“Gold swung between gains and losses in London, heading for a second quarterly decline, as holdings in exchange-traded products fell by the most on record and investors weighed the euro-area’s debt crisis against prospects for a U.S. recovery.

Holdings in ETPs contracted 6.9 percent this quarter amid speculation that the U.S. Federal Reserve will rein in stimulus. The Dollar Index (DXY), a gauge against six major counterparts, rose 4.3 percent this quarter, the biggest gain since the three months ended September 2011, amid signs the U.S. economy is improving. Banks in Cyprus planned to open for six hours today with capital restrictions in place after shutting for almost two weeks as the nation faced financial collapse.

“The gold market is strongly polarized,” said Filip Petersson, a commodities strategist at SEB AB in Stockholm. “There is one large group that thinks things are heading in the right direction and that it is time to get out of gold, and one that thinks it is just going to get worse and you need gold as an insurance. The substantial ETF outflows are very worrying, though, a major bear trigger.”

Bullion for immediate delivery fell less than 0.1 percent to $1,603.88 an ounce by 10:14 a.m. in London after gaining as much as 0.2 percent and falling 0.1 percent. Gold for June delivery fell 0.2 percent to $1,604.20 an ounce on the Comex in New York….”

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“West Texas Intermediate slipped from near a five-week high amid rising crude inventories in the U.S., the world’s biggest consumer of the commodity.

Futures fell as much as 0.8 percent. Crude stockpiles advanced 3.7 million barrels last week, the American Petroleum Institute said yesterday. An Energy Department report today may show a gain of 1.3 million, according to a Bloomberg News survey. The euro fell to its weakest level since Nov. 21 against the dollar, undermining the appeal of commodities priced in the U.S. currency. Bank of America Corp. said front-month WTI contracts may start trading at a premium, a price structure known as backwardation.

“The crude inventory builds reported last night are weighing on prices,” said Robert Montefusco, a senior broker at Sucden Financial Ltd. in London, who earlier this month correctly predicted oil prices would decline. “The euro is getting bashed as Europe’s situation looks dire, which is also pressuring oil.”

WTI for May delivery dropped as much as 73 cents to $95.61 a barrel in electronic trading on theNew York Mercantile Exchange, trading for $95.62 at 11:35 a.m. London time. The volume of all futures traded was 17 percent below the 100-day average. The contract climbed $1.53 to $96.34 yesterday, the biggest increase since Dec. 26 and highest close since Feb. 19.

Brent for May settlement gained 18 cents to $109.54 a barrel on the London-based ICE Futures Europe exchange. The benchmark grade was at a premium of $13.91 to WTI after closing yesterday at $13.02, the narrowest settlement since July.

Technical Resistance

The euro fell against the dollar, declining 0.5 percent to $1.2779 at 11:39 a.m. London time. It dropped as low as $1.2773, the lowest level since Nov. 21.

West Texas Intermediate crude prices may shift this year into a so-called backwardated pattern, in which immediate supplies are more expensive than later deliveries, according to Bank of America.

The discount on front-month WTI futures has narrowed with the activation of the Seaway pipeline, which sends crude from the U.S. storage hub in Cushing, Oklahoma, to refineries on the country’s Gulf Coast, the bank said. The discount on front-month WTI was at 27 cents a barrel today.

Depressed Consumers…”

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“West Texas Intermediate crude advanced to trade near its highest level in five weeks before reports forecast to show signs of economic recovery in the U.S.

Futures climbed as much as 0.8 percent. U.S. durable-goods orders probably increased in February by the most in five months, while sales of new homes posted the best back-to-back performance in four years, economists said before reports today. WTI slipped earlier on estimates that U.S. crude stockpiles increased by 1.4 million barrels to 384.1 million last week, the highest since June.

“The U.S. is showing signs of improving,” said Thina Saltvedt, an analyst at Nordea Bank AG in Oslo. “We will see the momentum in the world economy reach a bottom in the second quarter, and then increase, which should be positive for oil the oil demand outlook.”

