Gold, Copper Fall

Ivaylo
30 Aug, 2006
Metals

As the energy market is retreating, there is less fear that there is going to be inflationary pressures. This, in turn, reduces the likelihood of any future Federal Reserve rate hikes. When inflationary fears subside, this also means an increased likelihood of an economic slowdown, thus reducing the need to resort to safe havens such as gold.

[R]5:00AM Gold retreats as weakness in crude oil continues.[/R]
December gold shed $4.80 to $619.10 a troy ounce on the NYME. September silver settled up 12.5 cents to $12.15 an ounce. October platinum dropped 20 cents to $1,227.50 an ounce, while September palladium slipped $4.70 to $336.75 an ounce. Copper fell amid a general sell-off in commodities to a more than one-week low. Talks of a possible settlement of the 23-day strike at Chile''s Escondida mine also weighed on the market. Most-active December copper settled down 6.65 cents at $3.3840 per pound.

Crude oil fell to its lowest close in two months, dropping below $70 a barrel Tuesday as Tropical Storm Ernesto continued its path away from Gulf of Mexico oil platforms and as dropping U.S. consumer confidence stoked concerns that demand might slacken. The front-month October light, sweet crude contract on the NYME declined 90 cents at $69.71 a barrel. September gasoline rose 0.61 cent to $1.7892 a gallon and September heating oil shed 2.27 cents to 1.9432 a gallon. September natural gas rose 34.4 cents to finish at $6.816 a million British thermal units. On the New York Board of Trade, Arabica coffee futures for September ended up 0.10 cent at $1.0330 a pound. Futures on raw sugar in foreign ports for October ended down 0.25 cent at 11.88 cents a pound.