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Copper Gains, Oil Falls After Bernanke Speech

October 15, 2010 at 23:25 by Vladimir Vyun

Copper went up today on speculation that demand for the metal would rise as the Federal Reserve stimulate the US economy. The Chairman Ben Bernanke said today that the Fed should increase asset purchases to bolster the economy as inflation is too low and unemployment rate is too high. December futures for copper delivery rose $0.0235 (0.6 percent) to $3.8390 per pound as of 13:18 on COMEX. The gain this week was 1.7 percent, being the fifth straight weekly gain, the longest rally since August 2009.

Crude oil dropped to the two-week low today as the stronger dollar decreased the attractiveness of commodities as an alternative asset. The Dollar Index rebounded today on perception it would have hard times to get anywhere lower. Even Bernanke’s speech, which reinforced the outlook for quantitative easing, hasn’t been able to drive the dollar lower. November delivery for crude oil slid $1.44 (1.7 percent) to $81.25 per barrel on NYMEX.

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