http://blogs.barrons.com/focusonfunds/2013/09/10/syria-hits-gold-oil/?mod=yahoobarrons
Syria’s conciliatory overtures today—including agreeing to cease production of chemical weapons and surrender its caches—hurt both gold and oil, which fell the most in two months and three weeks, respectively, on the news.
The SPDR Gold Trust (GLD), Market Vectors Gold Miners ETF (GDX) and Market Vectors Junior Gold Miners ETF (GDXJ) all fell, as did the iShares Silver Trust (SLV). This morning,RBC Capital Markets noted that Syria would weigh on gold price, continuing a trend from earlier in the week, as saber-rattling produced only a brief uptick in buying. (The metal is also battling the widely held view that higher interest rates will be bad news for gold bugs.)
Oil also fell, as the potential for supply disruption stemming from U.S. intervention waned; theUnited States Oil Fund (USO) was down during regular trading.
Aside from the near-term concerns about Syria, Morgan Stanley commodities team also noted that “the global oil balance appears to be loosening”: Global supply appears to be improving, while recent reports suggest Saudi production exceeded 10 mmb/d in August, highlighting the kingdom’s willingness to supply tight markets. Demand is also at risk. Crude runs are falling seasonally, and higher crude prices continue to pressure refinery margins, risking further run cuts. Rising subsidized retail prices in India, Malaysia and China only risk eroding demand further. Lastly, building distillate stocks, particularly in Asia, reduce the need for higher runs and distillate restocking this fall.
