Written by Sumit Roy  |

October 10, 2012

Market Wrap: Silver Edges Higher, Brent Hits 3-Week High, Chevron Warns On Third-Quarter Earnings

Details

Commodities traded mixed.

Commodities were mixed, as traders braced themselves for the third-quarter earnings season. Alcoa kicked things off on Tuesday after the bell. The aluminum giant beat profit and revenue expectations, but lowered its global aluminum demand growth forecast from 7 percent to 6 percent.

Meanwhile, Chevron warned today that its profit in the quarter would be substantially below that of the previous quarter due to lower refining margins, commodity prices, and output. Shares of Chevron tumbled almost 5 percent on the New York Stock Exchange.

The U.S. Dollar Index fell by 0.09 percent to 79.88.

• Gold and silver were little changed for a second day. The yellow metal was last trading down by $1.50, or 0.09 percent, to $1762.80, while silver added $0.12, or 0.35 percent, to $34.03.
  
  Platinum fell $9.75, or 0.58 percent, to $1678.25 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.
  
  
• Crude oil was mixed today after surging on Tuesday. Brent was last trading up by $0.28, or 0.24 percent, to $114.78 after reaching $115.59 earlier—a three-week high. WTI fell by $0.51, or 0.55 percent, to $91.88.
  
  The EIA's Weekly Petroleum Status report will be released on Thursday 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."
  
  
• Natural gas was last trading up by $0.03, or 0.98 percent, to $3.50/mmbtu—close to the highest levels of the year—as traders braced 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.
  
  
• The grain complex was narrowly mixed ahead of the USDA's supply and demand data scheduled for release on Thursday. Corn was last trading down by $0.05, or 0.61 percent, to $7.38/bushel, while soybeans shed $0.22, or 1.42 percent, to $15.28 and wheat rose by $0.07, or 0.75 percent, to $8.71.
  
  
• Copper was last trading up fractionally to $3.72/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.