Written by Sumit Roy  |

February 07, 2012

Market Wrap: Gold Surges Back From Earlier Losses, Brent Hits 6-Month High At $117.50, WTI Finally Rallies

Details

Commodities reverse to finish the session mostly higher.

Commodities recovered from earlier losses to rise today as bargain hunters stepped in to buy. On the macro front, markets continue to watch the events in Greece, where lawmakers are negotiating with each other and with the EU and IMF over what reforms to implement in order to receive the second €130 billion bailout that is required to stave off default in the country. But clearly, traders are not concerned about the situation; arguably, the potential for an "orderly" default has already been priced in.

• Gold recovered sharply from overnight lows as the uptrend that began late last year resumed. The yellow metal was last trading up by $26.68, or 1.55 percent, to $1747.03/oz, while silver added $0.42, or 1.53 percent, to $34.18. Platinum gained $25, or 1.54 percent, to $1651.50 and palladium inched higher by $2, or 0.28 percent, to $708.
  
  "We now expect platinum mined output to be flat in 2012, and to rise by 2.5 percent in 2013," said BNP Paribas. "Palladium output may contract by 1 percent in 2012 and increase by 2 percent the following year."
  
  
• Crude oil rallied today as even WTI managed to put in a gain. The benchmark was last trading up by $1.70, or 1.75 percent, to $98.61/bbl, while Brent gained $1.17, or 1.01 percent, to $117.10 after reaching as high as $117.50 earlier—the best level in over six months.
  
  The WTI-Brent spread fell slightly to $18.49 after widening to over $20 early in the session. We wrote about the spread on Monday in our Market Alert.
  
  
• Natural gas fell by $0.10, or 3.73 percent, to $2.46/mmbtu. The latest weather forecasts indicate warmer-than-normal temperatures across the major consumption areas of the Midwest and the East, keeping with the bearish trends we've seen all winter.
  
  
• The grain complex was narrow mixed today, with corn last trading down by $0.02, or 0.23 percent, to $6.43/bushel, while soybeans rose fractionally, to $12.33, and wheat lost $0.02, or 0.3 percent, to $6.67.
  
  
• Copper prices inched higher by $0.01, or 0.3 percent, to $3.88/lb on Comex. "It's all Greek related right now, there's nothing fundamentally to move the markets in term of Chinese demand," said Ed Meir of INTL-FCStone. "Markets will discount some sort of agreement and the firmer tone will probably carry on until we have the next big shoe drop—the Chinese trade data for January could be significant."