Written by Sumit Roy  |

November 01, 2012

Morning Call: Gold & Silver Rise On Strong Economic Data, WTI & NatGas Move Up Ahead Of Inventory Reports

Details

Commodities rise across the board.

Commodities are rallying for a second session after encouraging economic data from around the world lifted sentiment. China's official manufacturing PMI rose from 49.8 to 50.2 in October, putting it back above the 50 threshold that separates contraction from expansion and at the highest level since June. HSBC's China manufacturing PMI gauge—which focuses more heavily on smaller firms—rose from 47.9 to 49.5—an eight-month high.

In the U.S., payroll processor ADP said that private employers added 158K jobs in October. The official employment figures will be released by the government on Friday and are expected to show a net jobs gain of 125K, while the unemployment rate is expected to tick up from 7.8 to 7.9 percent.

Meanwhile, the number of people filing for unemployment benefits in the U.S. fell from 372K to 363K last week, slightly below what was anticipated.

Figures on U.S. manufacturing, construction spending and vehicle sales are scheduled to be released in the coming hours.

Taking a look at currency markets, the U.S. Dollar Index was last trading up by $0.05, or 0.07 percent, to 79.97.

• Silver is leading the precious metals complex higher today. The gray metal was last trading up by $0.34, or 1.05 percent, to $32.59, while gold rose by $3.40, or 0.2 percent, to $1724.05.
  
  Platinum gained $7.25, or 0.46 percent, to $1576.25 and palladium advanced $11.25, or 1.86 percent, to $616.
  
  "Gold prices... may be helped by a pickup in Indian festive buying ahead of Diwali and the Indian wedding season," said analysts at HSBC.
  Gold Firms In Line With Stocks, U.S. Data Eyed
  
  
• Crude oil is mixed ahead of the EIA's Weekly Petroleum Status Report. Brent was last trading down by $0.70, or 0.64 percent, to $108, while WTI eked out a gain of $0.02, or 0.02 percent, to $86.26.
  
  "Many refineries are still out or with low runs so a build in crude oil inventories is expected next week and a draw on diesel, heating oil with gasoline moving sideways because no cars are moving," said Michael Poulsen, oil analyst at Global Risk Management.
  Oil Dips On Expectations Of Weak Demand Post-Sandy
  
  
• Natural gas is rising by $0.04, or 1.11 percent, to $3.73/mmbtu. Analysts expect the EIA to report that operators injected 67 to 71 billion cubic feet into storage last week.
  Ahead Of The Bell: Natural Gas Supplies
  
  
• The grain sector is higher, as corn rises by $0.06, or 0.76 percent, to $7.62/bushel, while soybeans adds $0.19, or 1.23 percent, to $15.66 and wheat gains $0.07, or 0.78 percent, to $8.71.
  
  About 91 percent and 87 percent of the U.S. corn and soybeans harvests, respectively, have been completed, according to the USDA.
  Corn, Soybeans Harvest Wrapping Up
  
  
• Copper was last trading up by $0.04, or 0.82 percent, to $3.55/lb on Comex.
  
  "We've had the slightly better PMI data which is no doubt helping metals lift off the lows we had earlier this week," said Citi Analyst David Wilson. "The lows we saw on Tuesday were good buying points and the data is probably being a little more supportive, but obviously there is still a sense of caution."
  Copper Rises On Asia Data, Weak Demand Still A Drag
  
  
  

What to Watch For:

8:15 a.m. ET: ADP Employment Change

8:30 a.m. ET: Initial Jobless Claims

10:00 a.m. ET: ISM Manufacturing (October)

10:00 a.m. ET: Construction Spending (September)

10:30 a.m. ET: Weekly Natural Gas Storage Report

11:00 a.m. ET: Weekly Petroleum Status Report

5:00 p.m. ET: Vehicle Sales (October)