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Oil & Precious Metals Advance, Rally in Danger from Fed

September 11, 2013 at 22:11 by Vladimir Vyun

Crude oil and gold advanced today, rebounding from the previous decline (though gold retreated yet again right now). Market analysts speculated that the commodities rallied as the falling prices attracted traders. The decline was caused by the possibility of a peaceful resolution of the tensions between the United States and Syria. Russia stepped in, offering to control usage of Syrian chemical weapons. Chances for a diplomatic end to the heated situation removed risk premium from the energy and precious metals markets.

Not many specialists think that the current rally is sustainable, considering that the Federal Reserve will meet next week. It is widely believed that the Fed will perform some kind of quantitative easing tampering and such prospects are bearish for raw materials. The theme of Syria is at the news headlines right now, but market participants will likely turn their attention to the possible QE reduction yet again as the date for the policy meeting will be coming closer.

October futures for delivery of WTI crude oil advanced $0.17 (0.16 percent) to $107.56 per barrel as of 22:05 GMT on NYMEX today. December contract for gold slipped $0.2 (0.01 percent) to $1,363.8 per troy ounce on COMEX, erasing the previous small rally.

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

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