Written by Sumit Roy  |

August 06, 2012

Morning Call: Gold Rallies To $1610 Amid Continued Jobs Optimism, NatGas Falls For Fourth-Straight Session

Details

Traders take profits on commodities after Friday's jump, but gold outperforms.

Commodities are lower to start the new week, as traders take profits following Friday's big jobs-report-inspired rally in prices. However, U.S. stocks continue higher to new three-month highs, suggesting investor sentiment remains positive.

There are no notable macroeconomic releases scheduled for today.

In Europe, Spanish 10-year bond yields—currently seen as the best gauge of eurozone sovereign debt fears—fell by 9 basis points to 6.76 percent.

The U.S. Dollar Index was last trading unchanged at 82.38.

• Gold prices are outperforming today, after underperforming other commodities over the past several weeks. The yellow metal was last trading up by $6.57, or 0.41 percent, to $1610.05, while silver fell by $0.10, or 0.34 percent, to $27.71.
  
  Platinum lost $6.75, or 0.48 percent, to $1399.25 and palladium shed $3.60, or 0.62 percent, to $576.90.
  
  "We expect the wider June-July range to remain intact, with some dull trading for gold at the start of this week as players take a breather from Friday's action, focusing on euro zone headlines," said analysts at VTB Capital.
  Gold rises on expectations of more U.S. stimulus
  
  
• Crude oil is slightly lower today after jumping more than $3 on Friday. Brent was last trading down by $0.49, or 0.45 percent, to $108.45, while WTI shed 0.27, or 0.3 percent, to $91.13.
  
  "This is a small correction after the massive move last Friday," said Eugen Weinberg, head of commodity market research at Commerzbank. "Brent near $110 is a bit excessive."
  Oil Drops After Biggest Gain in 5 Weeks as Storm Slows
  
  
• Natural gas is down for a fourth-straight session, as traders continue to sell on speculation that prices may have rallied too far and too fast. Updated weather forecasts calling for a cooling of temperatures across the United States over the next two weeks are also weighing on prices.
  
  Gas was last trading at $2.85/mmbtu, down $0.02, or 0.8 percent.
  Marcellus will be the nation's No. 1 producer
  
  
• The grain complex is lower across the board. Corn was last trading down by $0.07, or 0.9 percent, to $8.03/bushel, while soybeans fell by $0.32, or 1.93 percent, to $16.24 and wheat sank $0.05, or 0.53 percent, to $8.87.
  
  "The bulls don't have anything more to play with," said grains analyst Dale Durchholz of AgriVisor. "Everyone feels the market is at a tipping point."
  Grains' next move hinges on USDA drought tally
  
  
• Copper was last trading down by $0.01, or 0.4 percent, to $3.35/lb on Comex.
  
  "Longer term we see a bottoming-out process, which is likely to soon be over, and stabilization of the market. We're likely to see falling inventories, mine closures in some metals and a pickup in Chinese buying," said Eugen Weinberg, of Commerzbank.
  Copper dips on firm dollar, China data awaited
  
  

What to Watch For:

4:00 p.m. ET: USDA Crop Progress Report