Commodities Weekly Rates, FX, and Commodities Strategy

Transcription

1 Rates, FX, and Commodities Strategy TRUMP S LOW USD PREFERENCE AND GEOPOLITICAL RISKS LIFT GOLD, OIL COMMODITIES UPDATE & WEEK AHEAD DRIVERS 2 ECONOMIC INDICATORS & DATA CALENDAR 5 COMMODITY PRICE FORECASTS 6 MODEL PORTFOLIO TRADE RECOMMENDATIONS 6 TD SECURITIES GLOBAL METALS INDEX 7 WEEKLY PRICE TABLE 8 ETF MONITOR TABLE & CHARTS 9 CHART PACKAGE 11 RESEARCH TEAM 19 Commodity Price Percent Change (7Apr17 to 13Apr17) Weekly Commodity Movers & Shakers Silver AECO NG Gold Platinum 3.% 2.9% 2.7% 2.% Gold, silver and platinum all caught a bid last week as Trump talked down the dollar, yields fell, geopolitical tensions rose, and US data came in below expectations. Change in Price (%) WTI S&P GSCI Index Heating Oil Brent Coal Molybdenum Uranium Lead.2% 1.8% 1.6% 1.3% 1.2% 1.%.7%.% Crude oil was up as built up shorts covered amid expectations OPEC will keep cuts, lowerthanexpected inventories. Copper rally continued to run out of steam amid normalizing Chilean production and Indonesian exports, with the unwinding of extreme spec length, elevated inventory levels, and less robust demand from China/ US also helping to moderate copper enthusiasm. Gasoline Palladium Henry Hub NG Zinc.6%.8% 1.% 2.% An increase in exports from China along with an overall riskoff sentiment in the market saw aluminium fall from recent highs. Copper Aluminum Nickel 4.2% 2.4% 2.7% Nickel was the worst performer on the week, as ore shipments from Indonesia are set to resume, and the rainy season in Philippines has come to an end. Disclaimer: This report is a marketing communication. It has not been prepared in accordance with legal requirements, as outlined in the UK FCA s COBS, designed to promote the independence of investment research and is also not subject to any prohibition of dealing ahead of the dissemination of investment research, although as a matter of policy TD Securities requires its employees not to deal ahead of the dissemination of this report. 1

2 COMMODITIES UPDATE & WEEK AHEAD DRIVERS Tough to Move Beyond $13+ In a Sustainable Matter Donald Trump's stated preference for a low USD and cheap money worked along with geopolitical storms to send gold to the upper bound, with $1,3 a possibility Conviction OPEC/Russia will maintain cuts after June, US missile strikes and an unexpected draw managed to lift oil, despite concerns over US production $6 in sight Riskoff sentiment and fewer supply concerns prompted investors to dump base metals US infrastructure doubts and China to applying more selling pressure Platinum gets a lift from gold, even as demand prospects dim amid less robust economic data Led by silver, gold and crude oil, the S&P GSCI commodity index has risen for a third consecutive week. With the 1.6 percent move higher, the commodity complex is now nearly 3.5 percent above where it was at the end of March. The latest commodity rebound has been triggered by gold investors responding to President Trump's musings suggesting that he is uncomfortable with an elevated US dollar and his preference for a low interest rate environment. In addition to these statements, precious metals received a boost from weakerthanexpected US economic numbers and speculation that the Trump Administration may be looking for dove when Janet Yellen's tenure expirers early next year. While gold was up 2.6% on the week and it shot through several key technical levels, the still robust equity market, lack of de facto geopolitical crisis and Fed tightening into 18, which includes reducing the central bank's balance sheet, suggest that the yellow metal is unlikely to settle above the $1,3 for a sustained period. Indeed, gold fell toward $1,281 on Monday after hitting a high of $1,295. Looking for rebalancing in the aftermath of OPEC and Russian statements pointing to their willingness to extend the current production cuts for the rest of 17 has prompted investors to again lift oil prices quite aggressively. Indeed, after slashing their long bets in response to rising crude oil inventories and speculation the Fed may be tilting toward a more hawkish stance in the latter part of March, investors once again aggressively covered shorts, which no doubt helped to lift crude into position for a rally toward $6/bbl. Trump s Low Dollar, Low Rates Statement Gets Investors to Buy In Dropping Inventories Bode Well For S/D Rebalancing Should OPEC and Russia Keep Cuts BBL Oct28 Nov25 Dec23 Jan Mar17 May12 Jun9 Jul7 Aug4 Sep1 Sep29 Oct27 Nov24 Dec22 16 Total Oil and Products Inventory 17 Total Oil and Products Inventory Source: DOE, TD Securities 2

