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Gold Drops Ahead of FOMC, Oil Falls as OPEC Maintains Output

December 15, 2014 at 19:35 by Vladimir Vyun

Gold sank together with other precious metals as market participants continue to anticipate an interest rate hike from the Federal Reserve in the near future. The Fed will conduct a monetary policy meeting later this week, and market analysts speculate that the central bank may drop the mention of keeping borrowing costs low “for a considerable time.” If it is the case, metal prices will likely drop further. February futures for delivery of gold sank 1.43 percent to $1,205.00 per troy ounce as of 19:13 GMT on COMEX today. March contract for silver tumbled as much as 3.65 percent to $16.44 per ounce.

Prices of crude oil declined too as the Organization of Petroleum Exporting Countries refuses to cut production. Major members of the organization, including the United Arab Emirates, are willing to tolerate falling prices even if the decline continues. UAE Energy Minister Suhail Al-Mazrouei said:

We are not going to change our minds because the prices went to $60 or to $40. The market will stabilize itself.

As conflicts in Ukraine, Syria and Iraq did not result in supply disruptions, traders are confident that there will be plenty of oil on the market. Such sentiment is bearish for prices. January WTI crude oil slumped 2.42 percent to $56.41 per barrel on NYMEX today. Futures for Brent crude lost 0.89 percent to $61.30 per barrel on ICE.

If you have any questions and comments on the commodities today, use the form below to reply.

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