Gold touched it highest levels in nearly two months Wednesday ($1,416.30), approaching a new record price fuelled by panic relating to the far-reaching ramifications of ongoing violent social unrest in Libya.
Gold has risen close to 10% since trading $1,308 on January 28.
While precious metals climbed, stocks fell for a second consecutive session marked by crude oil briefly breaching the $100 per barrel mark.
European stocks also closed lower today with Britain’s FTSE 100 falling 1% and the DAX in Germany tumbling 1.6%. France’s CAC 40 followed the downward trend, closing lower by 0.8%.
Asian markets meanwhile ended the day mixed: The Hang Seng fell 0.4% and Japan’s Nikkei tumbled 0.8%. The Shanghai Composite rose a marginal 0.2%.
In the US, however, the big story was commodities, led by grains staging an impressive comeback after yesterday’s significant sell-off.
US wheat, in particular, ended higher after a slide the likes of which had not been seen since 2008. Corn and soybean futures similarly gained as a tangible end came to Tuesday’s fund long-liquidation.
Tonight, traders are anticipating Thursday’s report from the US Agriculture Department, which will update its forecast for US spring plantings at its annual conference.
According to a new Reuters poll of analysts, US farmers this year are expected to plant “the second largest corn acreage since World War II, down only slightly from its projections made on February 14.”
An insightful report from AgWeb today inspired more food for thought in the ag world, speculating about whether adequate acreage will be available to meet the growing global demand for US agricultural products.
So despite what the USDA numbers hold in store for tomorrow, most traders believe the fundamentals for grains remain bullish.
Rich Nelson, an analyst for Allendale Inc., succinctly summarized the feelings of many in his comments this afternoon to Reuters. “The key issue now is whether some people will step in to buy at these lower levels,” Nelson said. “Very large tenders for wheat showed up today so it’s clear foreign buyers see it as a buying opportunity.”
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