After Cyprus, commodities struggle for direction
The Cyprus bailout deal left commodities traders scratching their heads. On Monday gold fell, silver rose, and key industrial metals and energy commodities were mixed.
The news that dominated trading talk was that Cyprus reached an agreement that it will allow it to get emergency bailout loans from other European countries. But traders weren't sure what happens next.
Normally an agreement like that would give stocks and industrial metals a lift, because it eliminates the immediate fear of a country's disorderly breakdown. But Monday, stocks across Europe and the U.S. fell. So did copper and palladium, which can gauge how investors feel about the economy since they're closely tied to manufacturing and industry.
Investors, it seemed, remain worried about Europe's long-term problems, like recession and high unemployment, and aren't persuaded that one stop-gap bailout deal will fix it.
"It is clear that investors aren't convinced that the bailout will mean the end of Cyprus and the Eurozone's problems," Kathy Lien of BK Asset Management wrote in a note to clients. "Banks reopen tomorrow (some will be closed until Thursday) and there could still be a run on the banking sector."
The price of gold fell slightly — which could actually be a sign of investor confidence, since gold tends to rise when investors are most nervous and are looking for a safe haven.
June gold edged down $1.50 to $1,606.50 per ounce. May silver was up 11.7 cents to $28.815 per ounce.
May copper fell 2.1 cents to $3.445 per pound. June palladium fell $4.20 to $757.35 per ounce. July platinum edged up $1.10 to $1,586.90 per ounce.
Energy commodities were mixed. Benchmark crude for May delivery rose $1.10 to $94.81 a barrel in New York trading. Brent crude, used to price many kinds of oil imported by U.S. refineries, rose 51 cents to $108.17 a barrel in London.
Wholesale gasoline was flat at $3.06 a gallon. Heating oil fell 1 cent to $2.88 a gallon. Natural gas fell 6 cents to $3.87 per 1,000 cubic feet.
Among agricultural contracts, wheat slipped 2.5 cents to $7.2725 per bushel. Soybeans lost 3.25 cents to $14.3725 per bushel. Corn rose 7 cents to $7.3325 per bushel.