Since that time, and probably much to Mr. B’s relief, crude oil (upon whose price much of the inflation chatter was based upon in April) has dipped to under the century mark and other commodities have fallen in value as well. However, as reflected in a recent statement he made, at least one Fed member feels that the US central bank ought to drop its current “core inflation” focus as the metric by which to judge the elevation or lack thereof in prices in the real world. St. Louis Fed President James Bullard would prefer that the Fed adopt a broader view and look at headline inflation and somehow take into account those two more volatile components (food and energy) that are part of the overall inflationary picture.
Once again sounding the alarm on $100 crude, the International Energy Agency said this morning that sky-high black gold threatens to undo the emergent global economic rebound. The IEA showed “serious concern” that the oily bubble that has been growing since last fall is pressing the world’s households and businesses to the proverbial wall and that it is adding unwelcome…energy to the world’s inflationary patterns. The agency urged producers to turn their production spigots even higher, and it basically gave the upcoming June 8 OPEC meeting its top-of-the-list agenda discussion item this morning. Note that the IEA does not normally make such “judgmental” statements on prices, if any at all.
Speaking of black gold, we learned from our vigilant market observer friend Ned Schimdt the other day that the world’s largest commodity fund lost $400 million (not a misprint) in bets on oil gone awry during the week that ended on May 6. FOUR hundred MILLION. What did the management at Clive Capital (the firm in question) have to say about that wipe-out? “We are at a loss to explain what has caused crude oil markets to be annihilated.” Pinocchio would be proud; very, very proud. That line is a doozy.
Spot gold dealings opened near the $1,491 mark in New York this morning, losing about $6 per ounce while the rest of the complex showed marginal gains at the start of the Thursday trading session. Elliott Wave updates issues late yesterday still indicate that if gold can manage a push towards higher than the $1,500 level (one which, thus far, has proven to be a bit of a problem to break above) one might even see the yellow metal trade as high as $1,540 or so prior to once again heading to lower (near $1,400) levels.
Silver gained 15 cents in the early minutes of trading and was quoted at $35.15 the ounce while participants still exhibited a good dose of nervousness and tentative buy/sell patterns. As is the possible case with gold, the white metal might itself be able to stage a rebound, perhaps to as high a value zone as the $39 to $42 area prior to resuming its tilt towards the mid $20s in due course.
Platinum and palladium started off with mixed results this morning, as the former was stalled at $1,765.00 per ounce and the latter fell $1 to the $731.00 mark. No change in rhodium for a change; it remained quoted at the $1,900.00 per troy ounce bid level. Analysts at StandardBank (SA) still continue to see “value” in platinum near $1,700 and in palladium near $700 and are still targeting $1,900 and $900 respectively (by Q4) for the two noble metals.
Japanese automotive industry reports reveal a quite unbalanced recovery in the demand for autocatalysts and the related offtake for platinum-group metals (PGMs). The reports show disparities between, for example, production of cars by Toyota and by Nissan. The aftermath of the March quake continues to produce mixed results for that country’s automakers. Toyota, for example, is not really expected to resume full output until Q4 of this year.