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Commodities: Gold higher as investors ponder longevity of equities run-up

By Andrew Schonberg

Date: Thursday 16 Feb 2017

Commodities: Gold higher as investors ponder longevity of equities run-up

(ShareCast News) - Gold is trading higher on Thursday, with both classes of crude oil also up, as investors like the safe-haven yellow metal amid nascent jitters on how long the global equities run-up can last.
At 15:02 GMT, on Comex, gold was up 0.6% to $1240.5 an ounce, with silver up 0.65% to $18.08 an ounce and copper down 0.57% to 272.5 cents a pound.

FXTM vice president of market research Jameel Ahmad noted that investors were being enticed to gold regardless of US stock markets maintaining their positions around record levels.

"Of course dollar weakness helps gold, but I am just wondering if investors are hedging towards the precious metal as a result of questions remaining in the background as to whether this stock-market rally can really continue," pondered Ahmad.

SwissQuote added earlier on Thursday that the short-term trend for gold was clearly positive, putting key support $1122 an ounce.

"In the long-term, the technical structure suggests that there is a growing upside momentum. A break of $1392 is necessary ton confirm it."

London Metals Exchange-traded three-month industrial metals were mixed. Copper and aluminum made firm gains, while zinc and tin eased.

Meantime, Nymex-listed West Texas Intermediate crude was up 0.7% to $53.48 a barrel, while Intercontinental Exchange-traded Brent was up 0.54% to $56.05 a barrel.

"Rumours that OPEC will cut output again at its next meeting spurred a jump in the oil price on Thursday," said Jasper Lawler, senior market analyst at London Capital Group.

"The OPEC rumour mill conveniently started spinning after data showed US stockpiles hit new records this week, raising supply glut concerns."

Lawler added that investors were positioned for the next push higher in oil, but at the moment that appeared to be the problem.

"Another drop below $50 per barrel may be needed to flush out the week oil longs," he said.

SwissQuote opined that crude was heading towards resistance at $54.32.

"Yet, a correction in the near-term towards $49.61 is possible in case support at $50.71 is broken," said SwissQuote, adding that the black liquid needed to push higher to confirm deeper buying pressures.

On the agriculturals front, Chicago Board of Trade-priced corn was down 0.26% to 377.75 cents a bushel, while wheat rose 0.11% to 468.75 cents a bushel.

ICE-quoted cocoa was ahead 1.71% to $2021 a MT, and cotton No.2 fell 0.25% to 77.09 cents a pound. Live cattle was down 0.2% to 113.13 cents a pound.

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