Written by Sumit Roy  |

October 04, 2012

Morning Call: Gold Hits New 2012 High As ECB Holds Rates At Record Low, NatGas Awaits Inventory Report

Details

Commodities are higher across the board.

Commodities are higher across the board, one day ahead of the release of the highly anticipated U.S. nonfarm payrolls report for September. In today's news, the number of people filing for unemployment benefits rose a modest 4K to 367K last week.

Friday's employment report is expected to show a net jobs gain of 115K, while the unemployment rate is expected to tick up from 8.1 to 8.2 percent.

In Europe, the ECB kept its benchmark overnight interest rate steady at a record low 0.75 percent. The central bank's president, Mario Draghi, said  he sees risks to growth biased to the downside.

The U.S. Dollar Index was last trading down by 0.32 percent to 79.71.

• Gold reached a new high for the year today. The yellow metal was last trading up by $15.60, or 0.88 percent, to $1793.60, which tops the previous high of $1791.45 set earlier this week. Meanwhile, silver added $0.47, or 1.36 percent, to $35.07.
  
  Platinum gained $15.24, or 0.9 percent, to $1702.99 and palladium rose by $13.40, or 2.05 percent, to $666.65.
  
  "Although we don't expect any further major policy announcements, all the world's central banks are in an easing mode," said Matthew Turner, analyst at Mitsubishi Corp.
  
  "Gold is well supported as new money keeps entering the market in the new quarter," added a Tokyo-based trader.
  Gold closes in on 11-month high; ECB, BoE in focus
  
  
• Crude oil prices are rebounding from Wednesday's plunge, as bargain hunters step in to buy. Brent was last trading up by $1.20, or 1.11 percent, to $109.37, while WTI gained $0.65, or 0.74 percent, to $88.79.
  
  "[The oil market] was oversold and then ratcheted up by tensions between Turkey and Syria," said Christopher Bellew, a broker at Jefferies Bache. "It was quite a steep fall, so it could go back up to levels we saw two days ago."
  Oil rises above $109 on geopolitical tensions
  
  
• Natural gas was last trading up by $0.02, or 0.71 percent, to $3.42/mmbtu ahead of the EIA's Weekly Natural Gas Storage report. Analysts are expecting the agency to report that operators injected 70 to 74 billion cubic feet into storage last week, according to a survey of analysts by Platts.
  Ahead of the Bell: Natural gas supplies
  
  
• The grain complex is joining in today's broad-based rally. Corn was last trading up by $0.07, or 0.96 percent, to $7.64/bushel, while soybeans gained $0.22, or 1.45 percent, to $15.54 and wheat advanced $0.05, or 0.6 percent, to $8.78.
  
  "The selling pressure which we have seen in past weeks is starting to ease and we are seeing more attention returning to the tight supply fundamentals in both soybeans and corn," said Rabobank analyst Erin FitzPatrick. "This is also supporting wheat. The price drops we have seen in soybeans, especially for parts of Wednesday's session, have attracted more end-user buying."
  Soybeans up again on bargain buying, lifts corn and wheat
  
  
• Copper was last trading up by $0.03, or 0.69 percent, to $3.81/lb on Comex.
  
  "[A potential bailout for Spain] removes some uncertainty in the market. It is a not a question of if but when for Spain [to ask for a bailout] and that will be seen as a huge relief for the market," said Robin Bhar, analyst at Societe Generale. But the potential upside for copper is pretty limited whilst there is uncertainty about China's growth and U.S. growth and with the euro zone in recession, and that is going to keep a lid on rallies."
  Copper rises on stronger euro; Spain, U.S. data in focus
  
  
  

What to Watch For:

8:30 a.m. ET: Initial Jobless Claims

10:00 a.m. ET: Factory Orders (August)

10:30 a.m. ET: Weekly Natural Gas Storage Report