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China’s PMI Drives Riskier Commodities Down, Gold Higher

February 3, 2014 at 11:39 by Vladimir Vyun

Commodities that are perceived to be risky fell today, copper and crude oil among them. The reason for the drop was the manufacturing data that was released from China over the weekend. The Purchasing Mangers’ Index fell from 51.0 in December to 50.5 in January. The report was not that bad, strictly speaking, as it showed that the sector continues to expand, but the slowdown of growth was enough to drive investors away from riskier assets. Consequently, gold rallied.

Last week’s quantitative easing tapering from the Federal Reserve was another reason for the sour mood of traders. QE tapering means that there is less cheap money, making speculators less willing to risk. Several other central banks will make monetary policy decision this week, but without any major surprises the current trend will likely persist, meaning that precious metals will continue to rise, while most other commodities will remain in a downtrend.

April futures for delivery of gold advanced $6.4 (0.52 percent) to $1,246.2 per troy ounce as of 11:33 GMT on COMEX today. Copper for delivery in March lost $0.003 (0.09 percent) to $3.194 per pound. March contract for WTI crude oil was down $0.22 (0.23 percent) to $97.27 per barrel on NYMEX. Brent crude declined $0.44 (0.41 percent) to $105.96 per barrel on ICE.

If you have any questions and comments on the commodities today, use the form below to reply.

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