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Commodities Under Pressure by Outlook for Fed Tampering

November 19, 2013 at 3:36 by Vladimir Vyun

Commodities were under pressure today as traders speculated that the Federal Reserve may tamper its monetary stimulus soon. Previously, there were talks that the Fed is going to delay tampering, but recent comments of central bank members changed the view. Philadelphia Fed President Charles Plosser said that the US central bank needs to set a definite size for asset purchases and stop buying after reaching the limit. New York Fed President William Dudley voiced hope for stronger economic recovery in the United States.

The general market sentiment was mildly optimistic as China announced liberal reforms. Yet concerns about future Fed policy did not allow raw materials to rally. On top of that, the week started with housing report from the USA that was worse than expected. The National Association of Home Builders Housing Market Index stayed at 54 in November, while investors anticipated an increase to 56.

Gold December futures were up $1.5 (0.12 percent) to $1,273.8 per troy ounce as of 3:30 GMT on COMEX today after dropping 0.4 percent to $1,270.9 per ounce yesterday. Contract for WTI crude oil declined $0.09 (0.1 percent) to $92.94 per barrel on NYMEX. March copper lost $0.011 (0.35 percent) to $3.1495 per pound.

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