21 Aug 2013
Commodities generally softer on lingering FOMC uncertainty
FXstreet.com (Athens) - Subdued risk appetite over when the Federal Reserve will reduce its economic stimulus program, hurt crude oil but boosted gold as a safe-haven asset.
The ‘Risk-off’ environment ahead of FOMC meeting and US Dollar weakening, represent the main drivers of commodity momentum of late. U.S. crude oil futures fell sharply on Tuesday as traders sold to close out positions ahead of the front-month contract's expiration and in reaction to news the Seaway pipeline had shut down halting shipments from Oklahoma to the Gulf Coast. U.S. crude oil futures for September delivery, expired $2.14 per barrel lower, or down 2 percent, at $104.96, their largest one-day percentage loss in two months, due to both uncertainty over today’s FOMC release, as well as a reaction to the Seaway pipeline event. On the other hand, gold prices are rising as the dollar weakened the past days and U.S. Treasury bond yields retreated on lingering uncertainty over when the Federal Reserve will reduce its economic stimulus program. At the time of writing, spot gold is at 1363.40 up 0.4%, rebounding $11 from yesterday’s low of 1.352,20, but still away from its Monday’s high of 1384.75. Copper futures dipped 0.4 percent to 7,292.75 a ton (1.1023 ton).
The ‘Risk-off’ environment ahead of FOMC meeting and US Dollar weakening, represent the main drivers of commodity momentum of late. U.S. crude oil futures fell sharply on Tuesday as traders sold to close out positions ahead of the front-month contract's expiration and in reaction to news the Seaway pipeline had shut down halting shipments from Oklahoma to the Gulf Coast. U.S. crude oil futures for September delivery, expired $2.14 per barrel lower, or down 2 percent, at $104.96, their largest one-day percentage loss in two months, due to both uncertainty over today’s FOMC release, as well as a reaction to the Seaway pipeline event. On the other hand, gold prices are rising as the dollar weakened the past days and U.S. Treasury bond yields retreated on lingering uncertainty over when the Federal Reserve will reduce its economic stimulus program. At the time of writing, spot gold is at 1363.40 up 0.4%, rebounding $11 from yesterday’s low of 1.352,20, but still away from its Monday’s high of 1384.75. Copper futures dipped 0.4 percent to 7,292.75 a ton (1.1023 ton).