3 Much largerthanexpected US crude and petroleum products inventory declines, at a time seasonal trends tilt toward a build, also helped to make markets comfortable with the idea that global oil markets are set to rebalance later in the year. But ongoing US oil production gains have restrained the upside, with many believing US activity may prevent an oil market rebalancing near term. Indeed, this has served as a dampener on crude last week. Despite strongerthanexpected Chinese economic indicators, geopolitical angst surrounding North Korea and the potential tensions, which could emerge between China and the US as western world pressure grows on the Hermit kingdom to eliminate its nuclear arsenal, has gone a long way to convince investors to turn away from Nickel, aluminium, copper, zinc and lead. In addition to the riskoff sentiment and demand concerns, less supply concerns in the aftermath of the Escondida work stoppage and speculation that Chinese smelters will increase zinc output also helped to persuade investors to lighten their base metals holdings. But the downtrend did not continue on Monday, as copper, aluminium, zinc and nickel posted strong gains in response to an improved China economic growth outlook which fueled optimism about demand. China s economy roared back in the first three months of 17, posting its first consecutive quarterly economic growth acceleration in seven years and lifting the global base metals outlook. The Chinese economy grew a betterthanexpected 6.9 percent, as housing, infrastructure investment, exports and retail sales all showed resilience without the erosion of credit quality. Gold Jumps to Test $1,3 but Rally Susceptible to Fed's Gravitational Pull Following three straight sessions of gains, it could be said gold and silver both had a very good week as they closed 2.6 and 2.8 percent higher, respectively. Prices were bolstered as the US currency fell after President Donald Trump, in an Oval Office interview with The Wall Street Journal last Wednesday, said the currency has been trading at too strong of a level and that he likes a low interest rate environment. This had the effect of forcing US rates lower and has generated speculation that the Trump Administration may keep the relatively dovish Janet Yellen as Fed Chair or replace her with a dovish policy maker, after she leaves early next year. The yellow metal and silver were also lifted by rising geopolitical risks, after the US President dropped the "Mother Of All Bombs" in Afghanistan and became more determined to prompt North Korea to end its nuclear program. President Trump affirmed that North Korea is the U.S.'s biggest international threat, with the Chinese warning the US administration that the situation with Pyongyang is becoming extremely dangerous. But the presidential musings and geopolitics were not the only gold and silver drivers. Disappointing US economic data also played a very big role, as the weak numbers convinced many market participants that the US central bank will be very cautious when it removes the current monetary accommodation. The March US production price index, the core CPI, retail sales, and Michigan sentiment index all came in below expectations, which many traders believe suggests a more dovish tilting Fed in the coming months. $/oz Geopolitical Angst Prompts Base Metals Sales Gold LME Index (rhs) Mar 3 Mar 6 Apr 13 Apr Index Index Jan 15 US Data Disappointments Help Gold Citi US Economic Surprise Index Gold Price (rhs) May 15 Sep 15 Jan 16 May 16 Sep 16 Jan $/oz 3

4 Flattening Curve Good For Gold This, along with the likelihood the Fed will reduce its balance sheet has reduced the opportunity cost of holding zeroyielding assets such as gold and silver a flatter yield curve, lower short term rates and a weaker USD are all very strong catalysts which helped gold to move above resistance over the last several days. All these factors and the resulting general riskoff sentiment, which also included a less robust US equity market has helped to send gold to a high of $1,295.61/oz, with silver hitting a high of $18.65/oz on Monday. Investors Need More Geopolitical Angst and Dovish Fed Rhetoric to Build Longs After shooting through the dma and breaching the 61.8 percent fib, will gold move into $1,3+ range for a sustained period and will silver take off higher as well. Given that the US economy is posting only more moderate activity and not collapsing, the US central bank should continue to proceed with its tightening program and will likely go out of its way to communicate this to the market. This implies that gold has a very tough ceiling to breach near $,129/oz which will also serve as a magnet preventing the yellow metal to breakout materially past the $1,3/oz mark on a sustained basis. While the specter of rising interest rates and Fed messaging signaling less monetary accommodation should prevent the yellow metal from breaking out far beyond $1,3 in a sustained way, a temporary move to $1,3518/oz is entirely possible should we see more US economic weakness or the situation in Europe (eg. French elections), North Korea or the Middle East go off the rails. Bart Melek 4

