Written by Sumit Roy  |

October 15, 2012

Morning Call: Gold & Silver Sink On Technical Selling, Brent Rises As China Imports Rebound From 22-Month Low

Details

Commodities trade mixed.

Commodities are mixed today, but stocks are higher on the back of stronger-than-expected corporate earnings announcements and economic reports. Banking giant Citigroup reported this morning that its profits in the third quarter topped analyst estimates.

In economic news, retail sales in the U.S. rose by 1.1 percent in September, better than the 0.8 percent increase that was expected. Meanwhile, the Empire manufacturing gauge improved from -10.41 in September to -6.16 in October.

Elsewhere, China reported that its exports grew by 9.9 percent year-over-year in September, up from 2.7 percent in August and above the 5.5 percent increase that was anticipated. Imports grew by 2.4 percent year-over-year, reversing most of August's 2.6 percent decline.

China's consumer price index in September rose by 1.9 percent year-over-year, down from 2 percent in August and equal to expectations.

• Gold and silver continue to sell off today amid technical selling. The yellow metal was last trading down by $11.73, or 0.67 percent, to $1742.75, while the gray metal lost $0.38, or 1.12 percent, to $33.14.
  
  Platinum shed $11.50, or 0.7 percent, to $1640.50 and palladium edged up by $5.50, or 0.87 percent, to $640.
  
  "Investors are getting a bit nervous following the recent rejection at $1,800," Saxo Bank vice president Ole Hansen said. "Many new positions in both exchange-traded funds and futures have been established in recent weeks, especially short term leveraged investors who are not married to their positions in the same sense as long term ETF investors."
  
  "We need to hold onto the $1,737 low in order to avoid a deeper correction at this time," he said. "Either OMT in Europe or a weaker dollar seem to be what we are lacking at the moment, so we could see investors... take some chips off the table while they wait for a better level to re-enter."
  Gold slips as buyers await clarity over Spain
  
  
• Crude oil is mixed, as Brent rises by $0.41, or 0.36 percent, to $115.03, while WTI edges down by $0.03, or 0.03 percent, to $91.83.
  
  China's crude oil imports totaled 4.9 mmbbl/d in September, up from August's 22-month low of 4.3 mmbbl/d.
  
  However, "crude imports still remain well below the level seen in the first half of the year, when between 5.3 and 6 million barrels per day were imported," said analysts at Commerzbank.
  Oil futures rise on weak dollar, Syria tensions
  
  
• Natural gas is lower today, as traders await the first cold snap of the heating season—which remains elusive. Prices were last trading down by $0.06, or 1.55 percent, to $3.56/mmbtu.
  Natural gas eyed as fuel for trains
  
  
• The grain complex is lower today, led by soybeans, which is at the lowest level in 3 1/2 month.
  
  "It appears that the seasonality continues to be a significant headwind, particularly in the oilseed market," said Luke Mathews, commodities strategist at the Commonwealth Bank of Australia.
  
  Corn was last trading down by $0.09, or 1.2 percent, to $7.43/bushel, while soybeans shed $0.26, or 1.67 percent, to $14.97 and wheat lost $0.05, or 0.53 percent, to $8.52.
  US soy drops to 3-1/2 month low, corn eases for 2nd day
  
  
• Copper was last trading down by $0.01, or 0.14 percent, to $3.69/lb on Comex.
  
  "Copper trading is range bound at the moments as in the short term the situation is still uncertain and investors are waiting for the Chinese GDP data and for news from LME week," T-commodity consultant Gianclaudio Torlizzi said.
  
  "But in a long-term perspective, I think the price is more interesting as if on one hand it's true that copper stocks are high, on the other hand we expect China to soon implement stimulus policies which should boost the economy and metals demand."
  Copper steady as short term outlook cloudy
  
  
  

What to Watch For:

8:30 a.m. ET: Empire Manufacturing (October)

8:30 a.m. ET: Retail Sales (September)