The commodities market has been fairly volatile since Federal Reserve Chairman Ben Bernanke suggested the central bank could soon end quantitative easing.
The commodities market has been fairly volatile since Federal Reserve Chairman Ben Bernanke suggested the central bank could soon end quantitative easing. However, he managed to ease many investors’ fears on July 10 when he announced that the current monetary policy will likely have to proceed for awhile longer.
Bernanke said the 7.6-percent US jobless rate actually overstates the success of the economy, so the Fed will maintain quantitative easing in order to further lower the unemployment rate, according to Reuters. As a result, gold performed much better this week than it has in previous sessions. Pulling back federal bond buying would have boosted the dollar, making the precious metal less attractive to investors.
On July 12, spot gold dropped $5.12, to $1,279.80 an ounce, but bullion is still on course for its biggest weekly gain in almost two years. On July 11, it hit $1,298.36, almost a three-week high.
Like gold, copper fell July 12, but was still on track for its biggest weekly gain in two months after Bernanke’s new announcement. It was also slightly hurt Friday by the fact that traders are waiting for China’s GDP data, which will be released on July 15.
Today, copper futures sold at $6,955.75 per tonne in official rings on the London Metal Exchange. The day before, it hit $7,049.25 a tonne, its highest price since June 18. That was also an increase of $180.44 from the previous session. Overall, copper performed well during the week.
Finally, crude oil was bolstered all week by low inventories in the US and investors’ willingness to take risks following a positive forecast from JPMorgan and Wells Fargo. Brent crude jumped $0.42, to $108.15 per barrel, on July 12. US crude also improved that day, gaining $0.38 to $105.29 per barrel.