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Gold Rallies on Threat of Deflation, Natural Gas Loses Value

December 13, 2013 at 23:45 by Vladimir Vyun

Gold rallied today, following yesterday’s big slump, as traders were wondering if the Federal Reserve is going to scale down its asset-purchase program this month. The Producer Price Index was down 0.1 percent in November, suggesting that the US economy is endangered by deflation, not inflation. It makes monetary tightening unwarranted, meaning that the Fed may refrain from changing monetary policy next week. February futures for delivery of gold advanced $9.7 (0.79 percent) to settle $1,234.6 per troy ounce on COMEX today.

Natural gas declined today as forecasters promised mild weather in the United States. Previously, the commodity was rising on forecasts of cold weather. Experts say that gas was much overbought and should fall further if temperature will indeed return to norm. January contract for delivery of natural gas lost $0.06 (1.32 percent) to $4.35 per million British thermal units on NYMEX today.

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