TOCOM Gold

TOCOM gold futures prices fell last week in unison with the U.S. dollar spot price of gold. The most actively traded forward gold contract on TOCOM fell by about 1.4% or 55 yen per gram and closed the week at 4014 yen per gram as of the close of last Friday’s day trading session. The forward contract reached as low as 3958 yen which was the lowest level since early January of this year. Global equity and commodity markets largely fell in the early part of last week on concerns that Greece could leave the euro zone and the condition of Spanish banks. China indicated that they would take action to try and spur lending to jump start their economy and this led some traders and analysts to speculate that growth was slowing at a greater pace than originally thought. However, as prices fell below the mid-$1500 level, there were reports that demand for physical gold picked up among jewelers and retail clients in Asia. Later in the week, the U.S. dollar spot price rose as some market participants speculated that some soft manufacturing data released in the U.S. might spur the U.S. Federal Reserve Bank to take action to stimulate the economy. On TOCOM, some buyers entered the market on Thursday due to some technical indicators showing that the market was oversold. However, gains on TOCOM were muted on Friday even though the U.S. dollar spot price rose due to a stronger yen versus the U.S. dollar. Trading volume on TOCOM was moderate except for Monday and open interest fell by around 2,500 contracts and stood at 145,955 as of last Friday.

TOCOM Gold Daily Chart – Forward Contract (as of May 18)

 

TOCOM Gold Forward Contract Weekly Trading Data

Date	Open	High	Low	Close	Change	Volume	Open Interest
May 18	4007	4047	3996	4014	1	56141	145955
May 17	3967	4020	3958	4013	49	61888	149348
May 16	4014	4032	3961	3964	-32	65425	143347
May 15	4060	4061	3986	3996	-69	58031	146470
May 14	4050	4097	4048	4065	-4	34207	147802

 

TOCOM Platinum

Prices of TOCOM platinum futures declined more than gold futures did last week as platinum is more exposed to economic cycles and so worries about debt and bank issues in Europe and slowing growth in China weighed more heavily on platinum. The most actively traded forward contract on TOCOM fell by around 2.5% last week. The forward contract fell by 97 yen and closed last Friday’s day trading session at 3720 yen per gram after falling as low as 3695 yen earlier in the trading session. A large amount of platinum demand comes from diesel engine production and these types of engines are popular in Europe. Whenever the market starts to fear that problems in Europe might worsen platinum prices usually tend to fall. It was reported that at the recent annual Platinum Week conference held in London, the consensus of participants was that the platinum market should have a surplus again in 2012 as falling mining production will be balanced out by lower demand from industry. However, rising mining costs due to labor issues, high energy costs and increasing regulations could cause producers to cut back on production if profits become elusive. According to some analysts, this could pose an upside risk to platinum prices. Trading volume for TOCOM platinum futures was moderate last week despite the fall in prices and open interest was little changed.

TOCOM Platinum Daily Chart – Forward Contract (as of May 18)

 

TOCOM Platinum Forward Contract Weekly Trading Data

Date	Open	High	Low	Close	Change	Volume	Open Interest
May   18	3752	3765	3695	3720	-43	11507	43647
May 17	3707	3769	3697	3763	64	10709	43241
May 16	3743	3765	3696	3699	-24	10776	43580
May 15	3778	3785	3702	3723	-61	12861	44111
May 14	3789	3825	3775	3784	-30	10083	43759

 

TOCOM Rubber

Prices of TOCOM rubber futures were hit hard again last week as the benchmark forward contract fell by about 4.9% or 13.9 yen per kilo. The forward contract closed the day trading session last Friday at 269.9 yen after hitting a four month low of 261.5 yen on Thursday before recovering somewhat later in Thursday’s trading session. The story for falling natural rubber prices was not much different from other markets as worries about Greek debt and Spanish banks in Europe, a slowing economy in China and falling global oil prices all contributed to falling rubber futures prices on TOCOM. Locally, it was reported that crude rubber stocks in Japan hit their highest level in 5 years which shows that demand in Japan is still tepid. Thailand did reiterate on Friday that they would intervene in rubber markets and said that they would buy up to 10,000 metric tons to try and prop up rubber prices. It was also reported that Thailand planned to buy on exchanges in both Tokyo and Shanghai. If Thailand follows through with this plan it could support prices on TOCOM, at least in the short term. Trading volume of TOCOM rubber futures was moderate last week in spite of the big dip in prices and open interest decreased slightly.

TOCOM Rubber Daily Chart – Forward Contract (as of May 18)

 

TOCOM Rubber Forward Contract Weekly Trading Data

Date	Open	High	Low	Close	Change	Volume	Open Interest
May 18	272.4	273.8	266.1	269.9	-3.6	9505	29831
May 17	264.2	274.7	261.5	273.5	8.7	8355	29138
May 16	273.0	275.0	264.8	264.8	-5.6	12056	28974
May 15	277.3	277.9	265.0	270.4	-9.1	12472	29764
May 14	282.9	288.3	276.1	279.5	-4.3	10194	30855

 

Exchange and Industry News

Change to TGE Raw Sugar Contract Specifications

The Tokyo Grain Exchange (TGE) has changed the contract specifications of the Raw Sugar contract starting from the November 2013 contract. Click on the link for more details.  http://www.tge.or.jp/english/whats/news/pdf/kikaku/RawSugar20120515.pdf

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