Written by Sumit Roy  |

August 13, 2012

Market Wrap: Gold Falls To $1610 Amid China Slowdown Concerns, NatGas At 2-Month Low, Oil Outperforms

Details

Most commodities fell today.

Oil outperformed, but most commodities fell today on the back of China growth concerns following last week's disappointing economic data. However, there were no major macroeconomic releases in today's session.

In Europe, Spanish 10-year bond yields—currently seen as the best gauge of eurozone sovereign debt fears—were last trading down by 7 basis points to 6.84 percent.

The U.S. Dollar Index fell by 0.17 percent to 82.41.

• Gold fell modestly, trading in line with other commodities. The yellow metal was last trading down by $9.60, or 0.59 percent, to $1610.60, while silver fell by $0.30, or 1.05 percent, to $27.83.
  
  Platinum edged down by $0.30, or 1.05 percent, to $1387.87, while palladium fell by $7.50, or 1.29 percent, to $575.25.
  
  "We are still in this range-bound trading area, with the upper limit being $1630," LGT Capital Management analyst Bayram Dincer said. "Technically speaking, [a break of] $1,633 is really the trigger that is needed to push gold higher."
  
  
• The sizzling rally in crude oil prices continued, as Brent hit the highest level since early May. The benchmark was last trading up by $1.14, or 1.01 percent, to $114.09 after surpassing $115 earlier. WTI underperformed its European counterpart again but rose by $0.12, or 0.13 percent, to $92.99.
  
  "The North Sea, Iran and the Middle East are still factors," said Christopher Bellew, an oil broker at Jefferies Bache.
  
  
• Natural gas prices fell today to the lowest levels in almost two months, but prices attempted to hold onto a key technical support area near $2.75/mmbtu. Gas was last trading down by $0.01, or 0.51 percent, to $2.76 after reaching as low as $2.72.
  
  The latest weather forecasts indicate cooler-than-normal temperatures will spread across the United States over the next week or two, which should reduce demand for power generation, and in turn, natural gas.
  
  
• Corn was back below $8/bushel today after briefly hitting a record near $8.44/bushel on Friday. The grain was last trading down by $0.12, or 1.47 percent, to $7.88, while soybeans fell by $0.38, or 2.19 percent, to $16.72 and wheat fell by $0.20, or 2.29 percent, to $8.65.
  
  "It is a little bit of profit-taking today and we are seeing a bit of a buy the rumor and sell the fact scenario," said Luke Mathews, a commodities strategist at the Commonwealth Bank of Australia. "The fundamental picture is very bullish as the U.S. and global corn supplies are critically tight."
  
  
• Copper was last trading down by $0.04, or 1.22 percent, to $3.35/lb on Comex, as last week's disappointing China data continued to weigh on the industrial metal.
  
  "There seems to be a general tone of weakness across a number of markets due to some weaker economic data, in particular the disappointing Chinese data," said Gayle Berry, an analyst at Barclays Capital.
  
  "There is an underlying expectation that we will see some sort of policy response. Until the market sees this is going to happen or until we get something better on the news front, this kind of weaker tone looks like it's going to stay with the metals in the short term," she added.