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Hansen: Metals caught up in battle of the engines
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Saxo's Ole Hansen describes it as a 'battle of the engines', as metals have been hit by the fallout from the Volkswagen scandal. It's meant that this week palladium, used in gasoline engines, is up around 9% while platinum, used in diesel engines, is down around 3.5%.
Sticking with metals and it's been an interesting week for gold. It received a boost from the dovish Federal Reserve meeting last week. But Janet Yellen has since hinted that a rate hike is still on the cards this year which has hurt the yellow metal. Hansen discusses the key levels to look out for.
There's a consensus among energy analysts that WTI crude will hit the 60 US dollar level by the end of 2016. Ole says supply gluts are starting to ease and there's optimism that demand could strengthen. However, he explains that when it comes to the current price of crude, "we aren't out of the woods yet".
Meanwhile it's been a bittersweet week for sugar. Ole says the fundamentals for the soft are improving but the price has struggled because the Brazilian real is down by more than 50% YTD. On Thursday BRL rallied by more than 7%, which helped sugar and the trade Ole entered. You can read more about his #SaxoStrats here.