Written by Sumit Roy  |

August 20, 2012

Market Wrap: Gold & Silver Jump On The Back Of Platinum Rally, Oil Falls, NatGas Gains On Weather

Details

Commodities traded mixed today.

Like last week, commodities traded narrowly mixed today amid light news flow. Rumors that the European central bank may limit sovereign borrowing costs by purchasing bonds on the open market when yields reach a certain level lent early support to markets, but no action is expected until September.

Spanish 10-year bond yields—currently seen as the best gauge of eurozone sovereign debt fears—fell by 20 basis points to 6.24 percent.

The U.S. Dollar Index fell by 0.12 percent to 82.48.

• Gold was last trading up by $6.37, or 0.39 percent, to $1621.50, while silver rose by $0.70, or 2.48 percent, to $28.77.
  
  Platinum jumped $26.86, or 1.83 percent, to $1494.99 and palladium gained $5.50, or 0.91 percent, to $608.75 amid continued labor unrest in South Africa
  
  "Any key data relevant to price, the gold market this week is likely to be driven predominantly by political factors," said analysts at Commerzbank.
  
  "For example, several rounds of talks are due to take place between Germany's Chancellor [Angela] Merkel, French President [François] Hollande, Greek Prime Minister [Antonis] Samaras and Eurogroup President [Jean-Claude] Juncker," they wrote.
  
  
• Crude oil prices fell slightly, as Brent shed $0.14, or 0.12 percent, to $113.57, while WTI lost $0.50, or 0.52 percent, to $95.51.
  
  "There are plenty of reasons why oil prices should fall," said Carsten Fritsch, oil analyst at Commerzbank. The supply outages in the North Sea, which are currently lending support to the Brent price, are merely temporary in nature."
  
  
• Natural gas got a boost from the latest weather forecasts, which suggest that warmer-than-normal temperatures could re-establish themselves across the United States after a brief cool-down.
  
  Prices were last trading up by $0.05, or 1.95 percent, to $2.77.
  
  
• Grains all rose today. Corn was last trading up by $0.17, or 2.07 percent, to $8.15/bushel, while soybeans rose by $0.06, or 0.66 percent, to $17.01 and wheat added by $0.06, or 0.66 percent, to $8.80.
  
  "It is all about demand now. Corn prices need to trade higher to ration U.S. demand," said Christopher Gadd, analyst with Macquarie Securities.
  
  
• Copper was last trading down by $0.05, or 1.32 percent, to $3.37/lb.
  
  "The focus of the market is back on Europe and China," said Standard Bank Analyst Leon Westgate. "The housing data on the surface suggests that property controls are going to continue. In Europe, we've got a week of shuttle diplomacy and a lot of talking but not much action."