Crude oil surged to as high as 67.49 before closing at 67.16, +2.7%, Thursday. Gasoline and heating oil prices also rallied, +4.1% to 1.9132 and +3.1% to 1.7644, respectively as good news from US' housing price boosted optimism in the macro-economic environment. Today, the black gold retreats to 66.7 as investors took profits as some corporations' earnings missed estimates.

Existing home sales in the US rose +3.6% to an annual rate of 4.89M in June, compared with market expectation of an increase to 4.8M, from 4.77M in the previous month. This is the third consecutive increase and gave more indications that the housing market in the US has bottomed.

Initial jobless claims in the week ended July 18 increased to 554K units, slightly better than consensus despite rising from 522K in the prior week. Stock markets rallied with Dow Jones Industrial Average and S&P 500 Index jumping +2.1% to 9069 and +2.33% 979.3 respectively. This was the first time since January that DJIA closed above 9000 while S&P 500 Index also reached its level not seen after President Obama was elected in November last year.

However, profit-taking was seen afterwards on both commodities and stocks. The events triggering it were disappointments from earnings results of Microsoft, American Express and Amazon.

Microsoft reported that its net income was $3.04B in the quarter ended June 30, down -29% from the same period in 2008, while revenue dropped -17% to $13.1N, compared with analysts' expectation of $14.5B. American Express announced its net income plunged -48% to $342M in 2Q09 while Amazon.com reported that its second quarter profit slid -10% to $142M. Although sales increased +14% to $ 4.65B, it's below market anticipation of $4.7B.

Gold price edged +0.16% to close at 954.8 Thursday. Silver also added +0.5% to close at 1.377. Performance for precious metals was significantly worse than others in the commodity complex as they were very much determined by USD's movement. Moreover, there was a large group of investors who buy gold and/or silver as inflation hedges and safe asset. However, demand of these kinds has been reduced as market sentiment turns better while inflationary risk remains subdued, as reinforced by policymakers.

USD weakened to 1.43 against the euro, the lowest since June 3, amid strong economic data. However, it then erased all losses and ended the day rising to 1.415. Against the Japanese yen and Australian dollar, the greenback also finished the day higher.

News reported that gold miners in South Africa may call a national strike as they request pay rises. The mining companies, including AngloGold, Ashanti and Gold Fields, have offered an increase from 8-9.5% but is still below 15% requested by workers. Should the strike take place, it will affect gold production. However, we believe any impact on gold price will only be temporary. Gold is closely linked to the financial market and historically, its response to change mine supply, expansion and contraction in jewelry demand is rather short-lived.