COMMODITIES : Rising Dollar Sinks Prices of Precious Metals Futures
Precious metals futures retreated sharply Wednesday, triggered by the surging value of the dollar.
On other markets, wheat and cattle futures moved higher, other grains and beans were mostly a little weaker and stock index futures posted substantial gains, following a rally on the stock market.
There were strong movements on most of the financial markets.
“The story that seemed to light the fire under all these markets was a Japanese news account that (major financial ministers) would reaffirm the lower limit of the dollar at about 125 yen,” said Craig Sloane, an analyst in New York with Smith Barney, Harris Upham & Co.
There have been reports that the finance ministers from the five major industrial nations will meet next week in Washington. This supposedly would be in conjunction with scheduled meetings of the International Monetary Fund and the World Bank.
On the Commodity Exchange in New York, gold settled $4.40 to $5.70 lower, with June at $451.30 an ounce; silver was 22 cents to 22.5 cents lower, with May at $6.465 an ounce.
Stock index futures at the Chicago Mercantile Exchange recorded one of the busiest days since the October stock crash. Estimated volume of the Standard & Poor’s 500 index was an estimated 62,286, compared to a monthly average in March of about 48,000.
A surge in the Dow Jones industrial index triggered a curb at the New York Stock Exchange on program trading, under which traders buy or sell stocks and take the opposite action in index futures. This came late in the session, however, and apparently didn’t have a large impact on trading at the Merc.
The June S&P; 500 contract settled 7.90 points higher at 267.40. The underlying index was up 6.98 points at 265.49.
Cattle futures advanced on follow-through buying from Tuesday’s late recovery at the Chicago Mercantile Exchange, but the underlying factors don’t look good, said Charlie Richardson, an analyst with Lind-Waldock & Co.
“Feedlots are selling a little cheaper for the first time in two or three weeks,” he said, adding that the boxed beef trade is declining.
Energy futures were little changed on the New York Mercantile Exchange.
West Texas Intermediate crude oil settled 1 cent to 3 cents higher, with the April contract at $16.30 a barrel; heating oil was 0.02 cent lower to 0.18 cent higher, with May at 45.34 cents a gallon, and unleaded gasoline was 0.07 cent lower to 0.22 cent lower, with May at 48.42 cents a gallon.
