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18 Sep 2013
Gold tumbles on muted inflation data
FXstreet.com (Athens) – The Brent oil settled at a six-week low yesterday as world powers met to draft a resolution to destroy Syria's cache of chemical weapons, as well as gold which tumbled 0.2% on muted US CPI.
The dollar struggled broadly on Tuesday as investors were reluctant to make fresh bets on the currency ahead of the outcome of a Federal Reserve meeting expected to result in a reduction of its massive stimulus program. To elaborate on, the dollar index fell 0.2 percent in late afternoon trading to 81.140, declining for a fifth straight session and still is very soft today ahead of FOMC minutes. Despite the ‘greenback’s weakening’ across the board, the Brent crude oil prices settled at a six-week low on Tuesday, mainly due to the fact that major world powers met to draft a resolution to destroy Syria's cache of chemical weapons, calming investor fears of an imminent US military response. The resumption of some Libyan output also pressured further the prices downwards.
Brent crude for November delivery settled $1.88 per barrel lower at $108.19, after trading as low as $107.41, the lowest settlement price since Aug. 8. The benchmark slid 2.4 percent on Monday, its steepest one-day decline since June 20. Furthermore, U.S. crude for October delivery settled $1.17 per barrel lower at $105.42 after trading as low as $105, its lowest since Sept. 3. The contract expires at the end of trading on Friday. Last but not least, Brent's deflating risk premium caused the spread between the global benchmark and U.S. oil to narrow and settle at a one-month low at $3.37 per barrel.
Gold fell on Tuesday on muted U.S. inflation data and as investors braced for the expected announcement by the Federal Reserve of a reduction in its bond-buying stimulus. Spot gold fell 0.2 percent to $1,310.55 an ounce. On Monday, gold tumbled 1.5 percent to a five-week low of $1,303.85.U.S. gold futures for December settled down $8.40 an ounce to $1,309.40, with trading volume about 10 percent below its 30-day average. It is noteworthy that gold has dropped 22 percent this year as the Fed signaled it would start reining in its massive bond-buying stimulus that has boosted financial liquidity in the market. Silver which is heavy correlated with the price of gold especially when the latter one collapses, edged up 0.1 percent to $21.72 an ounce, after falling 2.3 percent in the previous session. At the time of writing, the commodities are mixed, with Crude Oil trading at +0.20% , spot gold down -1.04% and spot silver down -1.43%.
The dollar struggled broadly on Tuesday as investors were reluctant to make fresh bets on the currency ahead of the outcome of a Federal Reserve meeting expected to result in a reduction of its massive stimulus program. To elaborate on, the dollar index fell 0.2 percent in late afternoon trading to 81.140, declining for a fifth straight session and still is very soft today ahead of FOMC minutes. Despite the ‘greenback’s weakening’ across the board, the Brent crude oil prices settled at a six-week low on Tuesday, mainly due to the fact that major world powers met to draft a resolution to destroy Syria's cache of chemical weapons, calming investor fears of an imminent US military response. The resumption of some Libyan output also pressured further the prices downwards.
Brent crude for November delivery settled $1.88 per barrel lower at $108.19, after trading as low as $107.41, the lowest settlement price since Aug. 8. The benchmark slid 2.4 percent on Monday, its steepest one-day decline since June 20. Furthermore, U.S. crude for October delivery settled $1.17 per barrel lower at $105.42 after trading as low as $105, its lowest since Sept. 3. The contract expires at the end of trading on Friday. Last but not least, Brent's deflating risk premium caused the spread between the global benchmark and U.S. oil to narrow and settle at a one-month low at $3.37 per barrel.
Gold fell on Tuesday on muted U.S. inflation data and as investors braced for the expected announcement by the Federal Reserve of a reduction in its bond-buying stimulus. Spot gold fell 0.2 percent to $1,310.55 an ounce. On Monday, gold tumbled 1.5 percent to a five-week low of $1,303.85.U.S. gold futures for December settled down $8.40 an ounce to $1,309.40, with trading volume about 10 percent below its 30-day average. It is noteworthy that gold has dropped 22 percent this year as the Fed signaled it would start reining in its massive bond-buying stimulus that has boosted financial liquidity in the market. Silver which is heavy correlated with the price of gold especially when the latter one collapses, edged up 0.1 percent to $21.72 an ounce, after falling 2.3 percent in the previous session. At the time of writing, the commodities are mixed, with Crude Oil trading at +0.20% , spot gold down -1.04% and spot silver down -1.43%.