Gold Futures Rise Amid Improving Economic Sentiment and Corporate Earnings

Strategic Insights -

Gold futures rallied on July 13, 2010, in tandem with other commodities, as improving economic sentiment and upbeat corporate earnings results boosted investor optimism. The most actively traded gold contract for August delivery settled at $1,213.50 an ounce, a $14.80 increase, or 1.2%, on the Comex division of the New York Mercantile Exchange. This rally was partly fueled by the positive quarterly results from Alcoa Inc. and CSX Corp., which analysts interpreted as a sign of improving demand for raw materials in the second half of the year.

Key Takeaways:

  • Gold futures rose $14.80, or 1.2%, to settle at $1,213.50 an ounce on the Comex division of the New York Mercantile Exchange.
  • The rally was driven by improving economic sentiment and upbeat corporate earnings results from Alcoa Inc. and CSX Corp.
  • Analysts attributed the increase to a "breath of risk appetite being breathed back into commodities markets" and a "whole commodities complex rebounding."
  • Gold can be traded like commodity futures, rising when investors' appetite for riskier assets is piqued.
  • The gold futures rally was accompanied by increases in other precious metals, including silver, platinum, and palladium.
  • The most-active palladium contract rose more than 8% since July 2.
  • Ralph Preston, senior market analyst with Heritage West Financial, attributed the rally to "momentum" and a positive sentiment spreading to precious metals.
  • Kimberly DuBord, analyst with Briefing.com, noted that the whole commodities complex is rebounding, and gold seems to be moving with everything else.

Statistics:

  • Gold futures rose by $14.80, or 1.2%, to settle at $1,213.50 an ounce.
  • The most-active palladium contract rose by more than 8% since July 2.
  • Comex September silver settled up 34 cents at $18.257 an ounce.
  • Nymex October platinum settled up $20.10, or 1.3%, at $1,535.40 an ounce.
  • September palladium rose $15, or 3.3%, to $469.15 an ounce.

Sources:

  • Dow Jones Commodities News via Comtex.
  • Dow Jones Newswires.
  • MarketWatch.
  • Comex division of the New York Mercantile Exchange.