Written by Sumit Roy  |

July 16, 2012

Morning Call: Gold Recovers After Dismal US Retail Sales Spur QE3 Speculation, Corn Up Ahead Of Data

Details

The U.S. Dollar Index rebounded to once again trade near two-year highs. It was last trading at 83.64, a gain of 0.34 percent.

• Gold is lower today, though it recovered from its worst levels after the retail sales data amid QE3 hopes. The yellow metal was last trading down by $2.88, or 0.18 percent, to $1586.80/oz, while silver shed $0.24, or 0.86 percent, to $27.09.
  
  Platinum fell by $10.25, or 0.72 percent, to $1420.25 and palladium fell by $4.10, or 0.7 percent, to $580.90.
  
  "Macro developments and policy expectations are likely to continue driving the gold market for the remainder of 2012, and so it's more of the same for gold as we have seen in recent months," said analysts at UBS.
  
  "Clear signs of deterioration in the global economy are needed for the market's expectations of policy response to accelerate, which in turn would lift gold prices," they added.
  Gold eases as stocks, euro wilt ahead of Bernanke
  
  
• Crude oil is mixed today, but Brent remains near six-week highs. The benchmark was last trading up by $0.15, or 0.15 percent, to $102.55, while WTI fell by $0.50, or 0.57 percent, to $86.60.
  
  "It's true that the Chinese economy is expanding more slowly than in the past, though their growth rate is still pretty good," said Michael Poulsen, an analyst at Global Risk Management.
  Crude Oil Futures Drop From One-Week High
  
  
• Natural gas prices were last trading up by $0.03, or 0.9 percent, to $2.90/mmbtu. Weather forecasts continue to indicate warmer-than-normal temperatures across the United States over the next two-week period.
  From Coal To Gas: The Potential Risks And Rewards
  
  
• The grain sector is mixed ahead of today's Crop Progress report from the USDA, which will provide traders with the latest update on the condition of U.S. crops. Corn was last trading up by $0.13, or 1.69 percent, to $7.69, while soybeans fell by $0.12, or 0.75 percent, to $16.30 and wheat rallied by $0.32, or 3.8 percent, to $8.74—a 17-month high.
  
  "My guess is that [corn and soybeans] ratings in the good-to-excellent category will decline 5 to 6 points," said Michael Cordonnier of Soybean and Corn Advisory.
  Further downgrade of crops to sustain rally
  
  
• Copper was last trading down by $0.03, or 0.76 percent, to $3.47/lb on Comex.
  
  "Hints of quantitative easing or comments suggesting further loosening in China are supportive, but there's lots of headwinds at the moment, so we need something really aggressive to have a sustained recovery in this backdrop," RBS analyst Nikos Kavalis said.
  Copper dips; U.S., China stimulus eyed
  
  

What to Watch For: