Written by Sumit Roy  |

December 18, 2012

Morning Call: Gold Trades Flat, Oil Advances As Fiscal Talks Continue To Progress; NatGas Rises Again

Details

Commodities mostly rise.

Commodities are mostly higher today as hopes continue to grow that a deal to avert the "fiscal cliff" in the United States will be struck by the end of the year. President Obama has submitted a counteroffer to Republican Speaker John Boehner's latest proposal. Obama now wants to raise taxes on households making over $400K, up from his prior threshold of $250K. That brings the president closer to the speaker, who wants a $1 million threshold.

Overall, Obama is asking for $1.2 trillion in new tax revenues and $1.22 trillion in spending cuts. Boehner's plan calls for $1 trillion in revenues and $1 trillion in cuts.

Elsewhere, news flow is extremely light, with no notable economic data scheduled for release.

In currency markets, the U.S. Dollar Index was last trading down by 0.1 percent to 74.49.

• Gold and silver are little changed for a second day. The yellow metal was last trading down by $0.67, or 0.04 percent, to $1697.48, while the gray metal added $0.11, or 0.34 percent, to $32.40.
  
  Platinum gained $7.75, or 0.48 percent, to $1614.50 and palladium shed $4, or 0.57 percent, to $695.50.
  
  "The $1,700 level is key resistance, but there isn't much room on the downside as investors remain confident in gold's outlook," said Li Ning, analyst at Shanghai CIFCO Futures.
  Gold hovers around $1700/oz, US fiscal talks eyed
  
  
• Crude oil is higher. Brent was last trading up by $0.64, or 0.59 percent, while WTI gained $0.49, or 0.56 percent, to $87.69.
  
  "Supply is plentiful, demand is good," said Saudi Arabian oil minister Ali Al-Naimi. "Nobody is complaining about high prices or low prices. They are no longer sky-rocketing or falling down."
  Oil rises above $108 on hopes for US fiscal cliff deal
  
  
• Natural gas was last trading up by $0.05, or 1.55 percent, to $3.41/mmbtu. The latest weather forecasts are showing the possibility that seasonal temperatures will take hold in the U.S. East Coast and Midwest at the end of December. That would be a welcome development for bulls, who have suffered in recent weeks due to weak demand amid extremely mild winter temperatures.
  Plan for U.S. natural gas exports brings talk of economic boon, fears of failure
  
  
• The grain complex is underperforming. Corn was last trading down by $0.05, or 0.69 percent, to $7.19/bushel, while soybeans shed $0.17, or 1.1 percent, to $14.80 and wheat fell by $0.04, or 0.53 percent, to $8.04.
  
  "The weather conditions in Brazil have been improving, and that's helping ease [soybeans] supply concerns," said Tetsu Emori, commodity fund manager at Astmax Co.
  Soybeans drop as improving Brazilian outlook eases supply woes
  
  
• Copper was last trading down by $0.01, or 0.26 percent, to $3.64/lb on Comex.
  
  "The equities reacted favorably last night to this in New York and logically one would assume that this would be a positive for commodities as well," said Stephen Briggs, metals strategist at BNP Paribas. "But because base metals have been faring pretty well in the last few weeks, there may be less mileage for them than there might be for some other sectors."
  Copper dips on profit-taking after 'fiscal cliff' progress
  
  
  

What to Watch For:

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