Wednesday, August 24, 2011

Commodities: Crude rebounds as US equities sprint ahead

Date: Wednesday 24 Aug 2011
Crude oil stocks rallied on Tuesday, in tandem with US equities, which soared on speculation the Federal Reserve will announce stimulus measures to boost US economic growth.

Crude oil for October delivery, the new front-month contract, recovered from a 1.2% drop to settle $1.02 higher at $85.44 a barrel on the New York Mercantile Exchange.

Brent crude also higher, rising 95 cents higher or 0.9% at $109.31 a barrel on ICE Futures in London. Both US and Brent oil prices fluctuated between gains and losses in a volatile session.

Federal Reserve Chairman Ben Bernanke will address central bankers this Friday and it is widely expected that he will announce new measures to spur growth.

Weaker than anticipated US economic data out Tuesday fuelled expectations that Bernanke could outline more monetary stimulus measures.

July new home sales fell to their lowest level in five months at 298,000 while the Richmond Federal Reserve Bank’s business activity fell to -10, its weakest in more than two years.

Gold lost a touch of its allure on Tuesday, falling for the first time in seven sessions, as it came off a record of above $1,910 an ounce.

Gold prices, which have risen 16% in August so far, took a breather on Tuesday as profit takers moved in.

Gold for December delivery declined $30.60 to settle at $1,861.30 an ounce on the Comex division of the New York Mercantile Exchange.

Gold prices have risen 32% in 2011. 

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