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Gold & Silver Rally for Second Day, Crude Oil Extends Losses

May 18, 2012 at 19:29 by Vladimir Vyun

Gold and silver climbed today for the second day on speculation that the Federal Reserve would stimulate the economy, boosting demand for the precious metals as a hedge against inflation. Minutes of the Fed policy meeting showed that some policy makers were considering additional stimulus. There were quite a few negative macroeconomic reports from the United States this week, giving the Fed an excuse to perform quantitative easing. Analysts warn against becoming bullish on the metals though, as just before yesterday both gold and silver had reached a lowest level this year. The rally may be in truth just a bounce on a bearish market. Gold rallied from $1,573.70 to $1,585.60 per ounce as of 19:06 GMT today on COMEX, while yesterday it surged 2.5 percent, demonstrating a biggest jump since October. Silver price was up from $28.03 to $28.59 per ounce.

Crude oil extended its losses today as concerns that the US economy is slowing added to worries about the situation in the European Union and in Greece particularly. The manufacturing index of the Federal Reserve Bank of Philadelphia unexpectedly fell from 8.5 in April to -5.8 in May. The US leading indicators dipped 0.1 percent instead of rising as was expected. June futures for delivery of crude oil slipped $0.96 to $91.60 per barrel on NYMEX. Brent crude sank from $106.98 to $106.40 per barrel (the lowest settlement since December 21) before rebounding to $107.30 on ICE today.

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