Written by Sumit Roy  |

September 17, 2012

Market Wrap: Gold ($1760) Edges Lower, Oil Plunges On SPR Rumor, Grains Plummet Amid Harvest Pressure

Details

Commodities fell across the board.

Commodities fell across the board as traders took profits after rallying aggressively last week on the back of QE3 from the Fed. Today's economic news renewed concerns about the sluggish economy; the Empire Manufacturing index fell from -5.85 to -10.41 in September, well below the -2 that was expected.

In Europe, Spanish 10-year bond yields—currently seen as the best gauge of eurozone sovereign debt fears—rose by 19 basis points to 5.97 percent.

The U.S. Dollar Index rose by 0.23 percent to 79.03.

• Gold and silver fell after rising significantly in recent weeks. The yellow metal was last trading down by $10.83, or 0.61 percent, to $1759.57, while the gray metal fell by $0.76, or 2.19 percent, to $33.90.
  
  Platinum lost $41.75, or 2.44 percent, to $1667.25 and palladium shed $16.50, or 2.37 percent, to $680.
  
  "The market has to consolidate the gains it has made since the end of August. That has been already a significant move upwards for the various precious metals, so if we do not see $1,800 [in gold] this week, that would not be a problem as, nevertheless, the signs are that precious metals prices are moving higher," Peter Fertig, a consultant for Quantitative Commodity Research, said.
  
  
• Crude oil plunged on rumors that the Obama administration may release stocks from the Strategic Petroleum Reserve onto the market to bring down high prices. Brent was last trading down by $3.82, or 3.27 percent, to $112.84, while WTI fell $2.85, or 2.88 percent, to $96.15.
  
  "As a fig leaf, the president could cite the near 1.5 million barrels per day of disruptions to global crude oil production this year," said analysts at PFC Energy. "He could also point to the geographical mismatch between America's rising crude producing regions and those where refined products are needed, citing the need for the government to temporarily bridge the gap."
  
  
• Natural gas was last trading down by $0.07, or 2.38 percent, to $2.87/mmbtu. Prices remain range-bound between $2.60 and $3.20, with only several weeks remaining before the heating season begins.
  
  
• Grains plummeted today. Corn was last trading down by $0.23, or 2.99 percent, to $7.54/bushel, while soybeans fell by $0.686, or 3.89 percent, to $16.69 and wheat fell $0.35, or 3.8 percent, to $8.91.
  
  "The sentiment in the grain markets is generally bearish because of the harvest pressure in the United States," said Lynette Tan, investment analyst at Phillip Futures.
  
  
• Copper was last trading down by $0.07, or 1.86 percent, to $3.78/lb.
  
  "The weaker dollar has fed into stronger commodity prices, but it's more a speculative move on inflation expectations rather than any optimism on growth," said CMC Markets Senior Market Strategist Brenda Kelly said.