Crude Rises on the Dollar’s Decline

The metals closed the New York trading day only marginally higher after Gold was unable to hold the magic $1000 level.v Despite the sharply higher Euro and a $3.00 jump in the price of Oil; the metals finished the day only a shade higher and well below the session highs.

Silver closed up 8 cents at $16.42. Gold finished at $997.00 up $1.10 per ounce. Palladium slipped $3.00 to $292.00. Platinum rose by $16.00 to $1280.00. Volume was moderate.

Over in the currencies the Dollar continued to weaken on fears of Chinese Dollar liquidations and growing concerns of U.S inflation. Last on the Euro $1.4504 up 1.69 cents against our Greenback.

Crude rose on the back of the weak Dollar gaining $3.38 per barrel to $71.40. Remember tomorrow’s OPEC meeting. Stocks are also well off the session highs with the Dow Jones industrial Average currently sitting at 9469 up only 27 points.

When we return tomorrow traders will have two fresh pieces of data to contend with. We get the Weekly Oil Inventories and the latest Fed Beige Book. The Beige Book; named for the color of it’s cover is an anecdotal compilation of business conditions in the 12 Federal Reserve Bank districts.

Tomorrow’s economic calendar:

RESERVE BANK OF NEW ZEALAND Rate Decision
OPEC Meeting
Weekly Oil Inventories
U.S. Fed Beige Book

Crude Drops $2.51 on Technical Selling

The Euro managed to regain an early session sell-off which was triggered after today’s better than expected U.S.economic data. Last trade $1.4315. As for the data; the Case Shiller Home Price Index gave economists a breath of fresh air clocking in with a price decline of only 15.44%. This was significantly better than the Street estimate of -16.4%; and the second month of improvement.

Today’s other report; Consumer Confidence also came in at a level far above expectations. Confidence was reported at 54.1. The Street expected 47.9. That is a very large positive variance.

Metals ended the day a shade higher in the midst cross currents of a weaker Dollar, but also sharply lower Oil. Silver finished the New York trading session up 9 cents at $14.29. Gold edged up $2.00 closing at $944.00. Palladium rose $.4.00 to $286.00. Platinum ended at $1238.00 down $2.00. Volume was surprisingly light given today’s almost $3.00 fall in the price of Crude. Energy traders point to technical selling after Oil failed to break and hold the psychological $75 level. A wave of pre-programmed sell orders were triggered once Crude slipped back below the $75 mark. Last trade $71.86 down $2.51 per barrel.

Stocks rallied on the data with the Dow jumping almost 100 points. Things have since quieted down on profit taking with the Dow presently up 46 points at 9555. When New York trading resumes tomorrow market participants will have three new pieces of data to digest. Durable Goods, New Home Sales for July, and the Weekly Oil Inventories will be the focus.

Personal Income and Spending Mixed

Our regular day to day barometers were idle with the Euro trading virtually unchanged at $1.4410. Crude Oil was also surprisingly quiet given today’s data and tomorrow’s pending Weekly Oil Inventories. Last on Oil $71.23 off 35 cents per barrel.

A spike in Pending Home Sales and another rise in Personal Spending served to increase economic optimism pushing industrial commodities including Silver higher.

Silver was up with a 35 cent gain at $14.60. Gold followed suit rising $9.00 to $965.00. Palladium and Platinum both advanced on yesterday’s positive auto sales comparisons. Palladium closed at $277.00 up $4.00. Platinum gained $22.00 and is now trading at $1258.00.

Pending Home Sales clocked in with a rise of 3.6%; exceeding Wall Street expectations. Our other report; Personal Income and Spending was mixed. Income was down by 1.3%, but Spending grew by a larger than expected .4%. Remember spending is the key to economic recovery.

Even the stock market remains stuck in neutral today despite optimistic economic data. Last on the Dow 9291 up a mere 4 points with 2 hours left in the trading day.

Tomorrow the calendar will keep traders busy with another wave of data….We will get the private ADP Employment Survey, June Factory Orders, the July ISM Services Index, and the Weekly Oil Inventories.
Along with EZ PMI Services, German PMI Services, U.K. PMI Services, and U.S. Non-Farm Payrolls Cost Index.

Sell-Off in the Oil Futures Markets

The metals with the exception of Palladium closed broadly lower today in a knee jerk reaction to a sell-off in the oil markets and a sympathetic counter surge in the Dollar. To explain today’s events: It started with traders running for the exits in the oil futures markets in response to today’s Congressional hearing surrounding possible restrictions on oil speculation. Congress is putting on a full court press in an effort to stop the volatility in oil trading by limiting speculation. As a result speculators ran for cover. Crude Oil fell $1.48 per barrel to $66.90.

Currency traders pushed up the Dollar in sympathy with the decline in Oil. The Euro gave up it’s early session half cent gain then continued falling by 46/100ths of cent to it’s present level of $1.4169.

Metals traders got spooked pushing the metals complex lower in reaction. Silver closed at $13.78 off 25 cents. Gold fell $15.00 to $938.00. Palladium managed to end the session with a $2.00 gain at $262.00. Platinum dropped by $27.00 to $1189.00. Volume was moderately heavy.

Stocks turned lower today on mixed economic data and another barrage of bad corporate quarterly earnings results. As for the data; the Case Shiller Home Price Index clocked in with a smaller than feared price decline. Prices fell an average of 17.06%. The Street expected the drop to be 17.9%. That was the good news.

The bad news came when Consumer Confidence was reported at 46.6; worse than the estimate of 49. The one two punch of confidence and earnings has the Dow currently down 56 points with two hours left in the trading day. Tomorrow the calendar remains active with Durable Goods, the Weekly Oil Inventories, and the Fed Beige Book.