Written by Sumit Roy  |

September 30, 2011

Morning Call: Gold ($1621) Edges Up, Oil And Corn Hover Near Support As Europe Eyed

Details

Investors are cautious ahead of the weekend as pressure mounts on European policymakers to take action.

IN TODAY'S HEADLINES ...

• Caution prevails today as traders bid prices lower ahead of the weekend. After last week's drubbing, most commodities stabilized this week on hopes that Europe would soon unveil new measures to combat the credit crisis. Yet the week has gone by and we have yet to see those measures. Understandably, some traders would rather sell now than wait until Monday to find out whether any progress has been made on that front.
  
  The U.S. dollar is higher by 0.44 percent to 78.37, as measured by the Dollar Index. Italian and Spanish 10-year bond yields are down 1 basis point and up 3 basis points, respectively, to 5.57 percent and 5.13 percent.
  
  
• Though September as a whole has been an extremely volatile month for precious metals, these last couple days have been quite the opposite. As we've written all week, the sector looks set for a long consolidation period, with prices likely to move in the same direction as other risk assets in the very near term.
  
  Gold was last trading higher by $6.53, or 0.4 percent, to $1620.93/oz. Silver shed $0.28, or 0.93 percent, to $30.35 and platinum gained $3.40, or 0.22 percent, to $1525.50.
  Gold Fibonacci Signaling Rebound From September Slump
  
  
• Crude oil continues to hover just above its key support level, with developments next week perhaps being decisive in deciding whether $100 holds for Brent. The benchmark was last trading lower by $0.90, or 0.87 percent, to $103.05/bbl. WTI was lower by $0.84, or 1.02 percent, to $81.30.
  
  Libya's output has reached 300 Kbbl/d, according to Ali Tarhouni, head of the country's oil ministry. That's a big improvement from only a month ago when output was essentially zero amid the civil war in the North African nation.
  Crude Oil Heads for its Biggest Quarterly Decline in New York Since 2008
  
  
• Grains are modestly lower as corn inches toward a crucial support level neat $6/bushel and soybeans hover just above 10-month lows near $12. Corn was last trading down by $0.05, or 0.79 percent, to $6.28; soybeans lost $0.04, or 0.33 percent, to $12.26; and wheat fell by $0.02, or 0.23 percent, to $6.53.
  China grain prices to rise despite bigger harvest
  
  
• Copper fell modestly to $7259/mt on the London Metal Exchange today, just above the 14-month low of $6800 set earlier this week. Analysts cut their year-end price forecast to $6500 from $7773 a week ago, according to a Bloomberg survey.
  
  "It is remarkable how long copper has stayed at elevated levels, but now everyone is just giving up on everything at the slightest smell of risk," said Arne Lohmann Rasmussen, the head of rates, foreign exchange and commodities strategy at Danske Bank A/S in Copenhagen. "Even with lower growth in 2012, the picture still looks promising for some commodities, but we have to go through this phase of very high volatility."
  Copper Rout Outpaces Analysts Focused on Production Shortages
  
  What to Watch For:
  
  8:30 a.m. EDT: Personal Income, Personal Spending (August)
  
  9:45 a.m. EDT: Chicago Purchasing Manager Index (September)
  
  1:00 p.m. EDT: Baker Hughes Rig Count