Morning Call For Tuesday, Dec. 18

Metals prices this morning are mixed with Feb gold (GCG19 +0.02%) +1.4 (+0.11%), Mar silver (SIH19 -0.37%) -0.019 (-0.13%), and Mar copper (HGH19 -1.56%) -0.042 (-1.52%) at a 1-month low. Monday's closes: Feb Comex gold (GCG19) on Monday closed up +10.4 (+0.84%) and Mar Comex silver (SIH19) closed up +0.122 (+0.83%). A weaker dollar pushed metals prices higher Monday along with a selloff in stocks. The S&P 500 tumbled to a 10-1/4 month low Monday, which boosted safe-haven demand for gold. Recent stock market turmoil has been a bullish factor for gold on increased demand for gold as a store of wealth after long gold positions in ETFs rose to a 4-1/2 month high last Friday. On the negative side for silver is weaker-than-expected U.S. economic data that signals reduced demand for industrial metals after Monday's Dec Empire manufacturing index dropped to a 1-1/2 year low and the Dec NAHB housing market index plunged to a 3-1/2 year low. Also, fund selling of silver continues as long silver positions in ETFs fell to a 5-1/2 month low last Friday. A negative factor for gold is reduced inflation expectations, which curbs demand for gold as an inflation hedge, after the 10-year T-note inflation expectations rate sank to a 1-1/4 year low.

Jan WTI crude oil prices (CLF19 -2.81%) this morning are down -$1.46 per barrel (-2.93%) at a 1-1/4 year low and Jan gasoline (RBF19 -2.32%) is down -3.38 cents per gallon (-2.40%) at a 2-week low. Monday's closes: Jan WTI crude oil (CLF19) on Monday closed down by -$1.32 per barrel (-2.58%) and Feb Brent crude (CBG19) closed down -$0.67 (-1.11%). Jan RBOB gasoline (RBF19) closed down by -2.39 cents per gallon (-1.67%). Crude oil gave up an early rally Monday and sold off to a 2-week low on signs of increased global production and suspect energy demand. Russian oil crude output is on the rise after Interfax reported that Russian December crude production rose by +60,000 bpd to 11.43 million bpd from November's level. Also, a slump in the S&P 500 to a 14-1/2 month low Monday undercut confidence in the economic outlook and in energy demand. Crude prices opened higher Monday on the lower dollar and on positive carry-over from last Friday's data from Baker Hughes that showed active U.S. oil rigs in the week ended December 14 fell by -4 rigs to a 1-3/4 month low of 873 rigs.

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