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Commodity Morning View For 24 June 2014

Bullions: -

Gold steadied near a two-month high on Monday as escalating violence in Iraq and geopolitical tensions supported the metal's safe-haven appeal, though stronger equities and sluggish physical appetite looked likely to add pressure. U.S. economic data due for released Monday included the Chicago Fed’s national activity index and the U.S. flash manufacturing purchasing managers’ index. Neither report had much of an impact on the market place. Meantime, the European Union’s Markit manufacturing and services PMI came in at 52.8 in June versus 53.5 in May. France was the main weak spot in the report and the reading did not meet market expectations. Meanwhile, concerns about ongoing violence in Iraq lingered, as militants from the Islamic State of Iraq and the Levant seized control of more towns near the borders with Jordan and Syria. This situation remains serious for the markets and will likely continue to support gold. With the higher prices, physical demand from top consumers China and India has been slow to pick up, adding to the gloom brought on by stronger equities. August Comex gold was last up $1.80 at $1,318.40 an ounce. Spot gold was last quoted up $3.60 at $1,318.75. July Comex silver last traded down $0.049 at $20.90 an ounce.

Base Metals: -

Copper futures rallied to a three-week high on Monday, as investors cheered better than expected manufacturing data out of China. The China HSBC preliminary manufacturing purchasing managers index came in at 50.8 in June versus 49.4 in May. This is the first time the reading has been above 50.0 this year. A reading above 50.0 suggests expansion. Also, London Metal Exchange (LME) inventories fell 850 tonnes to 158,575 a tonne, their lowest in nearly six years, while cash copper held on to its premium over the three month price, also indicating supply tightness. Copper is being supported by robust demand from China, tight stocks and a market deficit that wasn't expected by most observers. Three-month LME copper climbed 0.81 percent to $6,875.25 a tonne by 0946 GMT, after hitting $6,890 a tonne, its highest since June 3. Copper ended Friday’s session up 1.22%, or 3.7 cents, to settle at $3.113.

Oil & Energy: -

U.S. crude futures fell under $106 per barrel as supply concerns eased after data showed near record exports from Iraq's southern regions, but U.S. inventories are projected to fall. Investors locked in gains stemming from the fears that the Iraqi insurgency will disrupt supply and sold for profits, as the violence still remains far away from the country's main oilfields in the south. Oil exports from Iraq's southern regions, which produce 90 percent of the country's oil, averaged a near record 2.53 million barrels per day (bpd), according to shipping data for the first 21 days of June tracked by Reuters. Exports are close to May's average of 2.58 million bpd - the highest since 2003. U.S. commercial crude stocks were expected to have fallen by 1.3 million barrels last week according to a Reuter’s analyst’s poll ahead of weekly inventory reports from industry group the API and the U.S. Department of Energy's EIA. Oil guards again shut Libya's easternmost Hariga oil port, choking oil exports, in a dispute over unpaid wages, a spokesman for operator Arabian Gulf Oil Co (AGOCO) said on Monday. Brent for August settlement dropped as much as 50 cents to $113.62 a barrel on the London-based ICE Futures Europe exchange and was at $113.82 at 11:46 a.m. Sydney time. WTI for August delivery fell as much as 92 cents to $105.25 a barrel in electronic trading on the New York Mercantile Exchange. The U.S. benchmark crude traded at a discount of $8.15 to Brent, from $7.95 yesterday.


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