Written by Sumit Roy  |

October 17, 2012

Morning Call: WTI Rises As US Housing Starts Surge To 4-Year High, Gold & Silver Trade Mixed, Copper Steadies

Details

Commodities trade mixed.

Commodities are narrowly mixed, but stocks are higher for a third-straight session after the release of extremely strong figures on the U.S. housing market. Housing starts in the month of September jumped by 15 percent to 872K. That's well above the 770K that was expected and the highest level in over four years.

Building permits surged 11.6 percent to 894K, also above the 810K that was anticipated and the best level in over four years.

The U.S. Dollar Index was last trading down by 0.54 percent to 78.97.

• Precious metals are mixed today. Gold was last trading down by $0.55, or 0.03 percent, to $1747.05, while silver added $0.05, or 0.16 percent, to $33.00.
  
  Platinum gained $14.25, or 0.87 percent, to $1657.50 and palladium edged up by $5.05, or 0.79 percent, to $644.55.
  
  "The overall attitude towards the yellow metal remains positive looking out over the months ahead, but hesitancy to express that view in the near term is becoming an obstacle. It feels like gold needs a healthy clean-out at this juncture," UBS analyst Edel Tully said in a note to clients. 
  "A further correction from here would ultimately be beneficial though, given the sharp run-up in prices since mid-October, the repeated failure to breach $1,800 and the degree of speculative length." 
  Gold firms with euro as Moody's affirms Spain rating
  
  
• Crude oil is mixed ahead of the EIA's Weekly Petroleum Status report. The less-authoritative API report showed that crude inventories rose by 3.7 mmbbl, gasoline inventories fell by 1.2 mmbbl, and distillate inventories rose by 1.8 mmbbl last week.
  
  Brent was last trading down by $0.47, or 1.34 percent, to $113.53, while WTI added $0.27, or 0.29 percent, to $92.36. That takes the spread between the two benchmarks to $21.17—down from Monday's high of $24.28.
  Oil Trades Near One-Week High on Bailout Optimism, U.S. Economy
  
  
• Natural gas is lower for a third-straight session, as traders continue to await the first cold snap of the winter heating season. Prices were last trading down by $0.02, or 0.64 percent, to $3.42/mmbtu.
  
  "The spotlight is on the mild weather forecasts for the next couple of weeks," said Brad Florer, a trader at Kottke Associates. "Fair value is somewhere right around where we are right now. We might see a bit of a tug of war."
  Natural Gas Drops as Mild U.S. Weather to Crimp Heating Demand
  
  
• The grain complex is slightly higher, as corn adds $0.02, or 0.3 percent, to $7.41/bushel, while soybeans gains $0.01, or 0.08 percent, to $14.95 and wheat rallies by $0.04, or 0.41 percent, to $8.51.
  
  "Chinese demand is still pretty much there but we are still wary of the speculative length in the market," said Victor Thianpiriya, agricultural strategist at ANZ Bank. "At the moment the pipeline is okay as there are still supplies coming with the ongoing U.S. harvest."
  US soy near 3-1/2 month low on supply prospects
  
  
• Copper was last trading up by $0.01, or 0.15 percent, to $3.71/lb on Comex.
  
  "Shanghai base metals have resisted rising... there has been a feeling of uncertainty in China ahead of GDP figures tomorrow and the 18th Communist Party Congress...,"  said one trader.
  Copper slips ahead of China data, EU summit
  
  
  

What to Watch For:

8:30 a.m. ET: Housing Starts/Building Permits (September)

10:30 a.m. ET: Weekly Petroleum Status Report