Written by Sumit Roy  |

August 16, 2012

Market Wrap: Gold Jumps To $1616 As Stocks Hit 4-1/2 Month Highs, Brent Tops $117 On Strong Housing Data

Details

Most commodities rose.

Commodities rose broadly today after better-than-expected economic data in the United States fueled bullish bets. Stocks rose to 4 ½-month highs as the S&P 500 surged past 1415.

Housing starts slipped by 1.1 percent to 746K in July, but building permits—which are seen as more forward-looking indicator—jumped 6.8 percent to 812K units, the highest level in four years.

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 12 basis points to 6.52 percent.

The U.S. Dollar Index fell by 0.38 percent to 82.34.

• Gold was last trading up by $13, or 0.81 percent, to $1616.10, while silver edged up by $0.40, or 1.43 percent, to $28.23.
  
  Platinum gained $45, or 3.23 percent, to $1440.25 and palladium added $8.75, or 1.52 percent, to $584.75.
  
  "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."
  
  
• Crude oil rallied to fresh 3 ½-month highs, as the commodity benefitted from today's braod-based buying. Brent was last trading up by $0.78, or 0.67 percent, to $117.03, while WTI rose by $1.32, or 1.4 percent, to $95.65.
  
  "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]."
  
  
• Natural gas fell today after the EIA reported that operators injected 20 billion cubic feet into storage last week, near the lower end of analyst estimates which were calling for a build between 20 and 26 bcf.
  
  Forecasts for cooler-than-normal temperatures across the United States over the next two-week period kept a lid on the fuel. Prices were last trading down by $0.03, or 0.98 percent, to $2.72/mmbtu.
  
  
• The grain complex was mixed, as corn rose by $0.05, or 0.57 percent, to $7.99/bushel, while soybeans shed $0.02, or 0.12 percent, to $16.58 and wheat jumped $0.19, or 2.18 percent, to $8.65.
  
  
• Copper was last trading up by $0.03, or 0.99 percent, to $3.38/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.