TOCOM Gold

Prices of TOCOM gold futures fell by almost 1% last week as a stronger yen, reports of weak physical demand, fears of deflation and market skittishness about European debt woes helped to send prices lower. The most actively traded forward contract fell by 40 yen for the week and closed Friday’s day trading session at 4011 yen per gram. Earlier in Friday’s trading session, the forward contract fell back below the 4,000 yen level and hit a weekly low of 3961 yen. Trading volume for TOCOM gold futures was very light for most of the week and open interest increased slightly and stood at 133,425 open contracts as of last Friday. Economic data released in the U.S. early last week showed that consumer confidence dropped and coupled with sovereign debt problems in Europe caused some analysts and traders to worry about the possibility of deflation. Even though the Indian rupee strengthened some last week against the U.S. dollar which lowered gold prices in the local currency, there were reports of continuing lackluster demand from Indian consumers. It was also reported in Japan that gold exports fell to a 15 month low in May as overseas demand has fell considerably. Some analysts put support for the U.S. dollar spot price at $1525 per ounce and this level held last week. Traders and investors will be watching to see if European countries can come to some kind of agreement on how to deal with high sovereign debt levels there as meetings should wrap-up sometime late Friday in Europe. The results of those meetings should determine the direction of commodity markets early next week in Tokyo.

TOCOM Gold Daily Chart – Forward Contract (as of June 29)

 

TOCOM Gold Forward Contract Weekly Trading Data

Date	Open	High	Low	Close	Change	Volume	Open Interest
June 29	4019	4024	3961	4011	-24	67383	133425
June 28	4031	4063	4009	4035	15	37884	132448
June 27	4023	4028	4016	4020	-45	39412	132399
June 26	4046	4075	4026	4065	7	26145	131756
June 25	4049	4088	4038	4058	7	28775	131413

 

TOCOM Platinum

TOCOM platinum futures prices fell for the second consecutive week as the most actively traded forward contract fell by 82 yen per gram or about 2.2%. The forward contract closed last Friday’s trading session at 3626 yen after hitting a low for the week of 3546 earlier Friday. Platinum prices fell for many of the same reasons that gold did last week as traders are worried that global economic activity is slowing and that this will crimp demand for platinum. Jewelry and automobile sales are showing signs of slowing down in many global markets and industrial output and consumer confidence also appear to be falling in China, Europe and the U.S. However, some analysts point out that platinum production is decreasing in South Africa due to higher production costs, labor issues and mine closings because of unprofitability due to low market prices for platinum and this  could help to lend support to platinum prices around current levels. Cash costs for mining companies to produce one ounce of platinum have continued to rise recently and with spot prices falling many mining companies have halted production of some mines and curtailed investments in new mining projects. Due to decreasing production, some analysts are now predicting that the platinum market could fall into a deficit this year with demand outstripping supply. Trading volume for TOCOM platinum futures was very weak early in the week before picking up later in the week due to lower prices and higher volatility. Open interest was little changed for the week and stood at 46,279 open contracts as of last Friday.

TOCOM Platinum Daily Chart – Forward Contract (as of June 29)

 

TOCOM Platinum Forward Contract Weekly Trading Data

Date	Open	High	Low	Close	Change	Volume	Open Interest
June   29	3622	3639	3546	3626	-9	21305	46279
June 28	3653	3671	3615	3635	-15	15357	44814
June 27	3681	3681	3650	3650	-56	12783	45097
June 26	3724	3734	3682	3706	-29	7286	44191
June 25	3717	3755	3711	3735	27	6838	44779

 

TOCOM Rubber

TOCOM rubber futures prices fared better than metals last week as prices rallied after hitting a two and a half year low in early trading on Monday. The benchmark forward contract hit a two and a half year low of 227.8 yen per kilo early Monday before recovering as traders covered short positions and the market saw some new long positions taken after the new low was hit on the perception by some that a bottom has been hit. Some analysts now see the 225 yen level as support. For the week, the forward contract gained 8.9 yen per kilo or about 3.8% and closed Friday’s day trading session at 240.5 yen. Despite last week’s gains, the end of the quarter still ended up being a dismal one for the TOCOM rubber market as prices fell by about 25%. High stock levels in Japan and China has dampened demand for rubber even though prices have dropped considerably over the last three months as sustained fresh buying has yet to appear according to reports from SE Asian physical markets. Economic data recently released in China and Europe continue to show shrinking industrial output and consumer demand and markets have fallen due to expectations of lower demand for commodities. Trading volume was moderate and open interest was little changed.

TOCOM Rubber Daily Chart – Forward Contract (as of June 29)

 

TOCOM Rubber Forward Contract Weekly Trading Data

Date	Open	High	Low	Close	Change	Volume	Open Interest
June 29	238.8	240.7	233.2	240.5	0.5	15552	21241
June 28	235.6	241.7	234.3	240.0	4.3	9389	21406
June 27	236.4	238.7	234.0	235.7	0.5	7436	21328
June 26	233.3	237.5	232.8	235.2	-1.9	8834	21117
June 25	230.8	240.2	227.8	237.1	5.5	10310	21560

 

Exchange and Industry News

 

Dot Commodity to Jointly Host FIA Derivatives Conference in Tokyo

Dot Commodity is pleased to announce that they will jointly host the FIA Derivatives Conference to be held in Tokyo on July 25^th-26^th. Click on the link for details on the conference.

http://www.commodity.co.jp/english/News/news_120627.html

 

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.