Written by Sumit Roy  |

September 26, 2012

Market Wrap: Silver Recovers From Early Losses To Rise, Oil Falls, NatGas May Open Near $3.20 On Thursday

Details

Silver and natural gas rose, while other commodities fell.

Most commodities fell today, as economic concerns and a jump in the U.S. dollar pressured prices. However, silver and natural gas bucked the trend to rise. In today's news, new home sales in the U.S. were essentially flat in August at 373K—slightly below expectations.

In Greece, protests over the country's austerity policies revived eurozone sovereign debt fears. The Spanish 10-year bond yield—currently seen as the best gauge of the crisis in the region—spiked by 32 basis points to 6.06 percent.

The U.S. Dollar Index was last trading up by 0.41 percent to 79.88.

• Technical trading pushed gold lower after prices failed to make progress in recent days, but the yellow metal finished well off the day's lows. Prices were last trading down by $8, or 0.45 percent, to $1752.65, while silver reversed earlier losses to trade higher by $0.25, or 0.73 percent, to $34.01.
  
  Platinum gained $5.78, or 0.35 percent, to $1634.03 and palladium sagged $10.75, or 1.68 percent, to $628.50.
  
  "After rapidly rising between mid-August and mid-September, gold has since been consolidating," BNP Paribas Analyst Anne-Laure Tremblay said. "Short term, we could see a limited correction before the price resumes its ascent. The U.S. dollar has been strengthening of late, particularly against the euro. This is likely weighing on the gold price. Beyond this, the gold market is just taking a breather, as it is not far off the $1,800 an ounce level, which constitutes a strong resistance."
  
  
• Crude oil traded lower after the EIA's Weekly Petroleum Status Report. The agency said that crude oil inventories decreased by 2.4 million barrels, gasoline inventories decreased by 0.5 million barrels, distillate inventories decreased by 0.5 million barrels and total petroleum inventories decreased by 2.7 million barrels last week.
  
  Brent was last trading down by $1.09, or 0.99 percent, to $109.36, while WTI lost $1.90, or 2.08 percent, to $89.47.
  
  "The quantitative easing euphoria has eased," Ole Hansen, senior manager of trading advisory at Saxo Bank A/S, said. "Renewed worries, especially in Spain, are putting the focus back onto global growth and the potential for subdued demand for oil."
  
  
• Natural gas bucked the trend to rise. The October futures contract expired at the end of trading today. It was last trading up by $0.07, or 2.26 percent, to $2.99/mmbtu. The November contract will move to the front of the board on Thursday; it was last trading near $3.20.
  
  
• The grain complex was lower, as corn sunk $0.17, or 2.32 percent, to $7.27/bushel, while soybeans lost $0.17, or 2.32 percent, to $15.72 and wheat fell by $0.16, or 1.78 percent, to $8.71.
  
  "We are seeing a very negative impact on grains today from broader outside markets with crude oil down and the dollar rising," said Rabobank Analyst Erin FitzPatrick. "We are also seeing rapid harvest progress in the U.S. Although the harvest progress is not particularly bearish when you look at the firm cash markets and the overall tight supply outlook, it is currently putting overall weakness into grains futures."
  
  
• Copper was last trading down by $0.06, or 1.58 percent, to $3.71/lb on Comex.
  
  "I think it's just taking a breather after the maybe excessive price gains in the weeks before," said Daniel Briesemann, analyst at Commerzbank. I am confident that we are on a lasting upward trend," he said, citing recently announced infrastructure projects in China as support for prices. "At the moment I'm not concerned about China at all."