
State Customs Committee discloses TOP-5 trade partners of Azerbaijan
State Customs Committee reveals trade turnover between Azerbaijan and China
Azerbaijani Defense Ministry presents weekly review (VIDEO)
Georgia reports 3,410 coronavirus cases, 4,732 recoveries, 46 deaths
At least 14 civilians mistakenly killed by Indian forces in remote northeast
Iranian currency rates for December 5
Kyrgyzstan confirms 42 new COVID-19 cases
New Year budget to depend on activities’ scale - Tbilisi Mayor
Iran’s SPGC shares data on production of its fifth refinery
Baku International Sea Trade Port unveils cargo transshipment for 10M2021
Pakistan receives $3 billion loan from Saudi Arabia
VISA open to co-op with all key players in Azerbaijan’s transport sector (Exclusive)
6.1-magnitude earthquake rattles southern Philippines
Soyuz-ST-B with 2 Galileo satellites launched from Kourou spaceport
Dutch former queen Beatrix tests positive for COVID-19
10 mln French have received COVID-19 booster shots: minister
Iran abandoned any compromises in latest nuclear talks - U.S.
Chile reports first case of Omicron variant
White House confirms plans of holding video call between Biden and Putin on December 7
Vienna talks on Iran nuclear deal to resume next week - Russian Foreign Ministry
1 killed, 40 injured following volcanic eruption in Indonesia
Body of another Armenian serviceman found in Azerbaijan's Khojavand
Bitcoin tumbles 9.95% to $48,397.56
Passenger transportation via Iran's Kermanshah International Airport declines
UK records another 42,848 coronavirus cases
Explosion occurred near Iran's nuclear facility
Azerbaijan hands over to Armenia body of saboteur neutralized in attack on Azerbaijani serviceman in Khojavand
Azerbaijan talks entreprises to be commissioned at Aghdam Industrial Park
Major terrorist attack against rally with Erdogan's participation prevented in Turkey
Great number of EU, NATO countries interested in Turkish drones - Cavushoglu
Georgian PM meets with President of FIBA Europe
OSCE MG ready to host meeting between Azerbaijani and Armenian FMs
Value of Azerbaijan's export to US surges for 10M2021
Prices on several main food products in Kazakhstan continue to lower
Agrarian sector of ‘smart village’ in Azerbaijan’s Zangilan to be combined modern urban planning – minister
Azerbaijan discloses project cost of agropark in Yevlakh (PHOTO)
Buy/sell operations at Iran Mercantile Exchange down
Saudi Arabia, France agree to strengthen cooperation
Biden, Putin to hold video call on Tuesday
India, Australia are natural economic partners, says Tony Abbott
Azerbaijan receives mine maps of its territories liberated from Armenian occupation
Erdogan discusses humanitarian aid with Red Crescent, Red Cross
Uzbekistan intends to increase dried fruit exports to China
No Omicron strain detected in Georgia - NCDC Head
Aligarh’s Areeba shoots to fame, breaks stereotypes about Muslim girls
Iran’s Bahar Azadi gold coin price skyrockets
Azerbaijan shares data on number of vaccinated citizens
Azerbaijan confirms 1,406 more COVID-19 cases, 1,787 recoveries
Tactical exercises held in Azerbaijan's commando military unit - MoD (PHOTO/VIDEO)
New composition of Supervisory Board of Azerbaijan Industrial Corporation approved
Iran reveals COVID-19 data for December 4
President Ilham Aliyev sends congratulations to heads of Thailand, Finland
France, Europeans working to open joint mission in Afghanistan - Macron
Ranking of natural gas importers from Azerbaijan
Uzbek Commodity and Raw Materials Exchange reveals volume of its transactions
SOCAR Georgia Gas announces tender on gas stations restoration
Iran eyes increase in passenger transportation via Yazd Shahid Sadooghi Airport
Azerbaijan reveals oil exports to Canada in 10M2021
Weekly review of main events in Azerbaijan's transport sector
Turkmenistan’s president approves anti-crisis program for 2022
Azerbaijan’s liberated territories have high potential for solar energy - RES agency
Weekly review of key events in Azerbaijan's ICT sector
Russian company to help automate, digitalize processes in Uzbek energy sector
Iran reaches increase in load/unload operations in Shahid Bahonar port
Top 10 Azerbaijani oil importers
MFA reveals reason why Armenia-Azerbaijan ministerial meeting didn't take place
Kazakhstan talks construction of wind power plants in Kostanay region
Azerbaijan achieves practical results to restore hydropower plants in liberated lands - agency's CEO
Azerbaijan’s metallurgical company notes increases in steel production over 9M2021
Iran also to be able to take advantage of Zangazur corridor – ex-Iranian ambassador to Azerbaijan
Russia-UAE trade turnover hits fresh all-time high surpassing $4 bln - Mishustin
Kazakhstan’s Almaty Power Plants to buy pumping, ventilation equipment via tender
Azerbaijan discloses oil exports to Ukraine over 10M2021
Azerbaijan unveils volume of oil exports to Belarus in first 10M2021
Georgian Railway shares updated report on income within 9M2021
Azerbaijan’s 10M2021 oil exports to UK revealed
Kazakhstan to timely fulfill its obligations under COP26 – PM
Azerbaijan opens investment tender to privatize Sumgayit Construction Service company
Iran finds way to supply its far north, north-east provinces with gas
Georgia releases COVID-19 data for December 4
LUKOIL Uzbekistan Operating LLC opens tender for supply of shut-off and control valves
Mikheil Saakashvili not to be treated abroad – Georgia's minister
Russia offers Azerbaijan to switch to barcoding for fruit, vegetables exports
Tripartite gas swap deal with Turkmenistan, Azerbaijan, may help Iran kill two birds with one stone
Azerbaijan Mortgage and Credit Guarantee Fund issues record amount of loans in 10M2021
Goods movement across Azerbaijani-Russian border to be accelerated
Azerbaijani oil prices increase
Kazakhstan boosts trade with Romania over 9M2021
Weekly review of Azerbaijan's oil & gas sector
Weekly review of Azerbaijani precious metals market
Weekly review of Azerbaijani currency market
Treatment of servicemen injured in helicopter crash of Azerbaijan’s State Border Service continues
Turkey to support Azerbaijan in installing seismic stations in Karabakh
Iran aims to increase local solar power production
Gamaleya Center ready to accept state order for up to 10 mln sets of Sputnik M
Kazakhstan’s Intergas Central Asia to buy welding equipment via tender
Georgia’s export of oil products increases
India’s air defence gets a big boost, Russia starts delivery of S-400 missiles
India's defence procurement guided by national security interests: MEA
Uzbekistan shares domestic COVID-19 data for December 3
All news