Oil, Gold Fall On Housing And Inventory Reports
U.S. 10-year Treasury bond yields remained near their lowest
levels since March, after a housing report reported existing home sales that are
at their lowest levels in two years. The housing market has factored in
largely into investors’ beliefs that the U.S. economy is experiencing an overall
slow-down. Investors attribute the housing market slide to an excessive
inventory and an overall slowing of growth in the U.S. economy. After
today’s report, more and more investors are wagering that the Fed will continue
to pause rate hikes through the year.
The U.S. dollar was basically unchanged after a report that
existing home sales had plummeted during the month of July. The dollar has
slid against the yen and the euro over the last few weeks, as investors brace
themselves for a total pause in the Fed rate hikes. A weak housing market
and U.S. economy had already been factored into the dollar, which accounts for
the lack of movement on economic reports. The yen and euro could raise
rates before the year is out, which would put the U.S. dollar in the hot-seat if
the Fed is indeed done raising rates.
Crude oil futures fell 1.8% to close at $71.76 after the
Energy Department showed an unexpected increase in crude inventories. A
decline of over 2 million barrels was expected, but the actual inventories
showed an increase in about a half-million barrels. Natural gas also
declined, down 1% on more supply excesses. Gas has fluctuated, pulled by
high supply on one end and high temperatures on the other.
Gold fell slightly to close down 0.1% at $624.50 an ounce.
Demand for the safe-haven metal fell with oil, as inflation concerns were also
kept at bay by a housing report that showed an unexpected decline in existing
home sales. Silver, however, rose just over 2% to close up for the day.
Softs traded mixed today. Cocoa was up 0.7%, coffee fell
0.8%, orange juice traded up fractionally and sugar rose nearly 3% for the day.
Grains rose across the board. Corn was up nearly 2%,
wheat was up 1.7%, soy rose 0.5% and oats rose 0.4%
Meats traded with fractionally change, with cattle down
fractionally and porkbellies flat on the day.
Oil Inventories Slide, Gasoline Stockpiles Rise (full
story).
Existing Home Sales Show Significant Decline In July (full
story).
John Patrick Lee