Written by Sumit Roy  |

June 22, 2012

Morning Call: Gold ($1570) Edges Higher After Plunge, Oil Rebounds On Bargain Buying

Details

• Bargain buying is lifting gold modestly after the steep losses on Thursday. The yellow metal was last trading up by $3.92, or 0.25 percent, to $1570.20/oz, while silver was unchanged at $26.90.
  
  Platinum fell by $1.25, or 0.09 percent, to $1438 and palladium edged down by $0.58, or 0.1 percent, to $608.17.
  
  "The price action looks weak, but overall [gold] has been contained in this 1528 to 1640 range for two months," ScotiaMocatta said in a note. "A break of 1523, the December low, would see liquidation looking for a bigger move."
  Gold recovers after biggest 1-day drop since February
  
  
• The free-fall in crude oil prices is taking a pause today, as Brent rebounds $0.77, or 0.86 percent, to $90, while WTI edges up by $0.24, or 0.31 percent, to $78.44.
  
  "It's time for a rebound," said Hannes Loacker, an analyst at Raiffeisen Bank International. "Below $90 per barrel [for Brent], the marginal cost projects are not economically viable any more. So some oil companies will have to cut capital expenditure if prices fall further."
  Brent Oil Rises as Plunge Below $90 May Be Excessive
  
  
• Natural gas prices continue to consolidate ahead of an expected heat wave across the United States in the coming weeks. Gas was last trading at $2.57/mmbtu, a loss of $0.01, or 0.35 percent.
  Goldman Sachs's West Discusses Natural-Gas Markets
  
  
• The grain complex is outperforming today, as corn adds $0.08, or 1.41 percent, to $5.95/bushel, while soybeans rises by $0.12, or 0.83 percent, to $14.51 and wheat gains $0.13, or 1.96 percent, to $6.75.
  
  "Corn was down 4 percent yesterday, and I think we are seeing a little bit of short covering today," Ker Chung Yang, commodities analyst at Phillip Futures.
  U.S. corn heads for biggest weekly gain since 2010
  
  
• Copper was last trading down $0.01, or 0.3 percent, to $3.29/lb.
  
  "The longer that we see prices depressed, a lot of the planned projects will be re-examined so a lot of the oversupply which we think was expected in 2014, say for copper, there's now a question mark around it," said AME's Fusarelli.
  
  "For a lot of the producers, the current market movements may in turn be a blessing in disguise," he said.
  Copper hits 6-month low on shaky economic outlook
  
  

What to Watch For: