Commodities Taking a Price Hit on Syria Crisis

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Sept. 11 (Bloomberg) -- Bloomberg's Scarlet Fu and Elizabeth Campbell put futures in focus with a look at how the crisis in Syria is impacting commodities in "On The Markets." They speak on Bloomberg Television's "In The Loop."

Shall it bring in elizabeth campbell.

Give us an overview right now.

The markets are having a bit of a mixed reaction this morning.

Let's start with gold.

Gold has been swinging between losses and gains today, but earlier this morning it touched nearly a three-week low in new york.

I spoke to sterling smith, a futures specialist in chicago at citigroup, and he said the war rhenium is coming out of the gold market.

It appears investors may be less inclined to own goal given the fact that president obama spoke about expecting perhaps a diplomatic solution in averting a military strike.

The fact that a military strike is not imminent, may mean that the premium we have seen in the gold market is gone and investors may not be buying gold to protect themselves against any kind of risk out there.

But what are you hearing in terms of the odds of gold moving to the upside eventually?

Sterling said that moving to the upside is not off the table.

The pact that president obama did not -- the fact that president obama did not take a military strike off the table, he would not be surprised to see investors getting into the gold market if there is a hint that stability will not stay.

Oil is the first point of contact, the first point of reaction for the markets.

How is the oil market trading?

Oil is up today after two sessions in a row of being down in new york.

What sterling smith at citigroup said is that the fact that the military strike could still happen, the fact that middle eastern oil supplies would be disrupted means that traders are not willing to take the premium out of the gold market.

We could see prices continue to go up.

We are at a tipping point in gold, according to sterling, depending on what happens with military action , or to take the risk premium off like they are doing in the gold market.

Tell us what else you see owing on in the commodities market.

There is movement in copper.

Copper is up today, raising projections for consumers in china.

One trader said that we are expecting better growth in china, better economic growth in china.

That is good news across the board for commodities, especially for copper, considered by investors a barometer for economic growth.

Thank you so much, elizabeth campbell, joining us from chicago with our futures in focus.

"market makers" is up next.


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