WTI for May delivery climbed as much as 77 cents, or 0.8 percent, to $95.58 a barrel in electronic trading on the New York Mercantile Exchange, and traded for $95.45 at 11:32 a.m. in London. The volume of all futures traded was 12 percent below the 100-day average for the time of day. The contract rose as high as $95.65 yesterday, its strongest intraday level since Feb. 20.

Brent for May settlement rose 10 cents to $108.27 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was 46 percent above the 100-day average. Prices are down 2.5 percent in 2013. The European benchmark crude’s premium to WTI was at $12.87. It closed at $13.36 yesterday, the lowest closing level since July.

U.S. Supplies….”

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“West Texas Intermediate crude rose to the highest in a month as Cyprus agreed on an international bailout, allaying concern that Europe’s debt crisis will worsen. WTI narrowed its discount to Brent to the least since July.

Futures climbed as much as 1.1 percent in New York after capping a third weekly gain on March 22. Cyprus agreed on the outlines of an aid package with the European Union, European Central Bank and International Monetary Fund. Iraq will fail to achieve output targets for next year, the chairman of the country’s oil and energy committee said. Global markets are a “little” oversupplied, Kuwaiti Oil Minister Hani Hussain told reporters in the Gulf nation.

“The market has calmed down a bit around Cyprus,” said Thina Saltvedt, an analyst at Nordea Bank AG, who predicts Brent crude will average $110 a barrel in the next quarter. “We expect momentum to pick up in the world economy and support demand for oil.”

WTI for May delivery rose as much as 98 cents to $94.69 a barrel in electronic trading on theNew York Mercantile Exchange, the highest since Feb. 21, and was at $94.48 as of 12:18 p.m. London time. The volume of all futures traded was 27 percent below the 100-day average for the time of day. The contract advanced $1.26 to $93.71 a barrel on March 22, the highest close since March 18.

Cyprus Bailout…”

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“Gold declined below $1,600 an ounce in New York, following a three-week rally, as equities climbed after Cyprus agreed with euro-area finance ministers on a rescue package.

Gold advanced 1 percent last week as Cyprus struggled to secure a support from international creditors. The nation won a 10 billion-euro ($13 billion) bailout after agreeing late yesterday to shrink its banking system, instead of a previous demand to impose a levy on all bank accounts. Global equities reached a one-week high today.

“Firmness in equity markets has reduced its appeal as an alternative asset,” Mumbai-based Kotak Commodity Services Ltd. said today in a report, referring to gold. “The Cyprus issue did give a boost to the gold price. However, there is a lack of factors for a sharp and sustained rally.”

Gold futures for June delivery slipped 0.5 percent to $1,599.70 an ounce by 7:51 a.m. on the Comex in New York. Prices fell to as low as $1,599.10. Futures trading volume was 49 percent above the average in the past 100 days for this time of day. Gold for immediate delivery declined 0.6 percent to $1,599.50 in London…”

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“Copper declined in New York on speculation China’s government will take steps to slow inflation, curbing metals demand.

China’s swap market is signaling interest-rate increases for the first time since 2011 after inflation accelerated to a 10-month high and the housing market defied government cooling efforts. Hedge funds are making the biggest bet against copper on record, U.S. government figures showed last week.

“The new government seems determined to constrain excessive rallies in real-estate and tackle the potential threat of inflation,” Michael Lewis, an analyst at Deutsche Bank AG in London, said in a report dated today. There are “falling expectatations for Chinese economic activity.”

Copper futures for May delivery fell 0.1 percent to $3.4625 a pound at 8:09 a.m. on Comex in New York.

Stockpiles of copper in warehouses monitored by the LME expanded another 0.5 percent 565,350 tons, the highest since October 2003, LME data today showed. Inventories have jumped 77 percent this year….”

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“West Texas Intermediate crude rose to narrow its discount versus Brent to the lowest level in eight months. The European benchmark was headed for a second weekly decline.

