Written by Sumit Roy  |

August 14, 2012

Market Wrap: NatGas Surges, Gold Sinks To $1600 Amid Technical Trading; Strong Retail Sales Lift Oil

Details

Commodities traded mixed.

Commodities were mixed today, but stocks edged up to fresh three-month highs on the back of economic optimism. In the U.S., retail sales grew by 0.8 percent in July, well above the consensus estimate of 0.3 percent.

Meanwhile, data in Europe was weak, but but some traders were relieved that the figures weren't even worse. The eurozone economy contracted in the second quarter—aggregate gross domestic product in the eurozone fell by 0.2 percent quarter-over-quarter—matching expectations.

The eurozone's lynchpin, Germany, saw its economy expand by 0.3 percent, slightly better than the anticipated 0.2 percent.

Spanish 10-year bond yields—currently seen as the best gauge of eurozone sovereign debt fears—fell by 11 basis points to 6.73.

The U.S. Dollar Index rose by 0.05 percent to 82.48.

• Gold fell as technical traders sold after prices couldn't break the top end of their range. The yellow metal was last trading down by $9.90, or 0.61 percent, to $1600, while silver edged down by $0.01, or 0.04 percent, to $27.82.
  
  Platinum jumped $15, or 1.09 percent, to $1396 and palladium edged up by $5, or 0.88 percent, to $576.
  
  "Gold prices are holding up very well in the light of weak demand from the jewelry sector and from investors," Commerzbank analyst Eugen Weinberg said. "That bodes well for a price increase that we expect for the end of the third quarter and the fourth quarter."
  
  
• Crude oil was modestly higher today, as Brent gained $0.28, or 0.25 percent, to $113.88, while WTI rose by $0.72, or 0.78 percent, to $93.45.
  
  "The general positive tone in financial markets, plus supply risks and geopolitical tensions, is supporting oil," said Carsten Fritsch, an analyst at Commerzbank. "The oil price increase is dangerous because it isn't driven by demand."
  
  
• Natural gas surged by $0.10, or 3.74 percent, to $2.83/mmbtu amid technical buying after prices successfully held the support area near $2.75. However, forecasts for cooler-than-normal temperatures across the United States may keep short-term upside capped.
  
  "Given the swift reversal in recent days we could and should see markets take a breather from selling off here," said Matt Smith, an analyst at Summit Energy.
  
  
• The grain complex was mixed, as prices continued to consolidate near multimonth or record highs. Corn was last trading down by $0.02, or 0.20 percent, to $7.81/bushel, while soybeans rose by $0.49, or 2.9 percent, to $17.05 and wheat lost $0.13, or 1.6 percent, to $8.43.
  
  
• Copper rose by $0.01, or 0.13 percent, to 3.37/lb on Comex.
  
  "This morning, it's the dollar-euro. The base metals are rebounding along with other markets," said analyst Andrey Kryuchenkov of VTB Capital. "There's no indication of any spot demand. So when there's nothing else, the big players remain sidelined and try to figure out the macro outlook."