Crude Jumps On Bullish API Report; Silver Hits Multi-Year High

Commodity markets finished mixed on Tuesday with the weaker U.S. Dollar one factor helping support dollar-denominated gold and crude, while a lethal combination of low demand and high supply pressured natural gas. Gold was also underpinned by some light flight-to-safety buying, while crude was boosted by a bullish industry inventory report.

Gold

Gold futures rose nearly 1% on Tuesday on worries over a possible recession. The catalysts behind the rally were disappointing U.S. economic data and escalating U.S.-China trade tensions. Additionally, the 2-year/10-year yield curve went deeper into inversion at the midday Tuesday. This fueled a drop in demand for higher-yielding assets like stocks, driving money into gold for protection.

In the U.S., home prices gained nationally, but at a slower pace than the last few years. Prices in June rose 3.1% annually, according to the S&P CoreLogic Case-Shiller national home price index. That was down from a 3.3% annual gain in May.

The closely watched 20-City Composite rose 2.1% annually, down from 2.4% in the previous month.

U.S. Consumer Confidence came in at 135.1. This beat the 129.3 estimate, but was lower than the previously reported 135.8.

Silver continued it quest to catch-up with gold’s gains this year by posting a third straight higher session. Analysts are saying that professional money managers are buying silver as catastrophe insurance. Futures hit a two-year high on Tuesday.

Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil traders ignored the weakness in the stock market and worries over slower demand growth due to possible recession, posting gains of 2.40% and 1.58% respectively.

Helping to drive prices higher late in the session was the weekly inventories report from the American Petroleum Institute (API) that showed a draw of 11.1 million barrels for the week-ending August 23 versus a forecast of a 2.112 million barrel draw.

Natural Gas

Natural gas prices retreated on Tuesday, failing to follow-through to the upside after the solid short-covering rally the previous session. The market lost 2.31% due to weaker cash prices and steady fundamentals.

Cash prices, which carried the market higher on Monday, fell on Tuesday as cooler temperatures were forecast to hang around a little longer than previously thought. Traders are looking for volatility toward the end of the week due to the futures market rollover. Net short positions are extremely high for this time of year.