The commodity market was down after the opening bell on Tuesday as the investors tackled the freshest China industrial output and as the mixed Fed rate hike knocked down the US dollar temporarily. The precious metals and the energy sector were moderately lower while the agricultural stocks were mostly steady.
At the time of writing, WTI crude oil on the New York Mercantile Exchange for January contract went down 0.40 percent to $52.62 per barrel while RBOB gasoline declined 0.29 percent to $153.85 per gallon. Natural gas managed to tick 0.03 percent higher, almost flat at $3.51 per MBTU, while heating oil dropped 0.23 percent to $166.79 per gallon.
On the International Commodity Exchange, Brent crude for February contract plummeted 0.29 percent to $55.53 per barrel.
Technically, the oil market was still steady since the prices were still above $50 in light of the global glut supply. The implementation of the output cut deal could lift the prices higher, thus, this bearish momentum might only be limited and could only last until the market could digest the recent industrial data from China.
Meanwhile, the majority of the precious and industrial metals on the Commodity Exchange slipped. Gold prices for February delivery dropped 0.21 percent to $1,163.50 per troy ounce, while silver lost 0.27 percent to $17.14 per troy ounce for its March contract. Copper futures for March delivery dipped 0.59 percent to $206.35 per pound.
Gold spot was also down 0.02 percent to 1,161.93 per troy ounce and platinum spot skid 0.31 percent to $929.10 per troy ounce.
The yellow metal initially edged higher as a safe haven asset, but the mixed opinions regarding the Fed rate increase erased the gains. A rate increase would definitely be a headwind for gold due to its inverse relationship with the US dollar.
Most of the market strategists are expecting more rate hikes from the central bank of the United States as the US economy has shown signs of recovery. In this case, the bullish momentum for gold will be extended. However, it is possible that investors will shift to another asset, such as silver, which has a huge potential in the market due to its looming demand.
In terms of the agricultural stock, corn was flat at 360.50 USD/bu, while cocoa and live cattle increased 3.23 percent and 2.19 percent respectively. Wheat was still down with 0.36 percent while cotton lost 0.10 percent.
Apparently, the climb of industrial production in China affected the interest of the investors. Aside from the return of market confidence in China, the data also signaled for the recovery of the second largest economy in the world. Taking into consideration its strong trade link and dependence on the commodities, the commodity currencies traded higher reasonably. The commodities failed to trade with the flow only due to the mixed sentiments over the Fed rate hike.