Saxo Group Videos

Why gas is on fire, a China copper scandal and gold's ECB connection

Natural gas is the best commodity performer of the week, rising around four percent. That's despite a recent strong rise in inventories. Saxo Bank's Head of Commodity Strategy, Ole Hansen, explains that hotter US weather would increase demand and slow that build up, which is actually lower than the five year average.

HG Copper recorded a second weekly drop on renewed worries about the strength of Chinese demand. There's also concern about a potential scandal in China. It's alleged that a number of companies have used the same copper and other industrial metals held in Qingdao as collateral for loans. This could ultimately lead to a further clampdown on lending practices and increase the supply of key commodities, such as copper, as companies could be forced to sell those which would otherwise have been tied up in financing deals.

Gold rose after the ECB unveiled stimulus measures on Thursday. Ole explains this is largely down to dealers reining in their short positions.

02:40 minutes
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