5 ECONOMIC INDICATORS & DATA CALENDAR Release Consensus Prior TUESDAY (April 18th) The US economic calendar this week consists of March housing data, industrial production, and the Consumer Board Leading Index, the April Philly Fed and prelim April Markit manufacturing, services, and composite PMIs. After data came in below expectation on Friday and Monday morning, traders will be keenly watching this week's releases to see if the string of data disappointments continue. Further soft economic data could prompt many traders to call into question the likelihood of two additional Fed hikes this year, flattening the curve, weakening the dollar, and sending gold toward $13/oz on a sustained basis. While a bounce back in the data could see the yellow metal take back some of the recent rally. Precious metals will also continue to be driven by geopolitical uncertainties, as volatilities spike due to events in North Korea and the Middle East. As long as these tensions remain, gold and other precious metals will maintain a bid as a safe haven asset, but this will not be enough to see prices breakthrough resistance as long as the Fed remains on track to hike. European data such as March CPI, April consumer confidence, and prelim April Markit manufacturing, services, and composite PMIs could also garner some attention from commodity traders, if ECB policy returns to the headlines. But even as the Eurozone economy recovers, any reduction in policy accommodation is not likely soon. At the same time, political uncertainties will remain in France and Germany. Chinese Q1 GDP was released Sunday evening, showing the economy grew more than expected at 6.9%. With the LME closed Monday for the Easter holiday, base metals could be due for a bounce off recent lows when trading resumes on Tuesday. A fight set to ensue between strong Chinese data, a weak USD and a market in riskoff mode could prove for a volatile week in base metals. In energy markets, traders will continue watching the EIA's US inventory reports. Last week's largerthanexpected draws across the board were not enough to break through resistance, and rather the market fixated on increasing production. It is likely the market is looking for a string of impressive inventory reports and an extension from OPEC/Russia before they start to believe that the increasing US production will not be enough to stop a rebalancing of the market. TD Securities continues to believe that the OPEC/Russia cuts (likely to be extended), along with increasing global demand, and the coming summer demand will lead to largerthanexpected draws in inventories throughout the summer, which should kick start a move to $6/bbl in 17. Ryan McKay 8:3 USD Housing Starts (Mar) 125k 1288k 8:3 USD Housing Starts m/m (Mar) 3.% 3.% 8:3 USD Building Permits (Mar) 125k 1213k 8:3 USD Building Permits m/m (Mar) 2.8% 6.2% 9:15 USD Industrial Production m/m (Mar).5%.% 9:15 USD Capacity Utilization (Mar) 76.2% 75.4% 9:15 USD Manufacturing (SIC) Production (Mar).%.5% 4:21 EUR ECB Survey of Professional Forecasters (Jan) WEDNESDAY 2: EUR EU27 New Car Registrations (Mar) 2.2% 5: EUR Trade Balance SA (Feb) 18.5bn 15.7bn 5: EUR Trade Balance NSA (Feb) 16.2bn.6bn 5: EUR CPI m/m (Mar).8%.4% 5: EUR CPI y/y (Mar F) 1.5% 1.5% 5: EUR CPI Core y/y (Mar F).7%.7% 7: USD MBA Mortgage Applications (Apr) 1.5% 1:3 USD DOE U.S. Crude Oil Inventories (Apr) 17k 2166k 1:3 USD DOE Cushing OK Crude Inventory (Apr) 1k 276k 1:3 USD DOE U.S. Gasoline Inventories (Apr) k 2973k 1:3 USD DOE U.S. Distillate Inventory (Apr) 1k 2153k 1:3 USD DOE U.S. Refinery Utilization (Apr).1%.2% 1:3 USD DOE Crude Oil Implied Demand (Apr) :3 USD DOE Gasoline Implied Demand (Apr) :3 USD DOE Distillate Implied Demand (Apr) : USD U.S. Federal Reserve Releases Beige Book (Jan) 4/19 4/ CNY FX Settlement Clients CNY (Mar) 69.2bn THURSDAY 5: EUR Construction Output m/m (Feb) 2.3% 5: EUR Construction Output y/y (Feb) 6.2% 8:3 USD Initial Jobless Claims (Apr) 24k 234k 8:3 USD Continuing Claims (Apr) 24k 28k 8:3 USD Philadelphia Fed Business Outlook (Apr) :45 USD Bloomberg Consumer Comfort (Apr) 51 9:45 USD Bloomberg Economic Expectations (Apr) 54 1: EUR Consumer Confidence (Apr A) : USD Leading Index (Mar).2%.6% 1:3 USD EIA Natural Gas Storage Change (Apr) :3 USD EIA Working Natural Gas Implied Flow (Apr) 45 1 FRIDAY 4: EUR Markit Eurozone Manufacturing PMI (Apr P) : EUR Markit Eurozone Services PMI (Apr P) : EUR Markit Eurozone Composite PMI (Apr P) : EUR ECB Current Account SA (Feb) 24.1bn 4: EUR Current Account NSA (Feb) 2.5bn 9:45 USD Markit US Manufacturing PMI (Apr P) :45 USD Markit US Services PMI (Apr P) :45 USD Markit US Composite PMI (Apr P) 53 1: USD Existing Home Sales (Mar) 5.6m 5.48m 1: USD Existing Home Sales m/m (Mar) 2.2% 3.7% 13: USD Baker Hughes U.S. Rig Count (Apr) : USD Baker Hughes U.S. Rotary Gas Rigs (Apr) : USD Baker Hughes U.S. Rotary Oil Rigs (Apr) 683 SATURDAY SUNDAY 2:3 CNY Diesel Exports Volume MT (Mar) 13 2:3 CNY Natural Gas Imports Volume MT (Mar) 2.55m 2:3 CNY LNG Imports Volume MT (Mar) 2.37m MONDAY (April 24th) 5: EUR Govt Debt/GDP Ratio (Jul) 9.4% 8:3 USD Chicago Fed Nat Activity Index (Mar).34 9: CNY Conference Board China March Leading Economic 1:3 USD Dallas Fed Manf. Activity (Apr) Source: Bloomberg *Eastern Standard Time 5

