Gold Futures Fall Back on Concerns That FOMC Will Taper QE Program

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Commodities Trading

: 06 September 2013

Nymex crude prices gained $1.06 to $108.46 yesterday as the US weekly oil inventories report showed a drop in stockpiles.

At the same time, President Obama looks set to stand his ground against Russia on the Syrian issue which does not bode well for the energy complex.

If oil prices took their direction based on inventories and political issues, gold investors appeared to be more concerned that an ongoing economic recovery will eventually force the Fed to scale back stimulus.

As a result, they pushed the precious metal $23.9 down to $1,367.8, with a strengthening US dollar playing its part.

Commodities Trading

: 05 September 2013

Despite positive US vehicle sales figures, WTI crude prices pulled back yesterday, losing $1.17 to finish at $107.25 per barrel.

This may have been caused by an easing of worries that a potential military strike on Syria would disrupt the whole Middle Eastern oil supply.

Energy investors should also note that the US Department of Energy will release its weekly inventories today after being delayed by the Labor Day holiday.

Despite seeing a lower dollar, which usually attracts additional buyers, gold prices headed south yesterday, tumbling $20.4 to reach $1,391.6.

The move may have been triggered by the news that the biggest gold producers in South Africa were close to striking a deal with the union that controls more than half of the industry's workers.

Commodities Trading

: 04 September 2013

Stronger than estimated US manufacturing numbers sparked a rebound in the energy complex on investor belief that the demand for crude oil will remain well supported.

On top of that, worries that a strike on Syria might be on the cards accentuated the rally, with Nymex crude gaining $1.63 to $108.39 per barrel.

Top Republicans have supported President Obama's call for action in Syria and investors' sentiment regarding the precious metal turned bullish on safe haven demand.

This saw the gold market recoup $20.4 to $1,412.5 despite a rise in the US dollar.

Commodities Trading

: 03 September 2013

Crude prices opened sharply lower following a sigh of relief over the weekend that the chances of an imminent strike on Syria had faded.

However, during early trading, China indicated that it had expanded faster than initially thought and that brought back buyers into the energy market.

WTI crude recouped most of its losses, ending just $0.28 in the red at $106.78.

In line with crude oil and the rest of the commodities spectrum, gold prices initially plunged on easing tensions in the Middle East.

From there the precious metal made a steady come back on lingering political uncertainty which allowed it to move back up and finish at $1,392.1.

Commodities Trading

: 02 September 2013

With little public support for military intervention in Syria, the Western governments played it safe and gave up for now.

That reduced the need for a risk premium built into energy prices and so US crude started to pull back, dropping $0.42 to $107.71 on Friday.

At the time of writing, this unwinding seems to be continuing on course.

A higher dollar spilled over into precious metals, putting downward pressure on gold spread betting prices which lost $13.8 to $1,394.2.

Ongoing signs that the US economy is maintaining its recovery have also supported the case for reducing monetary stimulus sooner rather than later.

By Jonathan Sudaria, 6 September 2013

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