WTI advanced as much as 0.6 percent, paring its first weekly decline in three, as the euro strengthened against the dollar amid speculation the banking crisis in Cyprus will be contained. Cypriot lawmakers start a debate today on ways to unlock bailout funds to avoid a financial collapse. Libya shut two oil fields because of fighting, according to a report yesterday from the state LANA news agency.

“We do not think that risk appetite has necessarily deteriorated,” said Harry Tchilinguirian, head of commodity- markets strategy at BNP Paribas SA in London, who forecasts that Brent will average $114 a barrel this quarter. “Once the Cyprus issue is resolved and ultimately it will have to be resolved,” crude is likely to strengthen, he said.

WTI for May delivery gained as much as 57 cents to $93.02 a barrel in electronic trading on theNew York Mercantile Exchange, and was at $92.99 at 11:13 a.m. London time. The volume of all futures traded was 49 percent below the 100-day average. The contract slid $1.05 to close at $92.45 yesterday. Prices are down 0.5 percent this week.

Brent for May settlement was at $107.63 a barrel, up 16 cents, on the London-based ICE Futures Europe exchange. The volume of all futures traded was 2 percent above the 100-day average for the time of day. The grade has lost 2 percent this year. The European benchmark’s premium to WTI fell as low as $14.57, the narrowest since July.

Brent Bottom…”

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“Copper rose in London from the lowest price since March after Morgan Stanley said demand is reviving in China, the world’s biggest consumer of the metal.

Chinese real metals demand is improving and supply-chain inventories of copper are low, the bank said in a report dated yesterday. China increased wind-farm approvals yesterday to try to reach a goal of installing the energy by 2015. Still, copper’s average price will slip 2 percent this year as inventories expand, an Australian government forecaster said.

“Major copper end-demand market indicators, like air- conditioner sales and state grid equipment orders, are all improving, while copper inventories at downstream producers remain low,” Rachel Zhang, an analyst at Morgan Stanley, wrote after a trip to China last week. “We believe restocking will be evident in the next couple of months.”

Copper for delivery in three months gained 1 percent to $7,603 a metric ton by 10:55 a.m. on the London Metal Exchange. Prices yesterday reached $7,486.25, the lowest since Aug. 21. Copper for delivery in May rose 1 percent to $3.44 a pound on the Comex in New York.

Metals slumped yesterday as concern about Europe’s debt crisis added to swelling copper inventories and curbs on the real-estate market in China. Prices rebounded today as investors speculated that the European Central Bank will continue to support lenders in Cyprus….”

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“Gold fell, ending a three-day advance in New York, as a strengthening dollar curbed demand for an alternative investment.

Gold jumped yesterday after Cypriot President Nicos Anastasiades bowed to demands to raise 5.8 billion euros ($7.5 billion) through a proposed tax on bank deposits. Defence Minister Fotis Fotiou said Cyprus’s parliament may not vote on a levy again today. The dollar was little changed versus the euro after yesterday reaching the highest since December. The Federal Reserve begins a two-day policy meeting today.

“The U.S. dollar is firming, which is a bit negative for precious metals,” Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said today by phone. “There’s still good reasons to hold gold.”

Gold futures for April delivery fell 0.1 percent to $1,602.50 an ounce by 7:47 a.m. on the Comex in New York. Prices fell as much as 0.3 percent today after reaching $1,610.40 yesterday, the highest since Feb. 27. Futures trading volume was 34 percent below the average in the past 100 days for this time of day. Gold for immediate delivery declined 0.1 percent at $1,603.69 in London.

The proposed bank-deposit levy, announced March 16, sparked concern among investors about setting a precedent by breaking the taboo against raiding bank accounts. Fotiou said the government was working on a “Plan B” if the vote isn’t passed in parliament. Banks and stock markets in Cyprus are closed today and tomorrow.