6 COMMODITY PRICE FORECASTS: Commodity Spot Annual (Avg of forward month contracts) Price Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F 16 17F 18F Precious Metals Gold 1 $/oz 1,284 1,225 1,25 1,275 1,275 1,3 1,3 1,325 1,325 1,25 1,256 1,313 Silver 1 $/oz Platinum 1 $/oz ,25 1,25 1,5 1,5 1,75 1, ,3 1,69 Palladium 1 $/oz Base Metals #N/A Copper 2 $/lb $/tonne 5,66 5,8 5,644 5,644 5,644 5,732 5,732 5,842 5,842 4,867 5,683 5,787 Zinc 2 $/lb $/tonne 2,611 2,8 2,822 2,866 2,95 3, 3,42 3,86 3,86 2,91 2,859 3,54 Lead 2 $/lb $/tonne 2,24 2,25 2,3 2,45 2,513 2,535 2,535 2,579 2,579 1,867 2,378 2,557 Nickel 2 $/lb $/tonne 9,695 1, 9,6 1,472 1,472 11,23 11,23 11,574 11,574 9,597 1,186 11,299 Aluminium 2 $/lb $/tonne 1,895 1,85 1,8 1,8 1,88 1,88 1,88 1,852 1,852 1,64 1,814 1,83 Molybdenum 3 $/lb Iron Ore 4 $/tonne Energy #N/A WTI Crude Oil $/bbl Brent Crude Oil $/bbl Heating Oil (ULSD) $/gal Gasoline $/gal NYMEX Natural Gas $/MMBtu AECO Natural Gas $/MMBtu CAD/GJ Uranium $/lb Newcastle Thermal 5 $/tonne Notes: F = Forecast, E = Estimate, A = Actual; 1. London PM Fix; 2. LME; 3. Molybdenum equivalent to moly oxide, FOB USA; 4. CFR China, 62% Fe, dry; 5. Japan CIF steam coal markernewcastle MODEL PORTFOLIO TRADE RECOMMENDATIONS ONGOING MODEL TRADES Trade Entry Date Entry Stop Current Target P/L Long Oct 17 Gold Straddle 5 3/Mar/ n/a % Short Aluminum 4 17/Feb/17 1,9. 1,978. 1,99. 1,768..5% Short Copper/Zinc ratio 3 17/Jan/ % Short Platinum/Palladium ratio 3 17/Jan/ % Short Copper 2 28/Nov/16 5,881. 6,28. 5,692. 5,3. 3.2% Long Oil (Brent) 1 15/Nov/ % CLOSED MODEL TRADES Trade Entry Date Entry Exit Exit Date Target P/L Short Gold 24/Feb/17 1,257. 1,215. 8/Mar/17 1, % Short Gold/Silver ratio 15/Nov/ /Mar/ % Long Gold 1/Dec/16 1,165. 1, /Feb/17 1, % Short Platinum/Palladium ratio 8/Sep/ /Dec/ % Short Copper 1/Nov/16 5,61. 5,85. 25/Nov/16 5,5. 4.4% Short Zinc 2/Sep/16 2, , /Oct/16 2, % Long Palladium 15/Aug/ /Oct/ % Long Copper 22/Sep/16 4,848. 4, /Oct/16 5, % Long Gold 25/Jul/16 1, ,292. 4/Oct/16 1, % Notes: Spread trades P&L calculated on absolute basis; 1. Trade from the 17 Global Outlook; 2. Stop Adjusted to $628 from $61 on Feb 13,17 3. Trades from 17 Commodities Outlook; 4. Trade from Feb 17, 17 Chart Logic; 5. Trade from Mar 3, 17 Chart Logic 6

