Oil And Gold On The Move As Geopolitical Tension Heats Up

U.S. Treasury notes remained basically unchanged, as investor
sentiment see-saws on the prospects of a rate hike in August.  After yields
fell to three week lows today spurred by general sentiments that the hikes will
pause, the fractional rise in the notes today sheds light on the fact that
investors really don’t know what the Fed will do in August.

The Japanese Yen fell the most against the U.S. Dollar in over
a year, after Japan’s Finance Minister Tanigaki said there was no need for the
BOJ to rush a rate hike.  Tanigaki hinted to the contrary last Monday, when
he said that rate hikes were more than probable.  Investors who had hedged
that the BOJ would raise rates cancelled their bets, and the ensuing sell-off

Gold closed at the highest in over a month, up $8.30 at
$664.70.  Gold continues to creep up as the situation in Iran remains to be
resolved and North Korea shows no signs of slowing down its missile tests.

Crude oil futures rose 79 cents to close up at $74.95. 
The Energy Department announced crude inventories earlier today, which showed a
decrease in supply of about 6 million barrels, over 4 million barrels short of
analyst’s estimates.  Iran continues to drive crude higher, as the country
remains adamant in its defiant stance to continue uranium enrichment.  In
other Middle Eastern news, Israel invaded Lebanon today in search of two Israeli
soldiers who were kidnapped by Shiite fundamentalists.

The softs traded mixed today; orange juice closed up 1.7%,
cotton was up 2.3% and sugar was down 1.8%.

Grains also traded mixed today on the heels of USDA’s report
on year-end estimates.  Corn was up 2.1%, wheat wsa down 2% and bean oil
was down 1%.

Meats traded flat to mixed, except for potbellied pigs which
were up 1.4%.


Crude Inventories Fall Sharply, Add To Recent Decline (full

U.S. Trade Deficit Sees Modest Increase In May (full

John Patrick Lee