Written by Sumit Roy  |

October 10, 2012

Morning Call: Gold, Oil, Copper Steady After Alcoa Kicks Off Earnings Season

Details

Commodities trade mixed.

Commodities are narrowly mixed today after aluminum giant Alcoa kicked off the third-quarter earnings season after the bell on Tuesday. The company beat analyst estimates for profit and revenues, but cut its global aluminum demand growth forecast from 7 percent to 6 percent.

"We do see a slight slowdown in some regions in end-markets, and the main driver for this is China," Chief Executive Officer Klaus Kleinfeld said.

The U.S. Dollar Index was last trading down by 0.05 percent to 79.92.

• Gold and silver are little changed for a second day. The yellow metal was last trading up by $2.55, or 0.14 percent, to $1766.85, while silver added $0.07, or 0.2 percent, to $33.98.
  
  Platinum fell $17.51, or 1.04 percent, to $1670.49 and palladium dropped $5, or 0.76 percent, to $652.50.
  
  "With the market stumbling in sight of $1,800 an ounce, we believe that the path of least resistance is lower, at least in the near term," HSBC analysts said.
  
  "We do not anticipate further significant buying of gold based on monetary-policy accommodation alone. In this light, the bullion market price could drop to $1,750 an ounce or lower in the near term," they added.
  Gold inches up tentatively after 3-day loss streak
  
  
• Crude oil is essentially flat after surging on Tuesday. Brent was last trading up by $0.01, or 0.01 percent, to $114.51, while WTI added $0.05, or 0.05 percent, to $92.44.
  
  The EIA's Weekly Petroleum Status Report will be released on Thursday instead of its usual time today due to the closure of U.S. government offices on Monday.
  
  "The nuclear dispute with Iran is going to be an election issue in Israel, and this might cause the price to rise in coming weeks, or at least support it," said Carsten Fritsch, oil analyst at Commerzbank. "Other factors are playing a hand in this, such as the tensions between Turkey and Syria."
  Oil holds above $114 on Middle East supply worries
  
  
• Natural gas was last trading up by $0.02, or 0.46 percent, to $3.48/mmbtu—close to the highest levels of the year—as traders brace themselves for the start of the peak-demand winter heating season.
  
  The EIA is expected to report an 80 billion cubic feet injection into storage for last week in its Thursday inventory report, according to a survey of analysts by Bloomberg.
  U.S. Natural Gas Gains: Cold Snap Helps Cut Surplus
  
  
• The grain complex is narrowly mixed ahead of the USDA's supply and demand data scheduled for release on Thursday. Corn was last trading down by $0.01, or 0.1 percent, to $7.41/bushel, while soybeans sheds $0.05, or 0.37 percent, to $15.46 and wheat rises by $0.04, or 0.43 percent, to $8.68.
  Grains trade quietly midweek
  
  
• Copper was last trading down fractionally to $3.71/lb on Comex.
  
  "Copper demand is surprisingly low this year and I expect copper to move sideways in the short term but there will likely be a jump in China's copper imports at the beginning of the next year, before new projects and stimulus measures are approved by the new government," said Eugen Weinberg, a commodity analyst at Commerzbank.
  
  "I believe that China will come back next year and many will be surprised to see how much it will drive demand for all metals due to new economic measures and infrastructure plans," he added.
  Copper down on weak China demand, aluminum to one-month low
  
  

What to Watch For:

2:00 p.m. ET: Fed's Beige Book

4:30 p.m. ET: API Statistical Summary