Few traders wanted to go short with the U.S. https://www.forbes.com/markets/newswire/2002/09/10/rtr717833.html
Commodities-Gold, wheat see profit taking, oil firm
Reuters, 09.10.02, 5:09 PM ET
NEW YORK (Reuters) - Gold prices closed lower on Tuesday and oil prices also closed off their best levels of the day as profit-taking speculators cashed in some winnings ahead of the anniversary of the Sept. 11 attacks on America.
In other featured commodity trade, profit taking ahead of a monthly U.S. government crop report due on Thursday took some of the heat out of the drought-driven grain market rally. But soybeans still closed higher while wheat and corn edged back.
At the COMEX, gold for December delivery closed $3.40 lower at $319.40 an ounce, snapping a week-long rally amid jitters about a potential U.S. attack on Iraq to oust Saddam Hussein.
Gold struck a seven-week high on Monday. Analysts cited "paranoia" about the chances for another terror attack one year after suicide hijackers destroyed the World Trade Center and part of the Pentagon.
Despite the profit taking, analysts said the safe haven premium that gold has been gathering was still largely intact and few traders wanted to go short with the U.S. slowly building support for a potential military conflict with Iraq.
"It looks like some of the people who tried to get long and buy yesterday ahead of Sept. 11 amid all these tensions worldwide at the moment burnt their fingers and lost some money," said one dealer at a precious metals refiner.
Gold got a brief late-morning boost after the United States raised its color-coded alert system to orange from yellow on Tuesday to indicate a "high risk of terrorist attacks," citing credible information from an al Qaeda source of a possible suicide strike, likely against U.S. targets overseas.
Earlier in the day, the market also garnered support from a U.S. Navy warning to shipping in the Middle East Gulf of possible planned attacks by al Qaeda against oil tankers.
Those warnings boosted oil prices at the New York Mercantile Exchange, but those markets also trimmed gains by the close on profit taking. Crude oil for October delivery closed unchanged at $29.73 a barrel after rising to $30.20.
About a quarter of the world's traded oil -- 12 million barrels per day -- is shipped out of the strategic waters of the Gulf through the straits of Hormuz between Iran and Oman.
"According to unconfirmed reports circulating within the regional shipping community, the al Qaeda terrorist group has planned attacks against oil tankers transiting the Arabian Gulf and Horn of Africa areas," the warning from the U.S. Navy's Maritime Liaison Office in Bahrain said.
Also supportive was news of a widening oil workers strike in Norway, a major non-OPEC oil producer.
A Norwegian oil union said a strike which disrupted state-run Statoil's Mongstad refinery on Tuesday could choke off 400,000 barrels a day of crude output from the North Sea.
State-dominated oil firm Statoil said Norway's biggest refinery was running at reduced production and would eventually shut if the strike continued, while the oil terminal at Mongstad had storage capacity to receive crude from Norwegian oil fields for another 14 days.
NYMEX October heating oil rose 0.65 cent to 79.27 cents a gallon and October gasoline closed 0.94 cent higher at 79.94 cents.
At the Chicago Board of Trade, profit taking was also the order of the day in most grain markets as traders cashed some of the winnings seen from this summer's drought-driven rally.
Wheat for December delivery closed down 6 cents a bushel at $4.16, giving back about half of Monday's gains. December corn closed down 1-3/4 cents at $2.87-1/2 while November soybeans closed 6-1/4 cents higher at $5.77-1/4, boosted by heavy buying of call options by a big brokerage firm late in the day.
CBOT wheat prices soared to five-year highs on Monday, while corn prices are still hovering near five-year highs and soybeans near-four year highs. The U.S. Agriculture Department said last month that U.S. corn production would fall 7 percent this year and soybean output 9 percent due to drought.
The department will issue updates on those estimates on Thursday morning before the Chicago market opens.
U.S. wheat production is currently seen 14 percent lower than last year and at the lowest level since 1972. Since that estimate, rains in spring wheat areas like North Dakota have further delayed harvest and caused more crop damage.
Copyright 2002, Reuters News Service