Written by Sumit Roy  |

May 02, 2012

Morning Call: Gold Falls On Weak US Jobs Data, Record Unemployment in Euro; Pickens Says NatGas Bottom In

Details

Disappointing labor market data in the U.S. and Europe spurs losses in risk assets.

IN TODAY'S HEADLINES...

Commodities and stocks are falling across the board today after a disappointing labor market report from ADP. The payroll processor said that private employers only added 119K jobs in April, below the 170K that was anticipated. The official government numbers are scheduled for release on Friday.

Also pressuring risk assets is data from Europe, which showed that unemployment in the eurozone hit a euro-era record of 10.9 percent in March, up from 10.8 percent in the prior month.

• Precious metals are failing to garner any significant safe-haven flows despite today's disappointing data. Gold was last trading lower by $5.48, or 0.33 percent, to $1656.95/oz, while silver shed $0.27, or 0.88 percent, to $30.70. Platinum fell by $8.75, or 0.56 percent, to $1562.75 and palladium sank $5.50, or 0.81 percent, to $675.25.
  
  "Pockets of profit-taking have been seen," said James Moore, an analyst at TheBullionDesk.com. "Comments from several Fed officials diminished the likelihood of QE3, prompting investors to cut [positions]."
  Gold Falls a 3rd Day on Speculation Stimulus Not Needed
  
  
• Crude oil prices are modestly lower ahead of the EIA's Weekly Petroleum Status Report. The less-authoritative API report showed that crude inventories rose by 2 mmbbl, gasoline inventories fell by 3.9 mmbbl, and distillate inventories fell by 4.2 mmbbl last week.
  
  Brent was last trading to the downside by $0.57, or 0.48 percent, to $119.09, while WTI lost $0.51, or 0.48 percent, to $105.65.
  
  "Concerns about Europe continue to weigh on risk," said Michael Hewson, an analyst at CMC Market. "There's still a lot of uncertainty ahead of this weekend's events in France, Greece, and Italy. Economic data continue to disappoint in Europe."
  Oil Drops From Five-Week High as U.S. Stockpiles Advance
  
  
• Though slightly lower today, natural gas prices remain near the highest levels since March amid optimism that production may finally be starting to decline. Gas was last trading at $2.36/mmbtu, a loss of $0.02, or 0.67 percent, on the session.
  
  "The price for natural gas has smoothed out pretty good," said legendary investor T. Boone Pickens. "I think it's bottomed."
  T. Boone Pickens: Natural gas prices bottomed
  
  
• The grain complex is modestly lower today, in line with other commodities. Corn was last trading down by $0.03, or 0.49 percent, to $6.57/bushel, while soybeans shed $0.05, or 0.32 percent, to $14.93 and wheat fell by $0.06, or 0.91 percent, to $6.28.
  CME Group fires back at ICE with 22-hour grains trade
  
  
• Today's disappointing economic news is spurring losses in copper. The industrial metal is tumbling by $0.07, or 1.69 percent, to $3.78/lb.
  
  "The major concern is end-use demand. We have seen a surge in imports (to China) a few months ago and that has gone almost entirely into stock in China. With the arbitrage being closed, imports are likely to be much weaker over the next few months," said Ross Strachan, commodities economist at Capital Economics.
  Copper slips on weak euro, China demand concerns
  
  

What to Watch For:

8:15 a.m. ET: ADP Employment Report (April)

10:30 a.m. ET: Weekly Petroleum Status Report