Written by Sumit Roy  |

July 17, 2012

Market Wrap: Brent Tops $104 Despite Bernanke Disappointment, Gold Falls As Industrial Production Rises

Details

Commodities traded mixed today.

Commodities were narrowly mixed today after Ben Bernanke's testimony to Congress. The Fed Chairman did not offer any clues on whether the central bank will unveil new stimulus measures, such as QE3, to aid the struggling U.S. economy, which disappointed some.

While many of the recent economic releases have been on the weak side, today's industrial production figures actually came out better than expected. Output at U.S. factories rose by 0.4 percent in June, beating the 0.3 percent estimate.

The U.S. Dollar Index was little changed today at 83.09.

• Gold fell slightly, as some traders sold after Bernanke failed to hint at QE3, but the yellow metal remains firmly within its recent range. Prices were last trading down by $3.68, or 0.23 percent, to $1585.70, while silver edged up by $0.01, or 0.05 percent, to $27.35.
  
  Platinum rose by $1, or 0.07 percent, to $1418.75 and palladium gained $6.50, or 1.13 percent, to $583.75.
  
  "There [is] little to suggest bullion [is] ready to decouple from the rest of the complex," said analysts at VTB Capital. "It is most likely to continue tracking other commodities, with plenty of macro numbers being released this week, as well as Bernanke's testimony to the Congress later today."
  
  
• Crude oil rallied modestly, as Brent rose by $0.34, or 0.33 percent, to $103.89 after reaching as high as $104.75—a seven-month high. WTI gained $0.56, or 0.63 percent, to $88.99.
  
  "Iran and stimulus hopes are keeping prices supported," said Carsten Fritsch, an analyst at Commerzbank AG.
  
  
• Natural gas was last trading at $2.80/mmbtu, unchanged on the session.
  
  Weather forecasts continue to indicate warmer-than-normal temperatures across the United States, which should boost demand for gas.
  
  
• The grain complex was narrowly mixed, as prices took a breather after surging in recent sessions. Corn was last trading down by $0.02, or 0.23 percent, to $7.75, while soybeans edged up by $0.01, or 0.08 percent, to $16.35 and wheat lost $0.10, or 1.13 percent, to $8.75.
  
  In its Crop Progress report on Monday, the USDA said that only 31 percent of the U.S. corn crop was in good-to-excellent condition, down from 40 percent the week before. Only 34 percent of the soybeans crop was in good-to-excellent condition, down from 40 percent.
  
  
• Copper was last trading at $3.46/lb on Comex, down $0.02, or 0.65 percent, on the session.
  
  "We do expect that the U.S. will launch QE3. The more we see disappointing data from the U.S. economy, the more the financial community will expect further stimulus," said Gianclaudio Torlizzi, partner at T-Commodity.