Written by Sumit Roy  |

August 16, 2012

Morning Call: Gold Hits $1605 After Strong US Housing Data, NatGas Rises Ahead Of Inventory Report

Details

Commodities are slightly to the upside.

Commodities are edging higher today after building permits in the U.S. jumped 6.8 percent in July to 812K units, the highest level in four years. Housing starts slipped by 1.1 percent to 746K.

In other economic data, the number of people filing for unemployment benefits was little changed at 366K last week.

Across the Atlantic in Europe, Spanish 10-year bond yields—currently seen as the best gauge of eurozone sovereign debt fears—fell by 7 basis points to 6.58 percent.

The U.S. Dollar Index rose by 0.1 percent to 82.73.

• Gold was last trading up by $2, or 0.12 percent, to $1605.10, while silver edged up by $0.03, or 0.12 percent, to $27.86.
  
  Platinum gained $2.11, or 0.15 percent, to $1397.36 and palladium added $4.25, or 0.74 percent, to $580.25.
  
  "A downward surprise in U.S. inflation numbers [on Wednesday] is spurring hopes for more monetary stimulus, which would be positive for gold," said analysts at Credit Suisse. "Nevertheless, investment interest remains thin and technical momentum is only neutral. As a result, we think gold could recover slightly but will probably remain caught in the familiar $1,530-1,640 trading range."
  Gold holds above $1600 as stimulus hopes persist
  
  
• Crude oil is little changed near 3 ½-month highs, as the commodity takes a breather after recent gains. Brent was last trading down by $0.03, or 0.03 percent, to $116.22, while WTI rose by $0.14, or 0.15 percent, to $94.47.
  
  "We were focusing on the north of Syria with our concern that the next supply disruption will be in the Bay of Iskenderun rather than in the Strait of Hormuz," Olivier Jakob, managing director at Petromatrix, said. "Yesterday, oil markets priced a higher risk premium for Syria but for developments to the South [Lebanon] rather than to the North [Turkey]."
  Oil Gains as Supplies Decline More Than Expected
  
  
• Natural gas continues to hover near the $2.75/mmbtu mark, as bulls hope for a change in weather patterns to send prices higher again. The latest forecasts still indicate cooler-than-normal temperatures will dominate the United States over the next two-week period.
  
  Today's Weekly Storage Report from the EIA may show that operators injected 22 to 26 billion cubic feet into storage last week, according to a survey of analysts by Platts.
  
  Gas was last trading up by $0.02, or 0.58 percent, to $2.77.
  Ahead of the Bell: natural gas supplies
  
  
• The grain complex is up today, as corn rises by $0.03, or 0.41 percent, to $7.97/bushel, while soybeans advances $0.07, or 0.39 percent, to $16.66 and wheat jumps $0.17, or 2.04 percent, to $8.64.
  Light rains give some relief to drought-stricken US corn, soy
  
  
• Copper was last trading up by $0.01, or 0.19 percent, to $3.36/lb on Comex.
  
  "Mixed data has left the [base metals] market nonplussed, and [it] will likely now sit tight and wait for signs of China stimulus," said analysts at ANZ.
  Copper rises on growth hopes, dollar caps gains
  
  
  

What to Watch For:

8:30 a.m. ET: Initial Jobless Claims

8:30 a.m. ET: Housing Starts/Building Permits (July)

10:30 a.m. ET: Weekly Natural Gas Storage Report