Futures prices of gold, platinum and silver surged Monday in reaction to a bundle of bullish signals including a weaker dollar and a strong rally in the oil market.
On other markets, copper futures continued to climb, grains and soybeans were mixed, livestock and meat futures were mostly lower and stock index futures retreated.
The gold market has shown vigor since its return last week to spot prices above $400 an ounce. Analysts said gold prices appear poised to move even higher than Monday’s finish of $408.60 an ounce for October delivery on New York’s Commodity Exchange.
“We’ll probably get up to $413 or $415 on spot gold,” said Richard Levine, vice president of precious metals and currency trading with Elders Futures Inc. in New York.
But Levine said gold’s recovery would depend upon continued strength in the buoyant platinum market and in crude oil prices.
He said Monday’s gains were largely due to short covering--stop-loss buying by those who had bet on falling prices.
Analyst James Steel of Refco Inc. in New York said $400 an ounce proved to be a strong technical support point for gold once the metal’s price had settled firmly above that level.
“Today we built on the relatively modest gains of last week,” Steel said.
Like Levine, Steel linked gold’s renewed strength to the dollar’s weakness, the oil market’s rally and platinum’s recovery, which is based on supply concerns.
On the Commodity Exchange, gold settled $5.40 to $5.50 higher, with the contract for delivery in December at $412.70 an ounce; silver was 1.5 cents to 1.7 cents higher, with December at $6.42 an ounce.
Copper Futures Gain
Platinum settled $8.80 to $10.80 higher on the New York Mercantile Exchange, with October at $520.40 an ounce.
Copper futures prices continued to climb on the Commodity Exchange, posting new contract highs for the sixth consecutive day on fears of tight supply.
Copper settled 1.85 cents to 3.80 cents higher, with October at $1.28 a pound.
Oil prices soared on the New York Mercantile Exchange. Analysts said buying was spurred by Saudi Arabia’s statement that it would abide by its OPEC crude production quota if other members of the oil cartel would do the same.
Iraq also indicated its willingness to abide by its production quota set by the 13-nation Organization of Petroleum Exporting Countries.
OPEC overproduction has been blamed for the persistent weakness of oil prices.
West Texas Intermediate, the benchmark grade of U.S. crude, settled 43 cents to 66 cents higher, with November at $13.60 a barrel; heating oil was 1.23 cents to 1.57 cents higher, with November at 38.96 cents a gallon, and unleaded gasoline was 0.70 cent to 1.35 cents higher with November at 41.41 cents a gallon.
Soybean futures finished higher, wheat settled lower and corn futures ended mixed on the Chicago Board of Trade, reflecting differing opinions about the size of the nation’s corn and soybean crops.
The Agriculture Department will release its updated crop production estimates Wednesday afternoon. Trading activity ahead of such reports typically revolves around speculation about the government’s estimates.
Wheat Heads Lower
Traders generally expect USDA to increase its production estimates from last month’s predictions of 1.47 billion bushels of soybeans and 4.46 billion bushels of corn.
Wheat settled 2 cents to 7.25 cents lower, with the contract for delivery in December at $4.275 a bushel; corn was 1.5 cents lower to 2.25 cents higher, with December at $2.9275 a bushel; oats were 2.75 cents to 4.5 cents higher, with December at $2.47 a bushel, and soybeans were 1.75 cents to 4.75 cents higher, with November at $7.9175 a bushel.
Most cattle futures declined on the Chicago Mercantile Exchange amid concerns about narrow packer profit margins and weakening demand for beef, analysts said.
Hog futures retreated on technical factors and expectations that hog prices in the spot market would open lower today.
Live cattle settled 0.53 cent lower to 0.15 cent higher, with October at 72.47 cents a pound; feeder cattle were 0.05 cent to 0.55 cent lower, with October at 81.75 cents a pound; live hogs were 0.03 cent to 0.52 cent lower, with October at 40.42 cents a pound, and frozen pork bellies were 0.28 cent lower to 0.20 cent higher, with February at 47.65 cents a pound.
Stock index futures declined on the Chicago Mercantile Exchange, where the contract for December delivery on the Standard & Poor’s 500 index settled 0.55 point lower at 280.30.