Written by Sumit Roy  |

August 15, 2012

Morning Call: Gold Trades Near $1600 As Billionaires Soros And Paulson Add To Holdings, NatGas Falls

Details

Commodities fluctuate on either side of the unchanged mark.

Commodities are narrowly mixed again today, as traders await fresh catalysts to send prices meaningfully in either direction. In economic data, the U.S. consumer price index grew by 1.4 percent year-over-year in July, down from June's 1.7 percent rate.

The core CPI (excluding food and energy) grew by 2.1 percent in the month, down from 2.2 percent. Relatively tame inflation rates may give the Federal Reserve more confidence to ease monetary policy further in the coming months.

Meanwhile, in Europe, Spanish 10-year bond yields—currently seen as the best gauge of eurozone sovereign debt fears—fell by 7 basis points to 6.67 percent.

The U.S. Dollar Index rose by 0.31 percent to 82.74.

• Today's rally in the U.S. dollar is capping gold prices near the $1600/oz mark. However, some notable investors are betting on more upside for the yellow metal. Billionaire George Soros' company doubled its stake in the SPDR Gold Trust (NYSE ArcaL GLD) in the second quarter to 884,000 shares. Fellow billionaire John Paulson increased his holdings by a quarter to 21.8 million shares.
  
  Gold was last trading down by $0.50, or 0.03 percent, to $1595.55/oz, while silver shed $0.06, or 0.18 percent, to $27.77.
  
  Platinum fell by $1.51, or 0.11 percent, to $1396.74 and palladium edged down by $2.50, or 0.43 percent, to $575.50.
  Paulson, Soros Add Gold as Price Declines Most Since 2008
  
  
• Crude oil prices are slightly lower ahead of the EIA's Weekly Petroleum Status report. Brent was last trading down by $0.14, or 0.12 percent, to $113.89, while WTI fell by $0.32, or 0.34 percent, to $93.11.
  
  The less authoritative API report showed that crude inventories rose by 2.8 mmbbl, gasoline inventories fell by 2 mmbbl, and distillate inventories rose by 1.2 mmbl last week.
  Brent oil dips below $114 as supply fears ease
  
  
• Natural gas is drifting lower today after surging in the prior session amid technical buying. The $2.75/mmbtu level has offered strong support, but forecasts for cooler-than-normal temperatures across the United States are keeping upside capped.
  
  Natgas was last trading down by $0.04, or 1.48 percent, to $2.79.
  The US Natural-Gas Boom Will Transform the World
  
  
• Grains continue to consolidate today. Corn was last trading unchanged at $7.80/bushel, while soybeans rose by $0.09, or 0.55 percent, to $16.32 and wheat rose by $0.01, or 0.09 percent, to $8.41.
  
  "There has been a selloff in the wheat market so a mild recovery today wouldn't be surprising but Chicago wheat is still 60 to 80 cents too expensive with every measure you look at," one analyst told Reuters. "We will see some speculative length come out of Chicago wheat."
  Wheat rises after biggest 3-day loss in 13 months
  
  
• Copper was last trading down by $0.01, or 0.22 percent, to $3.35/lb on Comex.
  
  "Sentiment is still pretty negative towards the growth outlook and markets now are waiting to see whether we do get some sort of policy response and if so what form that takes and what the implications could be for metals demand," said Gayle Berry, an analyst at Barclays Capital.
  Copper off on growth worries, China stimulus hopes cap falls
  
  
  

What to Watch For:

8:30 a.m. ET: Consumer Price Index (July)

9:15 a.m. ET: Industrial Production (July)

10:30 a.m. ET: Weekly Petroleum Status Report