Gold’s Drop

Gold is down 4.4 percent this year amid signs the U.S. economy is improving and as Fed policy makers remain divided on the pace of stimulus that helped prices rally for a 12th straight year last year. Holdings in the SPDR Gold Trust, the biggest bullion ETP, fell to 1,219.5 metric tons yesterday, the lowest since July 2011, data on its website show….”

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“Brent crude fell, shrinking its premium to U.S. oil to less than $15 a barrel for the first time since January, as Cyprus prepared to vote on a bank levy amid renewed concern that Europe’s debt crisis will worsen.

Futures lost as much as 0.8 percent in a second daily decline, narrowing the premium to West Texas Intermediate to the least since Jan. 18. Cypriot lawmakers are scheduled to vote today on how to spread the burden of raising 5.8 billion euros ($7.5 billion) from bank depositors to unlock emergency loans. A report today may show U.S. crude supplies rose to the highest level since June.

“The number one story in the markets is still about an island in the Mediterranean with approximately 1 million inhabitants,” said Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark, adding that oil prices will probably remain “fairly balanced.”

Brent for May settlement slid as much as 88 cents to $108.63 a barrel on the London-based ICE Futures Europe exchange, trading for $109.15 at 12:04 p.m. local time. Volumes were 17 percent below the 100-day average. The European benchmark was at a premium of $14.75 to WTI for the same month.

WTI for April delivery, which expires tomorrow, was at $94.02 a barrel, up 28 cents, in electronic trading on the New York Mercantile Exchange. The more-active May future gained 30 cents to $94.41. The volume of all futures traded was 7 percent above the 100-day average. The front-month contract climbed 29 cents to $93.74 yesterday, the highest close since Feb. 20.

Price Rebound…”

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” ‘A cesspit’: Libor scandal may be going on elsewhere

The market for determining one of the world’s key interest rates was a “cesspit” and banks cannot be trusted to be honest in several other major markets, the deputy governor of the Bank of England has warned.

“West Texas Intermediate crude fell from the highest price in three weeks as an unprecedented levy on bank savings in Cyprus threatened to worsen Europe’s debt crisis. Libya shut an oil pipeline after protests.

Futures slipped as much as 1.4 percent in New York, dropping for the first time in three days. Cyprus bowed to demands by euro-area finance ministers to raise 5.8 billion euros ($7.6 billion) by taking a piece of every bank account, sending the euro tumbling and sparking public outrage. The closing of the Waha Oil Co. pipe after a strike by truck drivers cut Libyan crude output by 120,000 barrels a day, according to Oil Minister Abdulbari al-Arusi.

“Confidence is rattled,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen said by phone. “We have to figure out where this Cyprus debacle leaves us. Until we know for sure what’s happening, it’ll probably keep the market on the defensive for a few days.”

WTI for April delivery declined as much as $1.31 to $92.14 a barrel in electronic trading on the New York Mercantile Exchange and was at $92.25 at 10:40 a.m. London time. The contract climbed 42 cents to $93.45 on March 15, the highest settlement since Feb. 20. The volume of all futures traded was 75 percent more than the 100-day average.

Euro Weakness

Brent for May settlement dropped $1.76 to $108.06 a barrel on the London-based ICE Futures Europe exchange. The number of futures traded was 5 percent below the 100-day average. The European benchmark grade was at a premium of $15.43 to WTI for the same month. That’s down from $16 on March 15 and is the lowest since Jan. 17.

The euro fell as low as $1.2882, the weakest since December. A declining euro and stronger dollar typically decrease the appeal of investing in dollar-priced commodities such as oil…..”

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“Gold rose above $1,600 an ounce in London for the first time this month after an unprecedented levy on bank deposits in Cyprus increased demand for a protection of wealth.

Cypriot President Nicos Anastasiades bowed to demands by euro-area finance ministers to raise 5.8 billion euros ($7.5 billion) by taking a piece of every bank account in Cyprus. The country became in June the fifth euro-area nation to request a rescue. The euro fell to the lowest since December versus the dollar and global equities declined.

