Written by Sumit Roy  |

June 28, 2012

Morning Call: NatGas Rises for Sixth-Straight Session Ahead Of Inventory Report, Gold & Silver Steady Amid EU Summit

Details

• Gold and silver are treading water once again, as the duo awaits news from the EU summit. The yellow metal was last trading down by $1.77, or 0.11 percent, to $1572.32/oz, while the gray metal edged up by $0.04, or 0.14 percent, to $26.96.
  
  Platinum shed $5.50, or 0.39 percent, to $1404 and palladium lost $1, or 0.17 percent, to $576.75.
  
  "Technical levels show us when the trouble is coming. Gold struggled at $1,700 and then at $1,600. If it breaks through the next key level of $1,500, which could be approaching soon, investors would start panicking and selling hard," Yoni Jacobs, chief investment strategist at Chart Prophet Capital, told CNBC.
  
  "It appears that the market has decided on gold's fate. And it's not looking pretty.  It looks like gold is about to see prices collapse and is on its way to $700," Jacobs added.
  Is Gold on the Edge of a Violent Downturn?
  
  
• Crude oil prices are higher for a second session, with Brent up by $0.26, or 0.28 percent, to $93.76, while WTI adds $0.52, or 0.65 percent, to $80.73.
  
  "We do look for a rebound and feel that the oil price has gone beyond economic fundamentals," Michael Lewis, Deutsche Bank's head of commodities research in London, said. "We are in quite an extreme level of investor pessimism, which would only seem to us justified if the U.S. was going back into a recession."
  Oil Over $100 Seen on Iran After Worst Quarter Since '08
  
  
• Natural gas is up for a sixth straight session today, as an ongoing heat wave across the United States boosts demand for the fuel.  Today's Weekly Storage Report from the EIA may show that inventories rose by 53 billion cubic feet last week, according to analysts surveyed by Bloomberg.
  
  Prices for gas were last trading at $2.79/mmbtu, a gain of $0.01, or 0.43 percent.
  Way Too Soon To Get Into Natural Gas
  
  
• Hot, dry weather in the Midwest continues to fuel speculation that the condition of the corn and soybeans crops will deteriorate further in the coming weeks. The USDA's latest supply and demand forecasts may corroborate these fears when they are released on Friday.
  
  "I think there is likely to be reduction in yield numbers which will ultimately lead to overall reduction in output," said Abah Ofon, an analyst at Standard Chartered Bank. "We are probably not going to return to the $4 a bushel level which was being suggested a few weeks ago with estimates of a record crop."
  
  Corn was last trading up by $0.07, or 1.04 percent, to $6.56/bushel, while soybeans gained $0.09, or 0.58 percent, to $14.80, and wheat fell by $0.02, or 0.31 percent, to $7.30.
  Corn up for 5th day as dryness curbs yields, soy rises
  
  
• Copper was last trading at $3.34/lb on Comex, a loss of $0.01, or 0.16 percent.
  
  "The [base metals] markets are extremely short right now so it doesn't take a lot for prices to rally. Aluminum is at a record short position," said analyst Michael Widmer at Bank of America/Merrill Lynch.
  Copper flat, metals tread water ahead of EU summit
  
  
  

What to Watch For:

8:30 a.m. ET: Initial Jobless Claims