Wednesday, April 10, 2013

Market Update with Mike Kuta " The Squawk Trader "

Published on 04-10-2013
April 10, 2013
Gold Futures Fall as Fed Debates Stimulus Plans; Palladium Drops.
Gold futures fell most in a week after minutes from a Federal Reserve meeting spurred speculation that stimulus will be curbed, easing the threat of inflation. Palladium retreated to the lowest since January. Several members of the Federal Open Market Committee said the central bank should begin tapering its bond-buying program later this year and stop it by year end, according to the record of a March 19-20 meeting released today in Washington. Goldman Sachs Group Inc. cut its gold forecasts through 2014 and said the turn in the price cycle is accelerating as the U.S. economy strengthens. “The end of quantitative easing is destructive for gold as it’s taking inflation off the table,” Sterling Smith, a Chicago-based commodity futures specialist at Citigroup Global Markets Inc., said in a telephone interview. “The sentiment is very bearish.” Gold futures for June delivery fell 0.8 percent to $1,574.60 an ounce at 10:06 a.m. on the Comex in New York, heading for the biggest loss since April 3.
Through yesterday, prices were down 5.3 percent this year after 12 straight annual gains. Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, fell to 1,200.4 metric tons yesterday, the least since June 2011, data on its website show. Goldman cut its three-month target to $1,530 from $1,615 and lowered its 12-month forecast to $1,390 from $1,550, it said today in a report. The Fed is buying $85 billion of debt a month and has said further improvement in the U.S. labor market is needed for the central bank to consider reducing its record monetary easing. Gold priced in yen reached the highest since March 1980 today. Silver, Palladium.  Silver futures for May delivery fell 1 percent to $27.60 an ounce in New York, after jumping 2.7 percent yesterday, the most since Jan. 30. On the New York Mercantile Exchange, palladium futures for June delivery tumbled 2.5 percent to $714.55 an ounce, after reaching $704, the lowest since Jan. 15. Trading was 60 percent higher than the 100-day average for this time of day, according to data compiled by Bloomberg.
Gasoline Declines on Supply Increase; Discount to ULSD Widens.
Gasoline fell, crack spreads narrowed and the motor fuel’s discount to ultra-low-sulfur diesel widened after a report that gasoline supplies increased last week. Futures weakened after the industry-funded American Petroleum Institute reported yesterday that gasoline stockpiles rose 1.96 million barrels. The median of 11 analyst estimates projected that the Energy Information Administration will report today that inventories fell 1.5 million barrels. “The market was surprised by the build in gasoline stocks reported by the API and will await confirmation this morning from the EIA,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. Gasoline for May delivery fell 3.27 cents, or 1.1 percent, to $2.9097 a gallon at 9:42 a.m. on the New York Mercantile Exchange. Trading volume was 34 percent above the 100-day average. The API reported inventories in the U.S. East Coast, or PADD 1 region, which includes New York Harbor, the delivery point for Nymex futures, increased 2.16 million barrels. The motor fuel was the worst performer today on the Standard & Poor’s GSCI index of 24 commodities. Gasoline’s discount to ULSD widened 3.05 cents to 4.94 cents a gallon, after narrowing the prior four days.
Crack Spreads:
The May crack spread versus West Texas Intermediate crude on Nymex fell $1.10 to $28.28 a barrel. The spread against Brent oil on ICE Futures Europe Exchange slipped 97 cents to $16.38. Gasoline at the pump, averaged nationwide, fell 1.1 cents to $3.572 a gallon, AAA said today on its website. Prices have fallen 21.4 cents from the year-to-date high of $3.786 on Feb. 26 and are 35 cents below a year earlier. The EIA is scheduled to report last week’s inventories at 10:30 a.m. in Washington. The report will probably say that distillate supplies fell 1.5 million barrels, according to the survey. The API reported a decline of 1.26 million barrels. Ultra-low-sulfur diesel for May delivery fell 0.22 cent to $2.9591 a gallon on volume that was 27 percent below the 100-day average.

Read More
sweetfutures.com/2013/market-update-from-mike-kuta-the-squawk-trader-3/

The risk of loss in trading futures and options can be substantial, therefore only genuine "risk" funds should be used in such trading. Futures and options may not be a suitable investment for all individuals and individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. Information herein has been obtained and prepared from sources believed to be reliable; however no guarantee to its accuracy is made. Comments contained in these materials are not intended to be a solicitation to buy or sell any of the commodities mentioned. Past performance is not indicative of future performance results. Opinions expressed herein are the opinions of the author only and not the opinion of any firm the author may be affiliated or associated with.