“Gold looks poised to benefit from its safe-haven properties amid renewed risks coming out of the euro zone,” Joni Teves, an analyst at UBS AG in London, wrote today in a report. “As people start to worry about the safety of their deposits, gold would become an attractive alternative and an escalation of these worries would prompt a return of fear- related physical buying.”

Gold for immediate delivery rose 0.7 percent to $1,603.68 an ounce by 9:49 a.m. in London. Prices reached $1,608.60, the highest since Feb. 27, and added 0.8 percent last week. Futures for April delivery were up 0.6 percent at $1,602.40 on the Comex in New York. Futures trading volume was 56 percent above the average in the past 100 days for this time of day….”

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“The incentive for investors to buy and hold Brent crude has dwindled to its weakest level in eight months as supplies from the North Sea recover.

The premium for immediate supplies of Brent crude versus later deliveries shrank to 28 cents a barrel on March 13, the least since July, as production headed for the highest in 10 months. The narrowing spread is dimming the attraction of buying front-month futures and then transferring, or rolling, the position into the next contract at each monthly expiry. Brent traded as high as $109.55 a barrel in London today.

“The Brent structure has been weakening,” Olivier Jakob, managing director at consultant Petromatrix GmbH in Zug,Switzerland, said by phone on March 13. “And if Brent cannot sustain a high enough roll return, then investors will be more hesitant to hold it at these kinds of price levels.”

Futures have dropped 8 percent from this year’s peak of $119.17 as Europe’s debt crisis and the resumption of North Sea output prompted money managers to cut bullish bets by the most in 18 months. Returns are falling just as the price difference between Brent and West Texas Intermediate, the U.S. benchmark oil, shrinks to its narrowest since Jan. 18.

Roll Yield

Excluding gains or losses from changes in the price of the underlying security, an investor could have made almost $12,000 by buying and rolling a 1,000-barrel lot of Brent, according to data compiled by Bloomberg. The same strategy returned $17,000 per contract in 2011.18

Buying WTI, for which immediate supplies are cheaper than later deliveries, and rolling it through 2012 would have lost $3,150 per contract….”

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“Gold traded below its highest level this month and headed for a second weekly gain in New Yorkas investors weighed a pickup in physical demand against signs economies are improving.

The metal is heading for the first back-to-back weekly advance since January even as U.S. data showed this week retail sales jumped and jobless claims dropped. Global equities reached the highest since June 2008. Japan’s political parties confirmed Haruhiko Kuroda as the Bank of Japan (8301) governor as well as Kikuo Iwata and Hiroshi Nakaso as deputies, ushering in a leadership that may push for more monetary stimulus within weeks.

“Numbers out of the U.S. have been coming out better and that’s helping equities go higher,”Afshin Nabavi, a senior vice president at bullion refiner MKS (Switzerland) SA in Geneva, said today by phone. “Physical demand still remains strong, from the Far East mainly. There seems to be bargain hunting every time around the $1,570 an ounce area.”

Gold futures for April delivery added 0.1 percent to $1,591.70 an ounce by 7:48 a.m. on the Comex in New York. Prices climbed to this month’s high of $1,598.80 an ounce on March 13 and are up 0.9 percent this week. Gold for immediate delivery increased 0.2 percent at $1,593 in London….”

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“Kenya’s Great Rift Valley, a 450- mile long volcanic trench ripped open by shifting tectonic plates, is known as the cradle of mankind for the million-year- old remains of human forebears discovered there.

Oil drillers say the area also holds a string of fields that could make East Africa’s largest economy a major energy producer. The U.K.’s Tullow Oil Plc (TLW) and Canada’s Africa Oil Corp (AOI). found crude at two wells last year and now plan as many as 11 more test wells in 2013. The valley could yield 10 billion barrels, Tullow estimates, enough to supply Kenya for three centuries or the U.S. for about 18 months…”

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“In the wake of yesterday’s OPEC oil market report, we have the latest monthly report from the International Energy Agency (IEA) today. While the two differ somewhat in specifics, the general story is the same. Global demand for crude will not grow as quickly as either OPEC or the IEA had originally forecast, and prices will be lower.

