Written by Sumit Roy  |

February 15, 2012

Market Wrap: Gold Outperforms After Weak Data, Brent Spikes To 6-Month High Near $120 On Iran Concerns

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Gold, oil and soybeans outperform, while other commodities fall.

It was another mixed session for commodities today, as oil, gold and soybeans outperformed again. U.S. economic news didn't provide support; industrial production in January was unchanged, underperforming analyst expectations that were calling for a 0.7 percent increase. However, December's gain was revised up to 1 percent from the initial 0.4 percent estimate.

• Gold rose on safe-haven buying, while the other precious metals moved lower. The yellow metal was last trading up by $5.95, or 0.35 percent, to $1726.13/oz, while silver shed $0.26, or 0.76 percent, to $33.32. Platinum lost $0.25, or 0.02 percent, to $1632 and palladium shed $4.75, or 0.69 percent, to $682.25.
  
  "Gold does appear to be moving away from being completely denominated by risk-on, risk-off sentiment," said HSBC analyst James Steel.
  
  
• Crude oil rallied today amid news that Iran may preemptively cut oil exports to its six largest European buyers. Brent was last trading up by $1.53, or 1.3 percent, to $118.88/bbl after reaching as high as $119.99 earlier — the best level since Aug. 1. WTI added $1.05, or 1.04 percent, to $101.79.
  
  In its Weekly Petroleum Status Report, the EIA said that U.S. crude oil inventories decreased by 0.2 million barrels, gasoline inventories increased by 0.4 million barrels, distillate inventories decreased by 2.9 million barrels and total petroleum inventories decreased by 4 million barrels last week.
  
  
• Natural gas fell by $0.11, or 4.15 percent, to $2.43/mmbtu, giving back the prior session's advance. Large percentage moves are now the norm and this type of move is simply "normal" trading action. Weather forecasts remain bearish, with warmer-than-normal temperatures still forecast for the major consumption regions of the United States over the next two weeks.
  
  
• Grains were mixed as corn fell by $0.06, or 0.99 percent, to $6.27/bushel, while soybeans rose by $0.08, or 0.64 percent, to $12.63, and wheat fell by $0.09, or 1.34 percent, to $6.27. Soy has been outperforming on supply concerns related to dry weather in Brazil and Paraguay.
  
  
• Copper edged down by $0.01, or 0.3 percent, to $3.80/lb on Comex.
  
  "Generally speaking, the increase in metal prices since the beginning of the year would appear excessive — virtually all metals have seen two-digit growth rates so far — so a correction would not surprise us," said analysts at Commerzbank.