7 TD SECURITIES GLOBAL METALS PRICE INDEX The TD Securities Global Metals Price Index (TDGMPI) is an aggregate, weighted price measure based on a basket of spot base and precious metals. TDGMPI weights are based on the metals importance in the global economy, with USD dollar value used as a proxy. The TDGMPI encompasses nine metals. The weights are based on a rolling 5 year average contribution of each metal to the total value of global metal production. The nine metals and their current weights are: copper (26.3%), aluminum (16.6%), nickel (5.5%), zinc (4.6%), lead (4.%), gold (35.6%), silver (4.6%), platinum (2.1%) and palladium (.8%). Thus, metals which have a greater impact on the value of world metal production receive a greater weighting in the index. This index can be used as an analytical tool, mainly to track how the metals sector is performing over time, but also to compare performance of each of the individual metals and subsectors (precious metals, base metals) to the index as a whole. $bn TD Global Metals Price Index TD Base Metals Price Index TD Precious Metals Price Index $bn TD Global Metals Price Index (lhs) TD Base Metals Price Index (rhs) TD Precious Metals Price Index (rhs) Source: TD Securities 7

8 WEEKLY PRICE TABLE Commodity Markets Weekly Update Commodity 11Apr a week ago a month ago a year ago year to date TD Global Metals Price Indices TD Global Metals Price Index ($bn) TD Global Precious Metals Price Index ($bn) TD Global Base Metals Price Index ($bn) Precious Metals Gold Spot (US$/oz.) Silver Spot (US$/oz.) Platinum Spot (US$/oz.) Palladium Spot (US$/oz.) Base Metals & Minerals Aluminum (US$/tonne) Copper (US$/tonne) Zinc (US$/tonne) Nickel (US$/tonne) Lead (US$/tonne) Molybdenum (US$/lb.) Cobalt (US$/lb) Tin (US$/lb) UxC Uranium U38 Swap (US$/lb) Bulks Thermal Coal Baltic Dry Index Energy WTI Crude Oil (US$/bbl.) Brent Crude Oil (US$/bbl.) Heating Oil (US$/gal.) Gasoline, RBOB (US$/gal.) NYMEX Natural Gas (US$/mmbtu) AECO Natural Gas (US$/mmbtu) Denatured Ethanol (US$/gal.) Softs USDA No. 1 Hard Red Winter Wheat (US$/bush USDA No. 2 Yellow Corn (US$/bush) USDA No. 1 Yellow Soybeans (US$/bush) Coffee (US$/lb) Cotton (US$/lb) Lean Hogs (US$/lb) Cattle, Feeder (US$/lb) Cattle, Live (US$/lb) Equities S&P S&P TSX Composite S&P TSX Global Gold S&P TSX Global Mining S&P TSX Energy Index XAU Philly Gold & Silver Index FTSE Nikkei Currencies CAD/USD Euro/USD Japanese Yen British Pound Yuan US Trade Weighted Dollar (1973=1)

