Crude Oil prices moved lower in U.S. trading on Thursday on expectations for the Federal Reserve to close stimulus programs next month and raise interest rates next year, which would open the door to a stronger dollar. Crude slumps on prospects for stronger dollar. Crude falls on prospects for rising dollar. A firmer greenback makes oil less attractive on dollar-denominated exchanges, especially in the eyes of investors holding other currencies. The Federal Reserve on Wednesday said that it will likely close its monthly bond-buying program in October and suggested it will raise interest rates in 2015. While some time will pass when the bond-buying program closes and rates begin to rise, investors concluded that borrowing costs are set to climb in 2015 regardless, which should open the door to a gradual strengthening trend for the dollar. Wednesday's bearish U.S. storage data added to the selloff.
GOLD
Gold prices fell on Thursday after investors digested the Federal Reserve's Wednesday statement on interest rates and concluded that tighter monetary policy is drawing closer and usher in a strengthening trend for the dollar. Gold falls as market preps for dollar strengthening trend, gold falls as markets preps for end of ultra-loose U.S. monetary policy The Federal Reserve on Wednesday said that it will likely close its monthly bond-buying program in October and suggested it will raise interest rates in 2015. The Fed added interest rates will hover just above zero for a "considerable time," but the U.S. central bank also suggested it could move to hike benchmark borrowing costs faster than anticipated once it decides to begin tightening. An end of stimulus and prospects for higher interest rates should give the dollar added support going forward, ending six years of ultra-loose monetary policy that have bolstered gold prices, which shrugged off mixed U.S. data.
