Written by Sumit Roy  |

August 15, 2012

Market Wrap: Gold Rises On Reports Of Buying By Soros & Paulson, Oil Spikes After Inventories, NatGas Sinks

Details

Gold and oil rose, while natural gas and copper fell.

Commodities were mixed again today, but sentiment in financial markets was positive after better-than-expected economic data in the U.S. was released. Industrial production in the world's largest economy grew by 0.6 percent in July, besting the 0.5 percent increase that was anticipated.

Meanwhile, 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.

In Europe, Spanish 10-year bond yields—currently seen as the best gauge of eurozone sovereign debt fears—fell by 9 basis points to 6.64 percent.

The U.S. Dollar Index rose by 0.23 percent to 82.68.

• Gold rose today amid news that 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 Arca: 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 up by $5.55, or 0.35 percent, to $1604.60/oz, while silver edged up by $0.06, or 0.22 percent, to $27.88.
  
  Platinum fell by $3, or 0.21 percent, to $1395.25 and palladium edged down by $2, or 0.35 percent, to $576.
  
  
• Crude oil prices surged to three-month highs after the latest inventory figures from the EIA. U.S. crude oil inventories decreased by 3.7 million barrels, gasoline inventories decreased by 2.4 million barrels, distillate inventories increased by 0.7 million barrels and total petroleum inventories decreased by 4.6 million barrels last week.
  
  Brent was last trading up by $2.08, or 1.82 percent, to $116.11, while WTI rose by $0.79, or 0.83 percent, to $94.21.
  
  
• Natural gas gave back most of the prior session's technical driven rally. The $2.75/mmbtu level continued to offer strong support, but forecasts for cooler-than-normal temperatures across the United States are keeping upside capped.
  
  Natgas was last trading down by $0.08, or 2.82 percent, to $2.75.
  
  
• Grains all rose today. Corn was last trading up by $0.13, or 1.64 percent, to $7.93/bushel, while soybeans rose by $0.33, or 2 percent, to $16.56 and wheat rose by $0.09, or 1.01 percent, to $8.48.
  
  "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."
  
  
• Copper was last trading down by $0.01, or 0.37 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.