9 ETF MONITOR TABLE TD Securities: Commodities Trade Strategy Precious Metals ETF Monitor Latest Holdings 5Day Change 3Day Change YearAgo Change Last Updated Date Ounces Value ($US Millions) Ounces Value ($US Millions) Ounces Value ($US Millions) Ounces Value ($US Millions) Total GOLD ETFs 6,474,691 77,913 58,542 2,765 1,216,696 5,69 5,162,154 9,74 SPDR Gold Trust 4/13/17 27,293,664 35,164 39,834 1,49 543,154 2,28 1,248,634 3,64 ETF Securities 4/13/17 9,796,3 12,621 53, , ,37,16 2,236 ishares 4/13/17 6,522,271 8,43 83, , , ZKB 3/3/17 4,734,658 6,1 7, , , Source 4/13/17 3,263,313 4,4 45, , ,67,35 2,241 Sprott Physical 4/13/17 1,755,391 2, (1,963) 11 (5,329) 91 Central Fund of CA 4/1/17 1,672,644 2, (22,) 66 Xetra Gold 4/17/17 1,575,65 2, Julius Baer 4/13/17 1,482,532 1, , , NewGold 4/14/17 1,161,322 1,496 (89) 39 1, ,2 1 Central Gold Trust 1/19/16 71, (841) 23 (841) 4 (3,317) 35 Royal Canadian Mint 4/17/17 3, (82) 18 (8,872) 6 Goldist 4/17/17 51, Total SILVER ETFs 64,815,671 11,85 (331,415) 339 (2,56,352) 661 6,585,67 1,56 ishares 4/12/17 328,1,5 6, (3,71,4) 34 (6,47,1) 646 Central Fund of CA 4/17/17 75,644,12 1, (1,3,1) 15 ETF Securities 4/13/17 8,547,86 1,489 (246,264) , ,753,6 276 ZKB 3/3/17 72,593,8 1,342 (5,151) , ,16, Sprott Physical 4/13/17 55,631,9 1,29 3 (28,1) 6 1,871, Julius Baer 4/13/17 13,67, (35,) 7 67, 16 1,75, 48 Claymore 4/17/17 3,373, Silver Bullion Trust 4/17/17 2,978, Royal Canadian Mint 4/17/17 2,734, (944) 3 (16,567) 6 Total PLATINUM ETFs 2,265,296 2, (3,982) 44 (268,395) (244) ETF Securities 4/13/17 937, (1,335) 43 7, , NewPlat 3/22/17 78, (13,564) 3 (419,542) (44) ZKB 3/3/17 273,99 27 (96) 13 (225) 6 8,391 1 Swiss & Global 4/13/17 11, ,4 5 19,78 Source 4/13/17 8,8 8 1, , ,491 4 Sprott Physical 4/17/17 39, (2,337) (2) Deutsche Bank 4/12/17 28, () 1 (7,835) (7) (7,986) (8) Total PALLADIUM ETFs 1,567,888 1,239 (4,717) (3) (138,3) (86) (696,832) (42) ETF Securities 4/13/17 458, (6,61) (5) (7,67) 1 (238,237) (32) Standard Bank 4/12/17 424, 335 1,976 2 (7) 6 (182,3) (8) NewPall 4/14/17 229, (18) 14, (75,35) (1) ZKB 3/3/17 4, (64) (161) 3 (19,792) (1) Source 4/13/17 8,118 6 () (152,81) (119) (132,592) () Swiss & Global 4/13/17 111, , 7 (7,37) (1) Sprott Physical 4/17/17 9, (57) 1 (5,845) (1) Deutsche Bank 4/12/17 11,155 9 (22) (46,913) () Note: Totals include more than the listed ETFs, hence do not alw ays add up, and the data updates at different, respective ETF issuer 9

10 ETF CHARTS Gold ETF Holdings Silver ETF Holdings 85 8 Total ETF Holdings (LHS) Spot Gold Price (RHS) 1,9 1,8 8 Total ETF Holdings (LHS) Spot Silver Price (RHS) , Million Ounces ,6 1,5 1,4 1,3 1, 1,1 $UZ/Oz Million Ounces $UZ/Oz , Respectiv e ETF Issuer 1, , Respective ETF Issuer 1 Platinum ETF Holdings Palladium ETF Holdings 3,5 2, 4, 1, 3, 1,8 3,5 9 Thousands Ounces 2,5 2, 1,6 1,4 1, $UZ/Oz Thousands Ounces 3, 2, $UZ/Oz 1,5 Total ETF Holdings (LHS ) 1, 2, Total ETF Holdings (LHS) 5 Spot Platinum Price (RHS) 1, , Respectiv e ETF Issuer 8 Spot Palladium Price (RHS) 1, , Respectiv e ETF Issuer 4 1

