Written by Sumit Roy  |

September 21, 2012

Morning Call: Gold Nears Highest Level Since February As Dollar Declines, Oil Continues To Rebound

Details

Commodities are up across the board.

Commodities are on the rebound, as bargain hunters step in to buy after the modest sell-off earlier this week. News flow is extremely light, with no major macroeconomic data scheduled for release today.

The U.S. Dollar Index was last trading down 0.18 percent to 79.27.

• Gold and silver are near the highest levels since February. The yellow metal was last trading up by $10, or 0.57 percent, to $1778.60, while the gray metal added $0.19, or 0.56 percent, to $34.87.
  
  Platinum gained $13.75, or 0.84 percent, to $1641.75 and palladium rose by $8.75, or 1.32 percent, to $671.25.
  
  "Gold is one of the commodities that will benefit most from quantitative easing," said Kamal Naqvi, head of commodities sales in Europe, Middle East and Africa for Credit Suisse Group. "Everyone is talking about gold at $2,000 an ounce and I still think we'll get to at least that."
  Gold Bulls Extend Streak as Prices Jump on Stimulus
  
  
• Crude oil continues to recover from the downturn earlier this week, as some traders speculate that the sell-off was overdone. Brent was last trading up by $1.23, or 1.12 percent, to $111.26, while WTI jumped $1.65, or 1.8 percent, to $93.52.
  
  "Oil is caught between the pull of excess supply over the next few months, and the push of quantitative easing and hopes for an improvement in growth from the various stimulative programs," said Guy Wolf, strategist at commodities broker Marex Spectron Group. "We think it is likely to remain volatile for a while longer."
  Oil Trims Biggest Drop Since June as Losses Considered Excessive
  
  
• Natural gas was last trading up by $0.05, or 1.61 percent, to $2.84/mmbtu.
  
  "A little bit of a rebound isn't unreasonable," said Kyle Cooper, managing partner of IAF Advisors. "We're going to continue to whittle down the [inventory] surplus."
  Is The Coal Carnage Complete?
  
  
• Grains are higher, as corn adds $0.03, or 0.4 percent, to $7.49/bushel, while soybeans gains $0.04, or 0.22 percent, to $16.22 and wheat rises by $0.11, or 1.19 percent, to $8.90.
  
  "I think the market is going to be reluctant to push prices anywhere near the highs that they reached in recent weeks as we are in the middle of the harvest and yield reports coming out are positive," said Victor Thianpiriya, agricultural strategist at ANZ bank.
  Soybeans face biggest weekly decline in a year
  
  
• Copper was last trading up by $0.04, or 0.93 percent, to $3.81/lb on Comex.
  
  "The physical markets and the fundamentals really don't necessarily justify the rally, so the market's having second thoughts," said analyst Leon Westgate of Standard Bank. "The rather volatile, generally sideways trading we've seen is reflective of that—as the market digests QE versus the still lackluster economic backdrop."
  Copper steadies on stimulus optimism, doubts on rally
  
  
  

What to Watch For:

1:00 p.m. ET: Baker Hughes Rig Count