Gold prices slipped to their lowest level in around eight weeks on Tuesday, as growing optimism over the health of the U.S. economy
Gold Prices Slip to 8-Week Lows Amid Optimism Over U.S. Economy – Gold prices slipped to their lowest level in around eight weeks on Tuesday, as growing optimism over the health of the U.S. economy and increasing expectations of a Federal Reserve rate hike in December boosted the dollar and Treasury yields. Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the greenback. A stronger dollar can weigh on commodities priced in the currency as it makes them more expensive in other currencies. Gold prices ended lower on Monday to notch their second-losing session in a row after upbeat data reinforced expectations that the Federal Reserve will increase U.S. interest rates in December for a third time this year. His comments could take on extra importance after reports surfaced late last week that he had met with U.S. President Donald Trump to discuss his potential nomination as the next Fed chair when Yellen’s term ends in February. Interest rate futures are now pricing in about an 80% chance of a December Fed rate hike according to Investing.com’s Fed Rate Monitor Tool.
Oil steadies after steep losses; speculators grow impatient – Oil steadied on Tuesday, as speculators took profits on some large positions that have built up in the last couple of weeks, but the prospect of gradually ebbing oversupply lent support. Money managers have pushed their bullish bets on the Brent crude market to a record high in the last week, encouraged by signs of rebalancing between supply and demand. But when positioning becomes too stretched, this can lead to abrupt shifts in the price. “It’s always problematic when you have this amount of speculative length in the market,” Petromatrix strategist Olivier Jakob said. “The price action … for me is all about positions and potentially profit-taking on some of those speculative positions.” Oil prices climbed last week on tension in Iraqi Kurdistan after the region’s independence vote, with Turkey threatening to close a pipeline that brings oil from the region in northern Iraq to the Mediterranean. Turkey has not carried out the threat, analysts said. The recent rally had also been driven by signs that a three-year crude glut is easing, helped by a production-cutting deal among global producers led by OPEC.
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