Gold plunged to an eight-month low in New York as equities surged to a record; corroding therefore the demand for the precious metal as an alternative asset while that crude fell for a third day on rising U.S. supplies and as a stronger dollar weighed on commodity prices.
Not forgetting that this week Federal Reserve maintained its pledge to keep interest rates near zero for a ‘considerable time” after the end of quantitative easing, adding that the economy is growing at a moderate pace.
“Labor market conditions improved somewhat further” while “significant underutilization of labor resources” remains, the Federal Open Market Committee said on Wednesday in a statement in Washington.
Policy makers tapered monthly bond buying to $15 billion in their seventh consecutive $10 billion cut, staying on course to end the program in October. Bond purchases intended to hold down long-term interest rates have swelled the Fed’s balance sheet to $4.42 trillion.
Plus we should keep in mind this week as well we saw Abdalla El-Badri said yesterday that the Organization of Petroleum Exporting Countries’ production quota could fall 500,000 barrels a day to 29.5 million barrels a day next year. El-Badri was speaking at OPEC’s secretariat in Vienna after talks with Russian Energy Minister Alexander Novak.
Accordingly the gold is so far trading around $1216.35 an ounce recording a high of $1228.40 ounce and a low of $1214.05 an ounce and crude is trading around $92.20 a barrel recording a high of $93.20 a barrel and a low of $91.82 a barrel.