Written by Sumit Roy  |

October 03, 2012

Morning Call: Gold Trades Near $1780 After Solid ADP Jobs Report; Oil, NatGas, Copper Fall

Details

Precious metals rise, while other commodities sink.

With the exception of precious metals, most commodities are lower today despite a better-than-expected employment report from ADP. The payroll processor said that U.S. private sector employers added 162K jobs in September, besting the 140K that was expected. The official government figures will be released on Friday.

The U.S. Dollar Index was last trading up by 0.11 percent to 79.83.

• Gold was last trading up by $4.20, or 0.24 percent, to $1778.90, while silver added $0.11, or 0.33 percent, to $34.73. Platinum gained $7.75, or 0.46 percent, to $1685.25 and palladium edged down by $1, or 0.15 percent, to $652.50.
  
  "The real challenges will again drive the market," said Jeremy Friesen, a commodity strategist at Societe Generale.
  
  "We are going through a bit of a consolidation period until we see what happens. My suspicion is that we'll get more monetary policy responses from other central banks as the Fed program kicks off and the ECB program starts, probably by the end of this month. That's bullish for commodities like gold."
  Gold holds near 11-month high on Spain caution
  
  
• Crude oil is weak ahead of the EIA's Weekly Petroleum Status report. The less-authoritative API data showed that crude inventories rose by 0.5 mmbbl, gasoline inventories fell by 0.1 mmbbl, and distillate inventories fell by 0.3 mmbbl last week.
  
  Brent was last trading down by $1.39, or 1.25 percent, to $110.18, while WTI shed $0.95, or 1.03 percent, to $90.94.
  
  "Demand is increasing slightly, slowly, whereas supply is increasing a little bit faster," said Andy Sommer, a senior oil analyst at Axpo Trading. "I don't see big potential to the upside for oil. Of course there's always risk from the political side, but from a fundamental point of view there's more downward pressure."
  Oil Falls to Four-Day Low as U.S. Supply Increases, China Slows
  
  
• Natural gas was last trading down by $0.08, or 2.15 percent, to $3.46/mmbtu, as traders take profits after six straight sessions of gains. However, downside may be limited by weather forecasts that continue to call for cooler-than-normal temperatures for October.
  Natural gas boom in US. Is Russia the big loser?
  
  
• The grain complex is lower, as corn sheds $0.05, or 0.63 percent, to $7.54/bushel, while soybeans loses $0.07, or 0.46 percent, to $15.24 and wheat falls by $0.07, or 0.8 percent, to $8.65.
  US soy falls for third day on higher output forecasts
  
  
• Copper was last trading down by $0.02, or 0.62 percent, to $3.78/lb on Comex.
  
  "We seem to go from QE3-related euphoria to reality-related depression. It's obviously too quick, but we haven't yet seen any real fundamental follow through to support the rally that was prompted by QE3," said analyst David Wilson of Citigroup.
  Copper breaks 4 days of gains on Europe, China gloom
  
  
  

What to Watch For:

8:15 a.m. ET: ADP Employment Change (September)

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