https://themalaysianreserve.com/2019/12/27/palm-oil-closes-above-rm3000-for-1st-time-in-3-years/
Source: themalaysianreserve.com | Friday, December 27th, 2019 at , Business | By BLOOMBERG


SINGAPORE • Palm oil futures closed above RM3,000 per tonne for the first time in almost three years, with concerns about output from second-biggest producer Malaysia prompting investors to buy more at the end of 2019.

Crude palm oil production in the South-East Asian country is estimated to have dropped 16.4% during Dec 1-20 from a month earlier, according to the Malaysian Palm Oil Association. The growers’ group said output fell 20% in Peninsular Malaysia, 10.9% in Sabah and 7.4% in Sarawak.

The market was also supported by firmer crude oil prices, which increased the tropical oil’s biofuel appeal.

Still, gains in futures were capped by Intertek data showing Malaysia’s palm oil exports slumped 12.8% from a month earlier to 1.04 million tonnes during Dec 1-25. Cargo surveyor AmSpec Agri said shipments declined 9.6%.

The world’s most-consumed cooking oil has surged 41.6% so far this year after sharp declines in the past two years, and heads for its best year since 2010.

Meanwhile, gold firmed up a foothold above US$1,500 (RM6,199) an oz as investors positioned for 2020, with post-Christmas gains coming even as equities inched higher and US-China trade concerns eased.

Silver rose along with platinum in what’s been a banner year for precious metals. Bullion advanced for a fourth day, the best run since October, and headed for the highest close in more than seven weeks.

The climb comes amid a focus on whether the US Federal Reserve’s (Fed) rate-cutting pause will hold next year following three reductions in 2019.

“Without a dovish Fed pivot, it’s unlikely gold will make explosive gains, but it does appear the market is trying to carve out a new higher trading range,” Stephen Innes, chief Asia market strategist at AxiTrader, said in a note.

That current trend “is a very favourable sign for gold bulls,” he said. Gold is up 17% this year — set for the best showing since 2010 — as investors weighed the benefit of havens amid the to-and-fro of the US-China trade war and a run of central bank easing.

The latest tick higher came even as Asian stocks edged up, and US President Donald Trump said on Tuesday a deal with Beijing is “done”.

“Caution needs to be exercised as the bullion markets could be extremely volatile, given the market’s low liquidity profile, especially to the downside as trade news remains positive and equity markets still scaling new heights,” Innes said.

Spot gold advanced as much as 0.4% to US$1,505.62 an oz, the highest intraday price since Nov 5, and was at $1,504.71 at 8:43 am in London yesterday, where many market participants remain on leave for the Boxing Day break. Silver climbed as much as 1.4% to US$18.02 an oz.

Bullion peaked this year at US$1,557.11 an oz in early September, the highest price in more than six years, and its ascent came against a backdrop of a record run for equities on Wall Street.

Global holdings in gold-backed exchange-traded funds have also expanded in 2019.

Heading into the new year, there are mixed views on gold’s prospects.

Earlier this month, JPMorgan Chase & Co advised betting on gold to slide as the global economy gathers momentum.

Among the bulls, Goldman Sachs Group Inc and UBS Group AG see prices climbing to US$1,600 an oz.

Other precious metals have also fared well. Palladium — which was steady at US$1,885.90 an oz yesterday — struck a record US$2,000.35 last week, and is still 50% higher this year.

Platinum rose 0.5%, extending the metal’s annual gain to 19%. — Bloomberg