11 CHART PACKAGE FORWARD CURVES COMEX Gold COMEX Silver $US/Troy Oz 1,445 1,395 1,345 1,295 1,245 1,195 1,145 1,95 1, $US/Troy Oz $US/lb LME Copper $US/lb LME Aluminum $US/lb LME Nickel $US/lb LME Zinc

12 CHART PACKAGE FORWARD CURVES (CONTINUED) NYMEX WTI Crude Oil ICE Brent Crude Oil $US/bbl 48 $US/bbl (rhs) NYMEX 2:1:1 Crack Spread 3.81 NYMEX Natural Gas 18 $US/bbl $US/MMBtu NYMEX Coal 29 NYMEX Uranium $US/Ton 62 $US/Ton

13 CHART PACKAGE VOLATILITY CURVES ATM Implied Vol (%) COMEX Gold ATM Implied Vol (%) COMEX Silver NYMEX Platinum NYMEX Palladium 22 ATM Implied Vol (%) ATM Implied Vol (%)

14 CHART PACKAGE INDUSTRIAL METAL INVENTORIES Days Supply Aluminum Warehouse Inventories Inventory at LME + SHFE (lhs) Aluminum Price (rhs) $US/lb Days Supply Copper Warehouse Inventories Inventory at LME, SHFE, COMEX (lhs) Copper Price (rhs) $US/lb Lead Warehouse Inventories Inventory at LME + SHFE (lhs) Lead Price (rhs) Nickel Warehouse Inventories Inventory at LME (lhs) Nickel Price (rhs) Days Supply $US/lb Days Supply $US/lb Days Supply Zinc Warehouse Inventories Inventory at LME + SHFE (lhs) Zinc Price (rhs) $US/lb

15 CHART PACKAGE PETROLEUM & NATURAL GAS INVENTORIES 59 U.S. Crude Oil Inventory 27 Gasoline Inventory MMbbl MMbbl Oct28 Nov25 Dec23 Jan Mar17 May12 Jun9 Jul7 Aug4 Sep1 Sep29 Oct27 Nov24 Dec22 19 Oct28 Nov25 Dec23 Jan Mar17 May12 Jun9 Jul7 Aug4 Sep1 Sep29 Oct27 Nov24 Dec22 Prior 5yr Range 5yr Avg Source: DOE, TD Securities Prior 5yr Range 5yr Avg Source: DOE, TD Securities 75 Crude Oil Inventory at Cushing, OK 18 Heating Oil (ULSD) Inventory MMbbl Oct28 Nov25 Dec23 Jan Mar17 May12 Jun9 Jul7 Aug4 Sep1 Sep29 Oct27 Nov24 Dec22 MMbbl Oct28 Nov25 Dec23 Jan Mar17 May12 Jun9 Jul7 Aug4 Sep1 Sep29 Oct27 Nov24 Dec22 5yr Range 5yr Avg Source: DOE, TD Securities Prior 5yr Range 5yr Avg Source: DOE, TD Securities Operating Capacity Utilization (%) Refinery Utilization 1.% 95.% 9.% 85.% 8.% 75.% Oct28 Nov25 Dec23 Jan Mar17 May12 Jun9 Jul7 Aug4 Sep1 Sep29 Oct27 Nov24 Dec22 5yr Range 5yr Avg Source: DOE, TD Securities Storage (Bcf) US Natural Gas Storage Level 4,5 4, 3,5 3, 2,5 2, 2,61 Bcf 1,5 1, 5 5yr Range 5yr Avg /Dec 27/Jan 24/Feb 24/Mar 21/Apr 19/May 16/Jun 14/Jul 11/Aug 8/Sep 6/Oct 3/Nov 1/Dec 29/Dec Source: EIA, TD Securities 15

