TOCOM Gold

Prices of TOCOM gold futures surged last week as the most actively traded forward contract gained 145 yen or about 3.5% per gram. The forward contract closed Friday’s day trading session at 4260 yen after reaching as high as 4321 earlier in the day. Prices rose inTokyobecause of a weakening yen versus the U.S. dollar early in the week and then a rise in the price of the U.S. dollar spot price later in the week. The U.S. dollar spot price rose after the U.S. Federal Reserve Bank announced that they would keep interest rates at current historically low rates at least until 2014. This weakened the U.S. dollar against many major currencies and pushed the price of spot gold to a one month high. With interest rates at such low levels, negative real interest rates will continue which in turn keeps the opportunity costs of holding gold low. Many analysts also now expect the Fed to implement more quantitative easing this year and this added to the bullishness on gold. Additionally, Chinese New Year is finishing up and demand in physical markets inAsiais expected to pick-up. Some central banks are also expected to continue their purchases of gold this year. All of this together has given a level of bullish sentiment in precious metal markets. Trading volume of gold futures on TOCOM was low early in the week and picking up some later in the week. Open interest fell by around 3,000 contracts and stood at 117,760 as of last Friday.

TOCOM Gold Daily Chart – Forward Contract (as of Jan 27)

 

TOCOM Gold Forward Contract Weekly Trading Data

Date	Open	High	Low	Close	Change	Volume	Open Interest
Jan 27	4274	4321	4250	4260	-12	60908	117760
Jan 26	4190	4295	4155	4272	82	67146	120910
Jan 25	4160	4190	4144	4190	32	38076	123426
Jan 24	4140	4167	4128	4158	13	35902	121957
Jan 23	4120	4152	4086	4145	30	38056	121787

 

TOCOM Platinum

Prices of platinum futures also rose last week on the back of higher gold prices and labor problems affecting production inSouth Africa. The most actively traded forward contract rose by 219 yen or about 5.8% per gram last week and closed the week at 4008 yen. Platinum futures prices on TOCOM have strongly rallied over the past few weeks after dropping below 3,500 yen in late December. Workers at the world’s second largest platinum producer, Impala Platinum, went on strike earlier this month at one of their mines and this has hurt curtailed production. Global platinum supply and demand is still expected to be in surplus in both 2012 and 2013 by most analysts but ongoing labor problems and increasing production cost inflation could change expectations going forward. Market participants are also still watching developments inEuropeclosely as platinum is used in diesel engine exhaust systems which are popular there. Palladium is used more often in gasoline engine exhaust systems. Trading volume was moderate last week and open interest fell slightly to stand at 40,117 contracts as of last Friday.

TOCOM Platinum Daily Chart – Forward Contract (Jan 27)

TOCOM Platinum Forward Contract Weekly Trading Data

Date	Open	High	Low	Close	Change	Volume	Open Interest
Jan   27	3964	4055	3958	4008	39	15039	40117
Jan 26	3903	3987	3882	3969	61	15625	40904
Jan 25	3880	3910	3858	3908	30	12328	41554
Jan 24	3802	3898	3792	3878	71	14873	41546
Jan 23	3792	3826	3746	3807	18	10843	42356

 

TOCOM Rubber

Rubber futures prices on TOCOM also gained last week albeit less than gold and platinum. The most actively traded benchmark forward contract gained 1.3 yen per kilogram last week after closing the day trading session last Friday at 315.8 yen which was also the low for the day. The forward contract hit a high for the week of 324.6 yen during Thursday’s trading which was a 3 month high. However, prices fell 7.7 yen during Friday’s trading as some traders closed profitable long positions before the weekend ahead of economic data was due to be released in the U.S. and a stronger yen against the U.S. dollar. Prices of natural rubber rose on TOCOM and in other Asian markets last Tuesday and Wednesday after the Thai government announced that they approved plans to buy up to 200,000 metric tons from Thai producers at above market prices to support local farmers and producers. However, the market is still expected to be in surplus in 2012 after having a deficit last year which led to historic highs last year. Trading volume was moderately low and open interest dropped slightly by about 1,500 contracts and stood at 26,850 as of last Friday.

TOCOM Rubber Daily Chart – Forward Contract (Jan 27)

TOCOM Rubber Forward Contract Weekly Trading Data

Date	Open	High	Low	Close	Change	Volume	Open Interest
Jan 27	324.0	324.0	315.8	315.8	-7.7	9261	26850
Jan 26	324.0	324.6	319.6	323.5	2.9	9115	27218
Jan 25	313.9	321.1	313.9	320.6	6.0	7012	27582
Jan 24	306.0	315.3	305.1	314.6	9.1	6130	27227
Jan 23	315.0	315.0	304.5	305.5	-9.0	8008	27630

 

Exchange and Industry News

 No news this week.

Disclaimer:

This market review and news report contains information and data from sources believed to be reliable and accurate as of the date of publication but has not been independently verified. This report is for informational purposes only and no employee, director or connected person to Dot Commodity, Inc. takes any responsibility for the information or correctness of the content contained in the report. Dot Commodity, Inc. is strictly an online commodity futures broker and does not give any trading recommendations or financial advice to any of its clients, perspective clients or readers of this report. No part of this market review & news report is to be construed as an offer or solicitation to buy or sell any commodity futures or financial contract or product of any kind.