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Gold at 2-Month High; Correction in Oil

August 6, 2009 at 17:54 by Andriy Moraru

Speculation that the Bank of England is keeping the monetary policy unrestricted with the rates at the historical lows busted the prospects for higher inflation and thus helped the gold to climb up to 2-month high level today. Britain’s central bank increased its bond-purchasing program, which means that more pounds will be printed. It also left the key policy interest rate unchanged at 0.5 percent today. December gold futures peaked at $973.70, gaining $7.40 (0.8 percent) on NYMEX.

The unexpected strengthening of the U.S. dollar provoked a daily correction movement in the crude oil today. Disappointing quarterly reports by some of the large U.S. companies eliminated the market optimism pushing traders out of commodities into a safer dollar. Growing commercial crude oil inventories in the United States also press on the oil prices. Analysts say that currently there are more reasons to be bearish on oil than bullish. September futures for brent fell by $0.87 (1.2 percent) to $71.10/barrel as of 10:53 on NYMEX.

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