Commodity week roundup

Energy

Oil prices have been able to end the 3rd week in a row with a plus. At the end of the week, Brent crude oil was able to close with a plus of 2.31% to $75.30 per barrel.
WTI crude oil was able to gain 2.13% to $71.96 per barrel.

Operations to recover oil production in the Gulf of Mexico are in full swing. At the moment, about 30% are still offline, but this should be resolved in the next few weeks. The IEA has adjusted its forecast for oil demand and predicted growth in demand until the end of the year.

U.S. crude inventories fell by more than 6 million barrels this week. Thus, the figures are far above the estimates of analysts who estimated a drop of about 3 million barrels.

The Bureau of Labor Statistics has announced the CPI figures. CPI for the month of August was 5.3% (YoY). Gasoline prices increased by 2.8% in August, according to the statistics. As far as the figures can be believed, the inflation for August was lower than that for July (5.4%).

As the supply chain remains tight until the Gulf of Mexico is restored, oil prices are likely to remain at this level for the time being. China has already announced to release parts of their strategic reserves for auction to get some easing in the market. The auction is scheduled for the end of September.

Uranium

Sprott continued to make a splash with its Sprott Physical Uranium Trust, driving the spot price even higher. Meanwhile, the price has already reached the $50 mark and is currently at $49.65. The trust has been able to buy up 28,314,382 pounds of U3O8 so far and has a NAV of $1.48 billion. The trust is currently trading at a premium of -1.25%.

Uranium producer stocks have been reluctant to get going after a rally earlier this year. Here, if you compare earlier uranium bull markets, there is still a lot to be expected.

Precious Metals

Gold is the money of kings, silver the money of gentlemen.
The gold price was pushed to the $1750 resistance line this week after the labor market numbers were seen as positive by investors and traders. The U.S. Dollar Index has risen as a result. Does this mean that the U.S. dollar is regaining its strength or that the other fiat currency units with which the U.S. dollar is compared are simply even worse? Everyone can decide for himself, but it is probably, as so often, the best of the worst.

The price decline can also be used as an opportunity to put the yellow precious metal in his portfolio. The long-term fundamentals speak for a higher future price. To repeat the fundamentals: QE, negative real interest rates, and excessive government debt. In other words, everything that devalues the currency.

Silver was also pulled back below $24 and is currently at $22.36 per ounce. To understand the price movement of silver, one should look again at the background.

  1. many dealers are now running out of physical silver and buyers have to wait a long time for their silver. This should actually drive silver prices up.
  2. silver mines output are declining since 2016. There are assets such as Pan American Silver’s in Guatemala that are considered Tier 1 deposits, but governments are opposing them at the moment. Silver demand will increase in the next few years due to the boom in electric vehicles and solar cells. This should also drive silver prices up.
    Since many facts actually speak for a rising silver price, the recent movement can probably have come from people who have very deep pockets and don’t like high silver prices.

Platinum and palladium continue to move at a low level. The global chip shortage still depresses the auto industry, which is reflected negatively on platinum and palladium. The platinum price is currently at $931.40. The palladium price is currently at $2005.50.

Base Metals

Iron ore prices were rolled down mightily at the end of the week. The prices were pushed down to the $100 mark. The background behind the steep downward movement is the main producer China and their steel producers because the Chinese government is currently paying close attention to the carbon emissions. In July, iron ore prices were still above $200.

The shares of the largest iron mining companies, Vale SA, Rio Tinto, and BHP have suffered heavy losses this week.

Vale S.A. shares down 9.54%
Rio Tinto Group shares down 7.02%
BHP Group shares down 8.74%

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