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| Talks About QE Beneficent for Gold Posted: 04 Sep 2012 01:16 PM PDT Today, gold traded near the $1,700 level, which was last reached in March. The rally was caused by hopes for stimulating measures from various central banks. Such measures should spur inflation that would be beneficent for the precious metal. Last week, Federal Reserve Chairman Ben Bernanke hinted that the US central bank may implement the third round of quantitative easing. Indeed, today’s negative macroeconomic data from the United States confirmed that the economy requires support. There will be employment reports later this week, which should affect markets tremendously. The Fed watches employment with utmost care and negative data would increase chances for QE3 in the near future. The data from the eurozone was not good either. Most analysts believe that the European Central Bank will cut its main interest rate from 0.75 percent to 0.5 percent during its policy meeting on Thursday. Moreover, ECB President Mario Draghi spoke about his plan to initiate purchases of 3-year bonds. That would be a European version of QE, which should add to strength of gold. Gold traded at $1,695.54 per ounce, near its opening level, as of 20:09 GMT on COMEX today. Earlier the metal touched $1,695.95 — the highest price since March 13. |
| Crude Oil Loses Value on Global Manufacturing Slowdown Posted: 04 Sep 2012 12:30 PM PDT Crude oil futures slumped today as manufacturing was slowing last month in various countries across the world. The US manufacturing Purchasing Managers’ Index fell from 49.8 in July to 49.6 in August. The eurozone PMI was at 45.1, below the preliminary estimates. The HSBC China Manufacturing PMI from 49.3 to 47.6 last month — the lowest level since March 2009. Any reading below 50.0 indicates decline of the industry. Prices for oil are heavily dependent on the performance of the global economy. Demand for crude falls as economy slows. The falling PMI figures are certainly telling investors that the global economy does not fare well. The unfavorable reports were Crude oil declined from $97.17 to $95.46 per barrel as of 19:05 GMT on NYMEX today. October futures for delivery of Brent crude dropped as much as $1.07 (0.9 percent) to $114.71 per barrel by 13:04 on ICE today. |
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