Written by Sumit Roy  |

October 01, 2012

Morning Call: Gold Hits Highest Price Of 2012, Oil Steadies As OPEC Output Tumbles, NatGas Hits 10-Month High

Details

Commodities rise.

Commodities are rising broadly after a batch of data on manufacturing around the world came in close to expectations. China's official PMI Manufacturing Index rose from 49.2 to 49.8 in September, remaining just under the 50 level that separates contraction from expansion.

The equivalent gauge in the eurozone ticked up from 46 to 46.1. The U.S. ISM Manufacturing Index will be released at 10 a.m. ET. Analysts are expecting a reading of 49.7.

The U.S. Dollar Index was last trading down by 0.12 percent to 79.84.

• The precious metals sector is surging. Gold was last trading up by $11.87, or 0.67 percent, to $1783.97 after reaching $1791.45 earlier--the highest level of the year. Silver jumped $0.32, or 0.93 percent, to $34.86 after reaching $35.36  earlier—a fresh seven-month high.
  
  Platinum edged up by $20.40, or 1.23 percent, to $1682.49 and palladium rose by $16, or 2.5 percent, to $655.
  
  "We seem to have established a base now down at $1,740 [for gold], but we also seem to have a ceiling in place between $1,785 and $1,790," Dave Govett, head of precious metals at Marex-Spectron, said.
  
  "I think it will take some help from other markets to break us one way or the other, as gold does not yet seem to have the appetite to do this by itself. That said, I still favor buying dips in the market and think that before long we will see a renewed assault on $1,800. But in the meantime, trade the ranges and watch the dollar, stocks and oil for short term direction."
  Gold dips, caution sets in over Friday jobs data
  
  
• Crude oil is mixed today. Brent was last trading down by $0.34, or 0.3 percent, to $112.05, while WTI rose by $0.21, or 0.23 percent, to $92.40.
  
  A survey by Bloomberg showed that OPEC crude production fell by 454 Kbbl/d to 31.98 mmbbl/d in September, the largest decline since March 2011.
  
  Meanwhile, analysts at Bank of America said they expect Brent to rise to $120 by the end of the year due to strong economic growth.
  Oil Declines From One-Week High as China Manufacturing Weakens
  
  
• Natural gas rose by $0.07, or 2.23 percent, to $3.39/mmbtu after touching $3.41 earlier—the highest level in 10 months. The latest weather forecasts indicate that much-cooler-than-normal temperatures will spread across the United States during the middle of the month, making for a bullish start to the winter heating season.
  US natural gas rig count posts another 13-year low
  
  
• The grain complex is mixed. Corn was last trading up by $0.07, or 0.89 percent, to $7.63/bushel, while soybeans shed $0.11, or 0.67 percent, to $15.90 and wheat fell by $0.08, or 0.89 percent, to $8.95.
  Corn extends gains as U.S. stockpiles shrink
  
  
• Copper was last trading up by $0.01, or 0.16 percent, to $3.76/lb on Comex.
  
  "On Friday, U.S. non-farm payrolls are due. This time, the release will be watched even more closely than usual as the Fed has made its quantitative easing program dependent on labor market developments. The data can thus provide guidance on how much easing one can expect," analysts at Credit Suisse said.
  Copper steadies but global growth worries cap gains
  
  
  

What to Watch For:

10:00 a.m. ET: ISM Manufacturing (September)

10:00 a.m. ET: Construction Spending (August)