Commodities Wrap 14 October: Gold Settles 1.66 Percent Lower and WTI at a Three-Week High After the Hot CPI

By The Edge Research Team

First published at 16:46 GMT; updated with the session’s settlements at 20:04 GMT.

The midday rout in the metals ran to the settlements: December gold settled 69.40 dollars, or 1.66 percent, lower at 4,107.90 an ounce after September’s hot US inflation reading, with silver 6.32 percent down on the evening board, while WTI settled 95 cents higher at 95.09 dollars a barrel, a three-week high, on fresh attacks around the Strait of Hormuz and on Saudi oil facilities. Brent settled 37 cents higher at 106.06. Coffee led the agriculture board at 1.38 percent.

The metals settle the CPI damage

US consumer prices rose 0.6 percent in September and 3.7 percent on the year, above the 3.6 percent expected, with gasoline accounting for over half of the monthly rise and core prices up 0.3 percent on the month and 2.6 on the year, the Bureau of Labor Statistics reported. Interest rate traders priced a 37 percent chance of a Federal Reserve increase this month by the close, up from 22 percent on Tuesday, per CME FedWatch figures carried by Reuters, and a Federal Reserve survey published in the afternoon showed inflation intensifying across parts of the country as fuel costs rose. Gold’s December settlement at 4,107.90 dollars wrote the pressure down; on the wire’s account spot gold touched its lowest since 7 October, and spot silver fell 6.6 percent with platinum and palladium down 3.5 and 2.8. On the evening board silver stood 6.32 percent below Tuesday’s settlement at 55.765 dollars, copper 1.85 percent lower, palladium 2.70 and platinum 3.82, all five metals down for a second session, and the VIX held 10.35 percent higher at 16.85 while bitcoin lost 1.60 percent. Fed Vice Chair for Supervision Michelle Bowman, speaking before the data, said the central bank has time to wait and see how markets and the economy evolve after its September increase.

Crude settles higher on the strait and Saudi attacks as the IEA counts the flows

WTI’s 1.01 percent settlement gain took the US benchmark to its highest close in three weeks and Brent’s 0.35 percent rise took it to 106.06 dollars, after the Houthis struck an administrative building at Saudi Aramco’s headquarters in Dhahran, causing a limited fire by the Saudi energy ministry’s account, and Iranian officials told Reuters the country began using new offensive tactics against shipping about ten days ago. Two vessels, a container ship and a dry bulk carrier, sank near the Strait of Hormuz within twenty-four hours on maritime officials’ accounts carried by Reuters; the Revolutionary Guards said the container ship hit a naval mine, a day after UK maritime authorities reported two ships struck by projectiles within the strait. The International Energy Agency counted crude exports from Middle East Gulf producers 4.4 million barrels a day higher in September at around 75 percent of their pre-war level, and Russian production 65,000 barrels higher at 8.43 million, still 870,000 below a year earlier; the same October report forecasts world demand falling 2.6 million barrels a day on average this year, with diesel a quarter of the drop. The three remaining energy rows held near flat into the close, heating oil 0.19 percent up and gasoline 0.18, while natural gas eased 0.24 percent; the API’s weekly storage report lands tonight and the EIA’s on Thursday, a day late on Monday’s federal holiday. In agriculture, coffee rose 1.38 percent and wheat 0.64, while sugar fell 1.09.

Energy

The WTI and Brent rows settled, per the wire’s settlement report, against Tuesday’s settlements; the three remaining energy rows are quotes captured after the settlement window at 20:09 GMT, same basis; ranked by change.

Metals

The gold row settled, per the wire’s settlement report; the other four rows are quotes captured after the settlement window at 20:09 GMT against Tuesday’s settlements; ranked by change, all five fell.

Agriculture

Quotes captured after the settlement window at 20:09 GMT against Tuesday’s settlements, five of the seven tracked rows; cocoa, down 0.09 percent at 5,728.00, and corn, down 0.36 at 481.00, are the omitted middle.

Rates, currencies, volatility and crypto

Reference rows at the 20:09 GMT read, ranked by change; intraday levels with no daily settlement, and the bitcoin row is the Coin Metrics dollar price as the feed carries it.

Why it matters: The settlements wrote down what the midday board sketched: the hot CPI repriced the metals, gold’s settlement 1.66 percent lower and silver nearly four times that, while crude settled higher against the stronger dollar on the supply threats, WTI at a three-week closing high. A dollar-driven metals selloff against a supply-driven crude bid is the day’s record, and tomorrow trades against it.

Outlook: Our US wrap follows after the New York close with this board carried. Tomorrow’s commodities wrap measures against tonight’s settlements, US producer prices land Thursday, and the EIA storage report follows the API’s tonight, each a day late on Monday’s federal holiday.

How these wraps are prepared: Methodology.

Sources: CNBC, Reuters, US Bureau of Labor Statistics, the International Energy Agency, The Edge.

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