Gold rose to a one-week high on Thursday as the Federal Reserve raised interest rates amid growing concern that inflation is stagnating. The Federal Open Market Committee on Wednesday raised rates
Oil prices up on lower U.S. crude stocks, but growing output caps gains – Oil markets rose on Thursday, lifted by a fourth straight weekly fall in U.S. crude inventories, though climbing output capped prices well below the 2015 highs reached earlier this week. Traders said reports that the Organization of the Petroleum Exporting Countries (OPEC), Russia and other non-OPEC producers may be planning output cuts beyond the current timeframe which sees curbs until the end of 2018, also supported Brent. Despite the price gain, Brent was well below $65.83 a barrel, the June 2015 high touched earlier this week. It hit that level after the Forties pipeline – which carries significant amounts of the North Sea crude used to underpin Brent crude futures – was shut down due to cracks. “The next four weeks or so should be interesting. If the market is able to survive without the Forties supply, its returning on stream could trigger a major sell-off,” said Sukrit Vijayakar, director of energy consultancy Trifecta.
Gold Rises to One Week High After Fed Rate Hike – Gold rose to a one-week high on Thursday as the Federal Reserve raised interest rates amid growing concern that inflation is stagnating. The Federal Open Market Committee on Wednesday raised rates for the third time in 2017 as expected, forecasting further rate hikes despite concerns over the slowing pace of inflation. Gold is sensitive to rising rates, which increase the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced. Gold was also bolstered by comments from U.S. President Donald Trump, who said he hopes to sign the tax reform bill “in a very short period of time.” The highly anticipated bill will cut corporate taxes from 20% from 35%, which investors believe would help companies invest more and boost the economy. Tepid inflation data has put pressure on the greenback, as investors lower their expectations for a faster pace of rate hikes next year.
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