Written by Sumit Roy  |

June 14, 2012

Market Wrap: NatGas Surges 13% After Inventory Report, Gold Edges Up After OPEC Meeting

Details

Commodities remain choppy as Greece's elections approach.

Trading action in financial markets remained choppy today, as traders positioned themselves ahead of the highly anticipated Greek parliamentary elections this weekend. But elsewhere, the eurozone sovereign debt crisis continued to escalate.

Moody's cut its sovereign credit rating for Spain from A3 to Baa3, leaving it one notch above junk bond levels. The Spanish 10-year bond yield—currently seen as the best gauge of eurozone sovereign debt fears—was last trading up by 16 basis points to 6.92 percent after reaching 6.998 percent earlier, a fresh euro-era record.

Meanwhile, the equivalent yield on Italian bonds was trading unchanged at 6.21 percent after the government auctioned 4.5 billion euros ($5.6 billion) worth of medium-term maturities at interest rates close to market levels.

In economic news, the number of people filing unemployment claims in the United States rose from 380K to 386K last week.

The U.S. Dollar Index was last trading down by 0.09 percent to 81.98.

• Gold was last trading up by $2.82, or 0.17 percent, to $1619.88/oz, while silver edged down by $0.34, or 1.19 percent, to $28.48.
  
  Platinum rose by $24, or 1.64 percent, to $1488.75 and palladium gained $15.25, or 2.46 percent, to $634.38.
  
  "Gold is sitting waiting for something to happen, but I would argue it is waiting for something to happen in the United States, rather than Europe," Natixis analyst Nic Brown said.
  
  "[We need] more clarity in the United States over whether the economic data is going to improve again ... or whether the weakening data is a sign of slower economic growth, and that therefore the Fed will have to do something."
  
  "For me, the focus is definitely on the U.S. side of the Atlantic. In the meantime, gold is going up, down or sideways dependent on what is going on in the euro/dollar rate, and there isn't a great deal else that is moving it around.
  
  
• Crude oil prices were mixed today as Brent fell by $0.16, or 0.16 percent, to $96.97, while WTI added $1.06, or 1.28 percent, to $83.68.
  
  OPEC left its output quota unchanged at 30 mmbbl/d in today's meeting, as expected. With the cartel currently producing 1.6 mmbbl/d above its stated ceiling, the decision will have little impact on the market.
  
  
• Natural gas surged $0.29, or 13.13 percent, to $2.47/mmbtu after the EIA reported that operators injected 67 bcf into storage last week, below the 75 bcf that was expected.
  
  "The market was wrong-footed ahead of the EIA number and the new shorts that piled in have turned and covered," said Eugene McGillan, a broker and trader with Tradition Energy in Stamford, Conn. "Now we're triggering fresh technical buying."
  
  
• The grain complex was a mixed bag today, as corn added $0.08, or 1.3 percent, to $6.01/bushel, while soybeans fell $0.21, or 1.53 percent, to $13.87 and wheat rose by $0.08, or 1.22 percent, to $6.24.
  
  
• Copper was last trading at $3.35/lb, a gain of $0.01, or 0.27 percent.
  
  "The Greek elections are definitely a focus of market players and no one wants to be positioned ahead of these elections as the outcome is so uncertain," Daniel Briesemann, an analyst at Commerzbank, said.