Written by Sumit Roy  |

September 05, 2012

Morning Call: Gold ($1691), Oil Fall Ahead Of Key ECB Policy Meeting; Soybeans Edges Down From Record

Details

It's quiet in commodity markets today.

Commodities are narrowly mixed today, one day ahead of the ECB's policy meeting, in which the central bank is expected to announce a resumption of its bond-buying program.

Ahead of that decision, Spanish 10-year bond yields—currently seen as the best gauge of eurozone sovereign debt fears—fell by 3 basis points to 6.54 percent.

On Friday, the Bureau of Labor Statistics will release the latest U.S. nonfarm payrolls report, which may be a crucial variable that influences whether the Federal Reserve announces new monetary stimulus measures at its next policy meeting on Sept. 13.

The U.S. Dollar Index was last trading at 81.27, a loss of 0.05 percent on the session.

• Gold and silver are lower today, as traders take profits after the recent rally. The yellow metal was last trading down by $4.95, or 0.29 percent, to $1690.80, while the gray metal shed $0.10, or 0.32 percent, to $32.24.
  
  Platinum fell by $7, or 0.45 percent, to $1562.75 and palladium edged down by $0.75, or 0.12 percent, to $640.50.
  
  "The market is confident something will come from the Fed, but it doesn't expect massive quantitative easing. The ECB will have much more of an impact because it will prevent Spanish and Italian yields from going very high," Jesper Dannesboe, senior commodity strategist at Societe Generale, told Reuters.
  Gold eases as euro falls; focus is on Fed, ECB
  
  
• Crude oil is modestly lower today, as Brent sheds $0.47, or 0.41 percent, to $113.71, while WTI edges down by $0.05, or 0.05 percent, to $95.25.
  
  "The somewhat disappointing ISM figure in the U.S. [from Tuesday] clouds the demand outlook," said Ric Spooner, a chief market analyst at CMC Markets. "It's showing a picture of relatively weak conditions and the possibility of softness in production output for the next few months. For oil, that comes against a background where prices have risen a long way already and there's adequate supply capacity."
  Oil Trades Near One-Week Low as U.S. Manufacturing Contracts
  
  
• Natural gas was last trading down by $0.02, or 0.63 percent, to $2.84/mmbtu.
  
  "Future gas demand in natural gas vehicles has enormous upside potential, led by private sector initiatives, with or without federal government assistance," said PIRA, an energy consulting firm.
  Natural gas usage by U.S. trucks to skyrocket
  
  
• Grains are slightly lower today after soybeans spiked to a record high on Tuesday. Corn was last trading down by $0.05, or 0.56 percent, to $8.03/bushel, while soybeans fell by $0.03, or 0.16 percent, to $17.68 and wheat lost $0.01, or 0.12 percent, to $8.65.
  
  "I think we are seeing a technical pullback today in soybeans, corn and wheat with some squaring and reduction of positions before some high risk events such as the possible European Central Bank bond announcement on Thursday and the U.S. jobs reports on Friday," said Ole Hansen, head of commodity strategy at Saxo Bank.
  Wheat falls for 4th day, soy down from record
  
  
• Copper was last trading up by $0.01, or 0.14 percent, to $3.47/lb on Comex.
  
  "Most analysts I think probably have been forecasting slightly higher prices going into the fourth quarter, but now I think it's beginning to dawn that we might continue to have this sideways grind for the rest of the year," said David Wilson, analyst at Citigroup.
  Copper steady as European stimulus hopes fade
  
  

What to Watch For:

4:30 p.m. ET: API Weekly Statistical Bulletin