Written by Sumit Roy  |

October 24, 2012

Market Wrap: Gold & Silver Steady After FOMC Policy Meeting, Oil Falls, Wheat Rises On Ukraine Export Ban

Details

Commodities traded mixed.

Commodities traded mixed after today's Federal Open Market Committee's policy meeting ended quietly. The central bank maintained the size of its quantitative easing program at $40 billion per month, as expected.

In other news, Markit reported that its Composite Purchasing Managers Index for the eurozone fell from 46.1 to 45.8 in October, the lowest level since June 2009.

News in China and the U.S. was a little more upbeat. HSBC said that its PMI manufacturing gauge for China rose from 47.9 to 49.1 in October, the best level in three months. Meanwhile, new home sales in the U.S. rose by 5.7 percent to 389K in October, the highest level since April 2010.

Taking a look at currency markets, the U.S. Dollar Index edged down by 0.02 percent to 79.96.

• Gold and silver were narrowly mixed, remaining near six-week lows. The yellow metal was last trading down by $3.95, or 0.23 percent, to $1703.70, while the gray metal added $0.11, or 0.34 percent, to $31.80.
  
  Platinum fell by $6.50, or 0.41 percent, to $1565.25 and palladium edged down by $1.50, or 0.25 percent, to $595.25.
  
  "The next level of support after [$1700] is $1,660 an ounce, which coincides with gold prices before Fed Chairmen Ben Bernanke's speech on economic policy at a Jackson Hole, Wyoming, summit on 31 August," analysts at HSBC said. "We continue to see modest pressure on gold prices in the near term, barring any surprise announcements by the FOMC for additional monetary-easing policies."
  
  
• Crude oil was lower after the EIA's Weekly Petroleum Status report showed that U.S. crude oil inventories increased by 2.9 million barrels, gasoline inventories increased by 1.7 million barrels, distillate inventories decreased by 2.2 million barrels and total petroleum inventories decreased by 2.7 million barrels last week.
  
  Brent was last trading down by $0.43, or 0.4 percent, to $107.82, while WTI fell by $0.94, or 1.08 percent, to $85.73.
  
  
• Natural gas was last trading down by $0.08, or 2.23 percent, to $3.46/mmbtu, as prices continued to trade choppily ahead of the winter heating season. Weather forecasts project colder-than-normal temperatures across the United States at the end of the month.
  
  
• The grain complex was mixed, as corn fell by $0.03, or 0.33 percent, to $7.54/bushel, while soybeans advanced by $0.14, or 0.87 percent, to $15.67 and wheat gained $0.14, or 1.61 percent, to $8.83.
  
  After weeks of speculation, Ukraine announced it would be banning exports of wheat starting Nov. 15.
  
  "The Ukrainian export ban is supportive for wheat but it had been widely expected and priced into the market so the price impact is relatively modest," said Rabobank analyst Erin FitzPatrick. "But the decision will reduce the possibility that more Black Sea region wheat will come into the export sector for the rest of this marketing year."
  
  
• Copper was last trading up by $0.01, or 0.18 percent, to $3.58/lb on Comex.
  
  "I don't think one should expect too much from China in terms of a pick-up given the government is in transition. Also post LME Week most people are neutral towards metals," said Societe Generale analyst Robin Bhar. "The negative news is priced in but, equally, until economies start to move higher, we're not going to challenge the upside."