Precious Metals Shine In Futures Trading
Undated (AP) _ Precious metals prices took on a firm note Monday, aided by the weak dollar, inflationary economic reports and news from the foreign scene.
On other markets, energy futures declined sharply; grains and soybeans were mostly lower; and livestock and meat futures were mostly higher.
″After selling off sharply toward the end of last week, metals are back responding to fundamentals,″ said Bette Raptopoulos, an analyst in New York with Prudential-Bache Securities.
Over the weekend, violence intensified in the South African mineworkers’ strike, she said, adding that the market reacted to this news but ignored consessions one company made Monday to the striking workers.
Precious metals also advanced on a report that U.S. escort vessels forced a small Iranian warship away from a convoy of Kuwaiti oil tankers in the Persian Gulf.
Economic data from the Commerce Department put consumer spending up 0.9 percent in July while personal income gained only 0.4 percent. The implication is that consumers are spending at a faster pace than they’re earning, but the inflationary implications were only modest and had a limited effect on metals prices, said Ms. Raptopoulos.
On the New York Mercantile Exchange, platinum gained $12.60 to $13.10 with the October contract at $612.50 a troy ounce;
On the Commodity Exchange in New York, gold was $3.60 to $3.80 higher with the August contract at $460.70 a troy ounce; and silver was 12 cents to 12.8 cents higher with September at $7.795 a troy ounce.
Crude oil futures lost another 30 cents a barrel on the New York Mercantile Exchange. The October delivery dropped as low as $18.15 a barrel before recovering somewhat and settling at $18.60.
″The dominant factor is still over-production by OPEC,″ said Chris McCormack, an ananyst in New York with E.D.&F. Man International Futures Inc.
One trade publication put total production this month by members of the Organization of Petrleum Exporting Countries at 19.7 million barrles a day, 3 million barrels above the cartel’s self-imposed quota.
While the incident in the Persian Gulf with the Iranian warship had some effect in the metals market, it was treated as a non-event by oil traders, said McCormack. Losses were trimmed when traders started buying to offset earlier sales, he said.
″The market’s got to work off a lot of excess crude before it recovers,″ said McCormack.
Crude oil futures have lost more than $3.50 a barrel since the first of the month.
West Texas Intermediate crude oil settled .20 cent to .30 cent lower with October at $18.60 a barrel; heating oil was .42 cent to .89 cent lower with September at 49 cents a gallon; unleaded gasoline was .30 cent to .65 cent lower with September at 49.17 cents a gallon.
Most livestock and meat futures advanced on the Chicago Mercantile Exchange.
Cash cattle markets were mostly steady to 1/2 cent a pound higher after a good day of boxed beef movement on Friday, said Tom O’Hare, an analyst in New York with Smith Barney, Harris Upham & Co.
There also is some belief, he said, that not as many cattle will be coming to market during September than had been expected.
While hog kills were higher than they have been, there were still below earlier projections for this time of year, he said.
Live cattle were .02 cent to 1 cent higher with the October contract at 65.15 cents a pound; feeder cattle were .12 cent lower to .65 cent higher with August at 76.65 cents a pound; live hogs were .20 cent lower to .52 cent higher with October at 50.77 cents a pound; and frozen pork bellies were .23 cent to .70 cent higher with August at 87.30 cents a pound.
Grain and soybean futures prices were mostly lower on the Chicago Board of Trade.
Activity was subdued and most price moves were modest.
Traders said the Agriculture Department’s weekly state-by-state crop reports, released after the close, were expected to show some improvement in the soybean crop quality. This kept buyers wary, they said.
While wheat futures retreated slightly, there were still expectations that China would bid sometime soon on U.S. subsidized grain.
Wheat was 1/2 cent lower to 1/2 cent higher with the September contract at $2.73 3/4 a bushel; corn was 1 cent to 2 3/4 cents lower with September at $1.58 a bushel; oats were 3 cents to 6 1/2 cents lower with September at $1.71 1/2 a bushel; and soybeans were 1 1/2 cents to 6 1/2 cents lower with September at $5.13 a bushel.