Written by Sumit Roy  |

October 22, 2012

Market Wrap: NatGas Tumbles 4%, Oil Sinks Amid Growth Concerns, Copper Hits 6-Week Low, Gold & Silver Rebound

Details

Commodities traded mixed.

Commodities traded mixed, but stocks fell amid global economic concerns. The S&P 500 touched a six-week low after Caterpillar—the heavy equipment manufacturer—cut its full-year guidance and warned that global economic growth in 2013 will remain challenged.

"We are taking a pragmatic view of 2013—we're not expecting rapid growth, and we're not predicting a global recession. At this point, we expect 2013 sales will be similar overall to 2012, but with a slightly weaker first half and a slightly better second half," Caterpillar Chairman and Chief Executive Officer Doug Oberhelman said. "While there's reason for optimism, and we're not expecting a global recession in 2013, we are prepared and stand ready to take action no matter what happens to the global economy."

Taking a look at currency markets, the U.S. Dollar Index was last trading unchanged at 79.62.

• Gold and silver rebounded slightly from last week's lows. The yellow metal was last trading up by $3.78, or 0.22 percent, to $1725.53, while the gray metal added $0.17, or 0.51 percent, to $32.25.
  
  Platinum shed $14.25, or 0.88 percent, to $1605.25 and palladium edged down by $4.80, or 0.77 percent, to $621.20.
  
  "The market is licking its wounds after the dramatic sell-off late Friday," Saxo Bank Vice President Ole Hansen said. "It goes to show that the market is in a bit of a correction mode at the moment, looking over the shoulder for the next potential buyer. It was overdue after the continuous build in speculative interest in the last couple of months and some of the [speculative interest] was given back last week."
  
  "The big question is how low can it go," he added. "I think it may have another leg down, I don't think it's out of the woods yet. It's lacking drivers, the calendar [for data] looks thin and it's difficult to see where a driver would come from."
  
  
• Crude oil was modestly lower, as Brent fell by $0.56, or 0.51 percent, to $109.58, while WTI shed $1.17, or 1.3 percent, to $88.88. In turn, the WTI-Brent spread rose to $20.70.
  
  "The biggest risk factor for the oil price is further deterioration of general market sentiment and accompanied growth in risk aversion," said analysts at Commerzbank.
  
  
• Natural gas fell by $0.15, or 4.17 percent, to $3.47/mmbtu, as traders took profits after prices failed to break the $3.65 level following several attempts. However, new weather forecasts are calling for colder-than-normal temperatures to spread across the country at the end of the month, which could spur a rebound in prices in the coming days or weeks.
  
  
• The grain complex was higher. Corn was last trading up by $0.02, or 0.26 percent, to $7.64/bushel, while soybeans added $0.10, or 0.62 percent, to $15.44 and wheat rose by $0.05, or 0.54 percent, to $8.77.
  
  "Ukrainian market is talking about [a wheat] export ban as of November 15," said Erin FitzPatrick, Rabobank analyst.
  
  
• Copper was last trading down by $0.03, or 0.71 percent, to $3.64/lb on Comex, a six-week low.
  
  "The [recent] rise in [Chinese copper] inventories was due to China's sluggish downstream demand for copper, as well as its recent high copper imports and output levels," said Great Wall Futures Analyst Li Rong.