Written by Sumit Roy  |

July 10, 2012

Morning Call: Gold Rallies Toward $1600, Oil Falls As Strike Ends, Corn Crop Deteriorates

Details

In Europe, the Spanish 10-year bond yield—currently seen as the best gauge of eurozone sovereign debt fears—fell by 24 basis points to 6.82 percent.

The U.S. Dollar Index was last trading up fractionally to 83.22, a gain of 0.07 percent.

• The precious metals sector is higher today as prices continue to seesaw within narrow ranges. Gold was last trading higher by $6.39, or 0.4 percent, to $1594.07/oz, while silver edged up by $0.08, or 0.27 percent, to $27.42.
  
  Platinum inched higher by $0.25, or 0.02 percent, to $1443.75 and palladium added $0.025, or 0.04 percent, to $584.25.
  
  "Loose monetary policies, with a scope for more aggressive balance sheet use in the U.S. and Europe, will keep real rates in most reserve currencies low [or negative] during 2012. We continue to believe that this will allow investor demand to remain strong and prices to reach our $2,000/oz target by the end of the year," said analysts at Merrill Lynch.
  Gold draws strength from dollar decline
  
  
• Crude oil prices moved lower today after the Norwegian government intervened to end a strike that threatened to shut down much of the country's oil output.
  
  Meanwhile, the latest trade data showed that China's imports of crude fell to 5.28 mmbbl/d in June from a record 5.98 mmbbl/d in the prior month.
  
  Brent was last trading down by $1.50, or 1.5 percent, to $98.82, while WTI shed $0.70, or 0.81 percent, to $85.29.
  Crude Drops As Norway Ends Oil Strike, China Cuts Imports
  
  
• Natural gas was last trading at $2.91/mmbtu, a gain of $0.02, or 0.76 percent. The NOAA said that the first half of 2012 was the warmest on record in the United States. While that was a significantly bearish factor early in the year, as it led to an extremely mild winter, it is now a bullish factor, as temperatures sizzle and the demand for electricity jumps.
  Continental U.S. breaks heat record in first half of 2012
  
  
• The grain complex is taking a breather, one day ahead of the USDA's highly anticipated Crop Production report, which will include the department's latest forecast for supply and demand, including crucial yield estimates.
  
  "Radical cuts in the yield and crop forecasts by the USDA tomorrow are inevitable," Commerzbank analysts said.
  
  In its Crop Progress report, the USDA said that only 40 percent of the corn crop was in good-to-excellent condition, down from 48 percent the week before. Likewise, only 40 percent of the soybeans crop was in good-to-excellent condition, down from 45 percent.
  
  Corn was last trading down by $0.10, or 1.23 percent, to $7.65/bushel, while soybeans lost $0.17, or 0.99 percent, to $16.49 and wheat fell by $0.15, or 1.79 percent, to $7.96.
  U.S. corn falls on profit-taking, soybeans retreat
  
  
• Copper was last trading at $3.41/lb on Comex, a loss of $0.01, or 0.39 percent.
  
  China's imports of copper fell almost 18 percent month-over-month in June to 346K metric tons. However, for 2012 as a whole, imports have been 47 percent higher than last year, according to Reuters.
  Copper dips after weak China imports, awaits stimulus
  
  

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