Commodity Blog

Posts Tagged ‘COMEX’

Crude oil rallied today together with other commodities, while gold declined as traders preferred riskier assets. The major news topic today was US employment that was much better than analysts predicted.

US nonfarm payrolls rose by 243,000 jobs in January. That’s compared to the average forecast of 150,000 and the December growth by 203,000. The unemployment rate fell to 8.3 percent, making a pleasant surprise for market participants, who expected it to stay at 8.5 percent.

Carsten Fritsch, analyst at Commerzbank, spoke about the positive impact of the news, but also mentioned a negative side of the employment growth regarding commodity prices:

The jobs data shows the economy is gaining momentum. This is bullish for risk appetite and therefore for commodity prices. However, it may limit the scope for a third round of quantitative easing, and this may limit gains.

March futures for delivery of crude oil gained $1.11 to $97.47 per barrel before trading at $96.89 by 13:42 on NYMEX. Spot price for Brent crude went up from $112.50 to $113.34 per barrel as of 17:41 GMT today on ICE. Gold dropped from $1,758.70 to $1,736.70 on COMEX today.

Commodities rallied as Federal Reserve Chairman Ben Bernanke said yesterday that he expects the US economy to grow with faster pace this year. Gold joined the rally and was further boosted by prospects for quantitative easing if such outlook would prove to be wrong.

Bernanke explained how external influences, like the earthquake in Japan and Europe’s crisis, hurt the US economy in 2011, but added:

Fortunately, over the past few months, indicators of spending, production, and job market activity have shown some signs of improvement; and, in economic projections just released, Federal Open Market Committee (FOMC) participants indicated that they expect somewhat stronger growth this year than in 2011.

Positive performance of the US economy isn’t guaranteed, though, as Chairman explained:

The outlook remains uncertain, however, and close monitoring of economic developments will remain necessary.

Such comments leave place for additional stimulus that may be beneficial for gold prices.

The economic situation in the United States is balance in a unique way as both improvement and deteriorating of the economy may prove positive for the precious metal. Prices for gold reflected that by climbing by 11 percent in January.

Gold traded at $1,756.70 as of 4:23 GMT today on COMEX after jumping from $1,745.10 to $1,759.50 yesterday.

Crude oil and gold, as well as other commodities, jumped after the Federal Reserve maintained interest rates near zero and pledged to keep borrowing costs record low at least till late 2014. Such move was considered a ”light” version of quantitative easing. It weakened the dollar and boosted commodities priced in the US currency. March for delivery of crude oil advanced $0.66 to $100.06 per barrel on NYMEX. Brent went higher from $110.45 to $110.74 per barrel on ICE today as of 6:41 GMT. Gold was up from $1,666.50 to $1,711.00 yesterday and traded at $1,710.80 today on COMEX.

Wheat was also higher on dwindling Russian stocks. Inventories of some Russian regions declined by more than 50 percent, while other regions shipped almost all of their supplies as exports picked up. Wheat climbed from $6.4075 to $6.4650 per bushel on CBoT today.

Crude oil and copper pared yesterday’s gains today as concerns about the European debt crisis stopped the rally of commodities. Gold, on the other hand, profited from the worries.

Demand for German bonds on the auction yesterday was weak. Eurozone inflation fell from 3.0 percent to 2.8 percent last month, according to the preliminary estimate of Eurostat.

Earlier, crude was rising on growing tensions around Iran. Oil and copper were also rallying as manufacturing in the United States and China expanded.

February futures for delivery of crude was down $0.71 to $102.25 per barrel as of 00:43 GMT in electronic trading on NYMEX. Brent crude dropped from $113.65 to $113.05 per barrel as of 3:43 GMT today on ICE. Copper was down from $3.4700 to $3.4230 per pound, while gold went higher from $1,614.20 to $1,617.20 per ounce today on COMEX.

Gold and oil rose today, as well as most commodities, as manufacturing in China and the United States expanded. Silver also gained. The China Federation of Logistics and Purchasing reported that the nation’s Purchasing Managers’ Index increased from 49.0 to 50.3 in December. The US PMI advanced from 52.7 to 53.9 last month.

Both commodities also gained on rumors that Iran made headway in creating nuclear weapon. Gold rallied as the rumors increased its appeal as a safe asset, while oil rose on concerns that sanctions against the country from the USA would disrupt shipments.

