Written by Sumit Roy  |

August 30, 2012

Market Wrap: Gold Slips Ahead Of Bernanke Speech, NatGas Rallies After Inventory Report

Details

Gold and WTI fell, while natural gas and grains rose.

Commodities put in a mixed performance in the last trading session before Ben Bernanke's highly anticipated speech in Jackson Hole, Wyo. The Fed Chairman's remarks, scheduled for 10 a.m. ET on Friday, will be closely scrutinized for clues on the future course of U.S. monetary policy.

In today's economic news, personal income in July rose by 0.3 percent, matching expectations, while personal spending jumped 0.4 percent, slightly below the anticipated 0.5 percent.

The number of people filing for unemployment benefits in the U.S. was unchanged last week at 374K.

Meanwhile, ICSC said that chain-store sales, excluding drug stores, rose by 6 percent in August.

In Europe, Spanish 10-year bond yields—currently seen as the best gauge of eurozone sovereign debt fears—rose by 13 basis points to 6.59 percent.

The U.S. Dollar Index rose by 0.18 percent to 81.69.

• Precious metals fell, as traders positioned themselves ahead of Bernanke's speech. Gold was last trading down by $1.57, or 0.09 percent, to $1654.93, while silver edged down by $0.33, or 1.06 percent, to $30.42.
  
  Platinum lost $9.50, or 0.63 percent, to $1507.75 and palladium retreated $14.75, or 2.33 percent, to $617.50.
  
  "On gold we are very much into a wait-and-see approach," Saxo Bank analyst Ole Hansen told Reuters. "[There was] a bit of profit taking yesterday, but considering the move higher last week it is holding up very well, with investors reluctant to let go."
  
  "As long [as] we can hold $1,630 support on any pull-back, the technical outlook looks pretty good," he added. "We think the most likely outcome tomorrow will be an extension of the very low interest rates until 2015."
  
  
• Crude oil was mixed today, as Brent rose by $0.12, or 0.11 percent, to $112.66, while WTI shed $0.89, or 0.93 percent, to $94.60.
  
  "Isaac doesn't seem as if it [inflicted] any serious damage to oil production in the Gulf, and everybody is waiting for Jackson Hole, which I think will be a non-event," said Michael Poulsen, an analyst at Global Risk Management.
  
  
• Natural gas rallied after the expiration of the September futures contract. The new front-month contract—gas for October delivery—was last trading up by $0.07, or 2.6 percent, to $2.75/mmbtu.
  
  In its Weekly Storage Report, the EIA said that operators injected 66 billion cubic feet into storage last week, slightly above the 60 to 64 bcf that most analysts were expecting.
  
  
• Grains rose modestly today. Corn was last trading up by $0.03, or 0.37 percent, to $8.13/bushel, while soybeans edged up by $0.06, or 0.33 percent, to $17.69 and wheat advanced $0.03 or 0.31 percent, to $8.88.
  
  "There has been some underlying support for wheat in the last few days amid a tender from Saudi Arabia, while the recent acquisition of wheat from Tunisia has buoyed the expectation of continued demand from North African countries," Graydon Chong, senior analyst at Rabobank, said.
  
  
• Copper was last trading up fractionally to $3.44/lb on Comex.
  
  "Copper prices started turning around after the meeting between [Chinese Premier] Wen and [German Chancellor] Merkel. Investors feel reassured," said a Shanghai-based trader.