Written by Sumit Roy  |

July 03, 2012

Morning Call: Gold Jumps To $1615 On Stimulus Hopes, Brent Surges Above $100, Copper At 2-Month High

Details

• Gold and silver are higher today, as traders speculate that the Fed may ease monetary policy further following Monday's weak reading on U.S. manufacturing. The yellow metal was last trading up by $17.90, or 1.12 percent, to $1615/oz, while silver jumped $0.52, or 1.9 percent, to $28.02.
  
  Platinum added $15.75, or 1.08 percent, to $1471.50 and palladium rose by $11.44, or 1.98 percent, to $589.69.
  
  "Gold lacks direction, but sees a stronger quarter ahead as the spotlight returns to the U.S. economy," said Lynette Tan, an investment analyst at Phillip Futures. "Gold prices have been sensitive to signs of economic weakness, which tend to increase the likelihood of monetary easing by the Federal Reserve."
  Gold Climbs Above $1,600 as Economic Data Lift Easing Prospects
  
  
• Crude oil is up amid renewed supply jitters. The European Union's embargo on Iranian crude went into full effect on Sunday. In response, Iranian lawmakers began drafting a law to close the Strait of Hormuz to any tankers destined for EU countries.
  
  "Growing political tension and potential supply disruptions will be supportive for oil prices, particularly Brent, despite macroeconomic concerns," Mark Pervan, the head of commodity research at Australia & New Zealand Banking Group, said.
  
  Brent was last trading up by $2.44, or 2.51 percent, to $99.78 after surpassing $100 earlier, while WTI gained $1.99, or 2.38 percent, to $85.74.
  Oil Rebounds in New York on Global Stimulus Speculation, Iran
  
  
• Natural gas prices were last trading at $2.81/mmbtu, a loss of $0.01, or 0.39 percent. Weather forecasts for the next two-week period continue to show warmer-than-normal temperatures across the United States, which should boost demand for gas.
  US Probes Chesapeake, Rival Over Possible Collusion
  
  
• The relentless rally in grains continues today, as corn adds another $0.06, or 0.79 percent, to $6.98/bushel, while soybeans rises by $0.09, or 0.55 percent, to $15.40 and wheat advances $0.05, or 0.63 percent, to $7.59.
  
  Corn is at a nine-month high, soybeans is at a four-year high and wheat is at a 10-month high.
  
  On Monday, the USDA's Crop Progress Report showed that only 48 percent of the corn crop was in good-to-excellent condition, down from 56 percent the week before. Only 45 percent of the soybeans crop was in good-to-excellent condition, down from 53 percent.
  Scorching US weather sends corn, soybeans to highs
  
  
• Copper was last trading up by $0.06, or 1.67 percent, to $3.52/lb—the best level since May. Prices are getting a boost from the broad-based buying in commodities.
  
  "We've had some quite negative data out of the United States, and on the back of this we're seeing weakness in the dollar and expectations that the Fed will act sooner rather than later," Deutsche Bank analyst Dan Brebner said.
  
  "Also in China there's a growing sense that we may see further stimulus, with another reserve ratio cut, so I think those two things are supporting the base metals," he added.
  Copper hits six-week high, stimulus prospects help
  
  

What to Watch For:

10:00 a.m. ET: Factory Orders (May)