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Commodities Rise After ECB Policy Meeting, Gains Limited

September 6, 2012 at 21:36 by Vladimir Vyun

Commodities gained today as the European Central Bank announced its bond-purchase program, giving hope that the central bank will help the eurozone to survive the crisis. The favorable macroeconomic indicators from the United States added to the bullish momentum of raw materials. The rally was short-lived, though, and currently commodities reduced gains, but most of them remain above the opening level.

The ECB will start buying government bonds at the lower level of the yield curve, focusing on securities maturing in the range from one to three years. The program should help the indebted European economies by reducing borrowing costs. That, in turn, will ease the pressure on the whole European economy.

According to the report of Institute for Supply Management, the US services Purchasing Managers’ Index rose from 52.6 in July to 53.7 in August, while no major change was expected by specialists. The employment report from Automatic Data Processing showed the healthy increase by 201,000 jobs, more than was predicted. The good data is positive for most commodities, but not necessary for gold as the rising employment lowers pressure on the Federal Reserve to implement a new round of quantitative easing.

Gold advanced from $1,696.43 to $1,700.67 per ounce as of 21:25 GMT on COMEX today, while earlier it touched $1,713.57 — the highest price since March 11. Copper was up from $3.5010 to $3.5070 per pound today. Crude oil turned out to be loser, falling from $96.02 to $94.76 per barrel on NYMEX, while earlier it jumped from $97.67.

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

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