The IEA today lowered its forecast global demand growth to 820,000 barrels a day, or a total of 90.6 million barrels a day. Yesterday OPEC forecast demand growth of 800,000 barrels a day for a total of 89.7 million barrels a day.

According to the IEA, OPEC production rose by 150,000 barrels a day in February to 30.49 million barrels a day, due mainly to an increase in Iraqi production. Demand for OPEC crude fell by 100,000 barrels a day, due largely to refinery maintenance in the United States and Europe.

Non-OPEC production fell by 60,000 barrels a day in February to 54.1 million barrels a day, which is still 600,000 barrels a day higher than average 2012 production. The IEA forecasts non-OPEC supply to grow by 1.1 million barrels a day in 2013 to a total of 54.5 million barrels a day.

Whether demand will catch up with supply in 2013 is the big question. Given the weakness in the global economy, betting that crude demand will grow and prices will rise is no better than an even-money proposition….”

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You can thank the clam for allowing cheap money to flow and speculate in the commodities space. Perhaps when the fed is easy we should reinstate the rule that no speculation can take place in the breadstuff of the country unless it is a direct hedge for those in the business.

WTI is up $0.26 @ $92.80

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“Gold swung between gains and losses below the highest level this month in London as investors weighed improving economic data against speculation for more stimulus.

Gold rose yesterday after European Central Bank council member and head of Germany’s Bundesbank Jens Weidmann said the ECB will maintain its accommodative monetary-policy stance “for as long as necessary.” Global equities are 0.5 percent below yesterday’s highest level since 2008 before a report today that may show U.S. retail sales gained last month. Investors have cut gold exchange-traded product holdings to a six-month low.

Gold “edged up amid dip-buying and expectations of additional central bank measures,” Mumbai-based Kotak Commodity Services Ltd. said today in a report. “However, firmness in equity markets and ETP redemptions will continue to weigh on the gold price.”

Gold for immediate delivery was little changed at $1,592.55 an ounce by 9:46 a.m. in London. Prices rose as much as 0.1 percent and fell as much as 0.2 percent after reaching $1,598.80 yesterday, the highest since Feb. 28. Futures for April delivery were little changed at $1,591.20 on the Comex in New York. They gained the past four days, the best run since August.

Futures trading volume was 37 percent below the average in the past 100 days for this time of day.

Bullion is down 4.9 percent this year on optimism global economies are strengthening. Holdings in gold ETPs fell the past four weeks and slipped 7 metric tons yesterday to 2,472.9 tons, the lowest since September, data compiled by Bloomberg show. They’re down 159.6 tons from the December record.

Exchange Reserves…”

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“OPEC’s biggest oil producers are in talks to supply extra crude to India as the nation prepares to halt purchases from Iran because of global sanctions, four people with knowledge of the matter said.

Indian refiners, which are waiting for an order from the oil ministry on whether to stop buying Iranian cargoes, are discussing annual term contracts with Saudi Arabia, Iraq and Kuwait for the year starting April 1, the people said this week, asking not to be identified because the information is confidential. While the volume hasn’t been set, the Indian companies have been told there is enough supply to cover the loss of Iranian crude, the people said.

The assurances reduce the risk of disruptions to oil supplies forAsia’s third-largest economy as it seeks to cut fuel subsidies and narrow its budget deficit. They are also evidence of how global penalties against Iran because of its nuclear program are squeezing the nation’s revenues. At current prices, Iran stands to lose about $11.5 billion in sales annually if India stops buying its oil.

“This shows how pressure on Iran is increasing, and why Iran’s tone is much more conciliatory in recent times,” said Ehsan Ul-Haq, a senior market consultant at KBC Energy Economics in Walton-on-Thames, England. “Iran might be willing to accept a few more conditions now because otherwise it will find it difficult to meet its budget obligations.”

Good Faith…”

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