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Commodities Under Pressure from QE Tampering Talks

August 6, 2013 at 5:35 by Vladimir Vyun

Commodities were under pressure today as traders resumed speculations that the Federal Reserve will slow pace of its bond purchases. The Fed policy announcement last week hushed such talks, suggesting that the central bank will not change its policy anytime soon. Nonfarm payrolls reinforced such outlook. But speculations about quantitative easing tampering resurfaced yet again.

Market participants bet on stimulus reduction as fundamental data from the United States continues to be generally good (excluding the recent nonfarm payrolls report, of course). Institute for Supply Management reported yesterday that Non-Manufacturing Purchasing Managers’ Index climbed from 52.2 percent in June to 56.0 percent in July. Positive indicators support the case for smaller stimulus program and this hurts prices for most raw materials. Even crude oil and gold, which were moving in opposite directions for a long time, now are heading in tandem to the downside.

September futures for delivery of WTI crude oil fell $0.11 (0.1 percent) to $106.45 per barrel as of 5:26 GMT on NYMEX today. December futures for gold slipped $11.3 (0.87 percent) to $1,291.1 per troy ounce on COMEX. September copper lost $0.007 (0.22 percent) to $3.161 per pound.

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