February futures for crude oil delivery advanced as much as $4.13 to $102.96 per barrel on NYMEX, the highest price since May 10. Brent crude surged from $108.38 to $112.07 per barrel today as of 23:18 GMT on ICE. Gold was up from $1,570.10 to $1,606.70 per ounce, while silver spot price went higher from $28.17 to $29.55 per ounce on COMEX.

Oil fell as China’s manufacturing decline. The HSBC/Markit China Manufacturing PMI fell from 49.0 to 48.7 in December. A value below 50.0 indicates contraction. Europe also continued to hurt commodities. February futures for delivery of crude oil fell $0.82 to $98.83 per barrel on NYMEX. Brent fell from $108.04 to $107.76 per barrel on ICE.

Copper performed better on hopes that the US economic growth would outweigh the problems in Europe and the slowdown in China. The US PMI is expected to post a positive reading next week. The US economy grew 1.8 percent this year and analysts predict that it’ll expand 2.1 percent in 2011. Copper advanced from $3.4220 to $3.4315 per pound on COMEX.

Copper gained today as global inventories declined, while demand is expected to pick up.

Global stockpiles fell 22 percent since March and were at the lowest level since October 2009 this month.

The European Central Bank injected money in Europe’s financial system by providing loans to European banks in an attempt to battle with the region’s crisis. Goldman Sachs Group Inc. predicted that Europe’s demand for copper will increase in the next quarter and prices will advance 26 percent in the next year.

The US economy continuously shows signs of improvement, improving prospects for industrial metals. Durable goods orders rose 3.8 percent in November after no growth was registered in October.

Copper rose from $3.4250 to $3.4470 per pound today on COMEX and earlier reached $3.4635 — the highest level since December 13.

Crude oil rallied, while gold fell today as the fundamental data from the United States confirmed that the economic recovery gains momentum.

The US gross domestic product expanded 1.8 percent in the third quarter. The jobless claims went down from 368,000 to 364,000 last week. The University of Michigan consumer sentiment index rose from 64.1 to 69.9 in December. The leading index advanced 0.5 percent in November.

Oil also gained as the report showed that the US inventories shrank by 10.6 million barrels to 323.6 million barrels last week.

February futures for gained as much as $1.14 to $99.81 per barrel by 12:19 on NYMEX. Brent crude oil advanced from $107.92 to $108.21 per barrel today as of 17:48 GMT on ICE, following the earlier drop to $107.29. Gold retreated from $1,608.80 to $1,604.00 on COMEX.

Copper, oil and gold advanced as good news from Europe and the United States bolstered commodities. Oil also rose on the speculation that the US inventories declined.

The European Union pledged €150 billion to the International Monetary Fund that the IMF will use to help in the battle with the region’s sovereign-debt crisis. The German Business Climate index unexpectedly increased to 107.2 in December from 106.6 in November, while analysts predicted it to drop to 106.2. Spain sold its three- and six-month bills at an auction yesterday, exceeding its maximum target.

The US housing starts increased from 627,000 to 685,000 and the building permits rose from 644,000 to 681,000 in November.

February futures for crude oil delivery advanced $3.19 to $97.24 per barrel on NYMEX. Brent oil was at $107.15 per barrel today as of 3:11 GMT on ICE after jumping from $104.30 to $107.00 yesterday. Gold advanced from $1,615.50 to $1,620.20 per ounce today on COMEX, following yesterday’s rise from $1,596.40 to $1,615.00. Copper traded near its opening level of $3.3720 per pound today, while the metal climbed from $3.3230 to $3.3640 yesterday.

Gold attempted to rally yesterday, but failed. The Federal Reserve refrained from adding stimulus during its monetary policy meeting on December 13. The decision was bad for gold as the QE3 would result in a weaker dollar that could boost the precious metal. Much of the previous strength of gold was derived from the continuous attempts of the developed nations to weaken their currencies.

The dollar was still weaker yesterday as the fundamental reports from the United States were good for the most part and gold attempted to profit from that. Alas, without much success. The good fundamentals are a mixed blessing for the yellow metal. Good macroeconomic data results in less demand for a safe haven, leading to a weaker dollar, but also less need for gold as a refuge.

Gold opened at $1,571.50 per ounce, rallied to $1,592.80 and closed at $1,573.40 on COMEX.