16 CHART PACKAGE COMMITMENTS OF TRADERS 4, COMEX Gold $UD/oz 1,7 1, COMEX Silver $UD/oz 35 35, 3, 25,, 1,6 1,5 1,4 1,3 1, 8, 6, , 1, 5, 1, 1,1 1, 4,, 15 Jan13 Apr13 Jul13 Oct13 Jan14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 9 Jan13 Apr13 Jul13 Oct13 Jan14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 1 Gold Spec Position (lhs) Gold Price (rhs) Silver Spec Position (lhs) Silver Price (rhs) 6, 5, 4, 3,, 1, 8, 6, 4,, (,) (4,) (6,) NYMEX Platinum Jan13 Apr13 Jul13 Oct13 Jan14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Platinum Spec Position (lhs) $UD/oz 1,8 1,7 1,6 1,5 1,4 1,3 1, 1,1 1, 9 8 Platinum Price (rhs) COMEX Copper Jan13 Apr13 Jul13 Oct13 Jan14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Copper Spec Position (lhs) $UD/lb Copper Price (rhs) , 3, 25,, 15, 1, 5, 6, 5, 4, 3,, 1, (1,) (,) NYMEX Palladium Jan13 Apr13 Jul13 Oct13 Jan14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Palladium Spec Position (lhs) $UD/oz 1, Palladium Price (rhs) NYMEX & ICE Natural Gas Jan13 Apr13 Jul13 Oct13 Jan14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Natural Gas Spec Position (lhs) $UD/MMbtu Natural Gas Price (rhs) 16

17 CHART PACKAGE COMMITMENTS OF TRADERS 7, 6, 5, 4, 3,, 1, NYMEX & ICE WTI Crude Oil Jan13 Apr13 Jul13 Oct13 Jan14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 WTI Spec Position (lhs) WTI Price (rhs) $UD/bbl , 25, 15, 5, (5,) (15,) (25,) NYMEX & ICE Brent Crude Oil Jan13 Apr13 Jul13 Oct13 Jan14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Brent Spec Position (lhs) Brent Price (rhs) $UD/bbl , NYMEX Gasoline $UD/gal 35 6, NYMEX Heating Oil $UD/gal 1, 3 4, 29 8, 25, 24 6, 4, 15 (,) 19, 1 (4,) 14 Jan13 Apr13 Jul13 Oct13 Jan14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 5 (6,) Jan13 Apr13 Jul13 Oct13 Jan14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 9 Gasoline Spec Position (lhs) Gasoline Price (rhs) Heating Oil Spec Position (lhs) Heating Oil Price (rhs) LME Copper $UD/MT LME Aluminum $UD/MT Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Copper Spec Position (lhs) Copper Price (rhs) Al Spec Position (lhs) Aluminium Price (rhs) 17

18 CHART PACKAGE COMMITMENTS OF TRADERS LME Nickel $UD/MT LME Zinc $UD/MT Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Nickel Spec Position (lhs) Nickel Price (rhs) Zinc Spec Position (lhs) Zinc Price (rhs) LME Lead $UD/MT Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Lead Spec Position (lhs) Lead Price (rhs) COMMODITIES RESEARCH TEAM: Bart Melek Global Head of Commodity Strategy bart.melek@tdsecurities.com Ryan McKay Commodity Strategist ryan.mckay@tdsecurities.com

19 GLOBAL STRATEGY TEAM Global Strategy Richard Kelly Head of Global Strategy Commodities Strategy Bart Melek Global Head of Commodity Strategy Ryan McKay Commodity Strategist Global Macro Strategy Annette Beacher Chief AsiaPacific Macro Strategist Jacqui Douglas Chief European Macro Strategist James Rossiter Senior Global Strategist Brittany Bauman Macro Strategist Robert Both Macro Strategist Global Rates Strategy Priya Misra Head of Global Rates Strategy Gennadiy Goldberg US Rates Strategist Cheng Chen US Rates Strategist Andrew Kelvin Canada Rates Strategist Prash Newnaha Asia/Pac Rates Strategist Global Strategy USA Canada Australia New Zealand UK Europe Emerging Markets FX & Commodities FX Strategy Ned Rumpeltin European Head of FX Strategy Mark McCormick North American Head of FX Strategy Mazen Issa Senior FX Strategist Emerging Markets Strategy Cristian Maggio Head of Emerging Markets Strategy Paul Fage Senior Emerging Markets Strategist Sacha Tihanyi Senior Emerging Markets Strategist Global Disclaimer TD Securities is a trademark of TD Bank and represents TD Securities Inc., TD Securities (USA) LLC and TD Securities Limited and certain investment and corporate banking activities of TD Bank and its subsidiaries. Copyright 15 The TorontoDominion Bank. All rights reserved. 19