Written by Sumit Roy  |

October 26, 2012

Morning Call: Oil, Copper Edge Higher After US Economy Expands At Faster Rate In 3Q, Gold Rises

Details

Commodities trade narrowly mixed.

Commodities rebounded from their worst levels to trade narrowly mixed thanks to a better-than-expected reading on U.S. economic growth. The world's largest economy grew by 2 percent annualized in the third quarter, faster than the anticipated 1.8 percent and up from 1.3 percent in the second quarter.

Core personal consumption expenditures—a measure of inflation—rose by 1.3 percent, down from 1.7 percent in the previous quarter.

In currency markets, the U.S. Dollar Index was last trading up by 0.17 percent to 80.18.

• Gold and silver are up slightly. The yellow metal was last trading higher by $4.08, or 0.24 percent, to $1716.18, while the gray metal rose by $0.06, or 0.18 percent, to $32.20.
  
  Platinum fell by $14.13, or 0.9 percent, to $1551.37 and palladium edged down by $5, or 0.83 percent, to $600.
  
  "We've seen recently a run of good U.S. data," Standard Chartered Analyst Daniel Smith said. "The risks are to the upside in the gold price. If you have an increase in risk appetite, you would have most metals moving up together, gold included."
  Gold Heads For Third Straight Week Of Decline
  
  
• Crude oil is slightly higher, as Brent adds $0.11, or 0.1 percent, to $108.60, while WTI gains $0.02, or 0.02 percent, to $86.07.
  
  "The financial markets are clearly the dominant force at the moment rather than supply-side risks, of which there are still many," said Carsten Fritsch, analyst at Commerzbank.
  Oil Heads For Second Weekly Drop
  
  
• Natural gas was last trading down by $0.04, or 1.25 percent, to $3.39/mmbtu, as prices test the bottom end of their $3.35 to $3.65 range.
  
  "The short story is that we're not running out of gas," said Tim Evans, energy analyst at Citi Futures Perspective. "We're within 9 billion cubic feet of an all-time high storage level."
  Cold Start To November Will Help Natural Gas Break Out Of Range
  
  
• The grain complex is narrowly mixed. Corn was last trading down by $0.01, or 0.07 percent, to $7.42/bushel, while soybeans fell by $0.04, or 0.27 percent, to $15.60 and wheat added $0.02, or 0.17 percent, to $8.74.
  
  "U.S. soybean exports were pretty low and you are looking at a big rebound in South American supplies," said Brett Cooper, senior markets manager at FCStone Australia.
  Soy, Corn Stay Weak On Exports, Macro Worries
  
  
• Copper was last trading up by $0.01, or 0.28 percent, to $3.56/lb on Comex.
  
  "Downstream copper buyers in China are taking a wait-and-see attitude to restocking, as they are undecided about copper's outlook over the next few months," said a Shanghai-based physical trader.
  Copper Steady On Growth, Demand Fears
  
  

What to Watch For:

8:30 a.m. ET: U.S. Gross Domestic Product (3Q)

1:00 p.m. ET: Baker Hughes Rig Count