Written by Sumit Roy  |

October 30, 2012

Morning Call: Gold & Oil Rise As US Home Prices Advance, BoJ Provides Stimulus; NatGas At 1-Year High

Details

Commodities rise broadly.

Commodities are edging higher today, as U.S. stock markets remain closed for a second session due to post-tropical cyclone Sandy, which is wreaking havoc on New York and the East Coast. Analysts estimate that the economic cost of the storm could end up being between $35 and $40 billion. However, the rebuilding effort may lead to an increase in construction spending totaling $20 billion or more.

In economic news, S&P/Case-Shiller said that its home price index rose by 0.49 percent in August, the seventh-straight monthly gain. Year-over-year, prices are up 2.03 percent, better than the anticipated 1.9 percent.

Elsewhere around the world, the Bank of Japan boosted the size of its asset purchase program by 91 trillion yen ($138 billion) at its latest policy meeting, which was close to what was expected.

Taking a look at currency markets, the U.S. Dollar Index was last trading down by 0.36 percent to 79.95.

• Gold and silver are higher. The yellow metal was last trading up by $4.75, or 0.28 percent, to $1714.10, while the gray metal rose by $0.27, or 0.86 percent, to $32.06.
  
  Platinum rallied by $13.25, or 0.86 percent, to $1549.75 and palladium edged up by $5.25, or 0.89 percent, to $596.75.
  
  "A further round of quantitative easing by the BOJ, in addition to possible weakness in the yen, may allow for $10 to $15 an ounce upside to the price today, in our view," Deutsche Bank said in a report. "Nevertheless, we believe that such support is likely to be ephemeral, with renewed pressure likely as we move through November. We continue to see $1,700 an ounce as an important support level."
  Gold Reverses Losses On Equity; Econ Concerns Stay
  
  
• Crude oil is reversing most of Monday's losses. Brent was last trading up by $0.02, or 0.02 percent, to $109.46, while WTI advanced $0.51, or 0.6 percent, to $86.05.
  
  "The shutdown of refineries [on the U.S. East Coast] basically means that there are breaks in the supply chain," said Michael Hewson, senior markets analyst at CMC Markets. "[This] means there will be a little bit of scarcity, so that can still underpin prices."
  Brent rises towards $110 on storm damage fears
  
  
• The expiration of the November natural gas futures contract has pushed December to the front of the board. In turn, prices are at the highest levels in a year in anticipation of the winter heating season. The front-month December contract was last trading down by $0.05, or 1.3 percent, to $3.75 after reaching as high as $3.82 earlier.
  Natural Gas Futures Fluctuate On Forecasts Of Cooler Weather
  
  
• The grain complex is higher. Corn was last trading up by $0.03, or 0.44 percent, to $7.40/bushel, while soybeans rose by $0.06, or 0.41 percent, to $15.33 and wheat added $0.06, or 0.7 percent, to $8.64.
  Grain futures regain strength; soybeans bounce off 2-week low
  
  
• Copper was last trading up by $0.02, or 0.62 percent, to $3.52/lb on Comex.
  
  "There is absolutely no appetite at the minute to pick up metals as an investment. In September, QE3 came in and euphoria pushed prices up. But if you look at real data, it's not improving," said Dominic Schnider, head of commodity research at UBS Wealth Management. "We probably won't get an acceleration in Chinese demand until March."
  Copper bounces from two-month low; growth woes cap gains
  
  
  

What to Watch For:

9:00 a.m. ET: S&P/Case-Shiller Home Price Index (August)

4:30 p.m. ET: API Weekly Statistical Bulletin