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Oil Rallies on Syrian Problem, Precious Metals Fail to Follow

August 27, 2013 at 23:41 by Vladimir Vyun

Oil gained today as tensions between Syria and the United States escalate. The USA indicated that it may perform a cruise missiles strike to prevent the Middle Eastern country from using chemical weapon. In response, the Syrian government said that its defenses are ready for an attack. All in all, Middle East became hotbed of war yet again and, as usual, this leads to higher oil prices. October futures for delivery of WTI crude oil rallied $0.57 (0.52 percent) to $109.58 per barrel as of 23:23 GMT on NYMEX today. Contract for Brent crude surged as much as $3.63 (3.28 percent) to $114.36 per barrel on ICE.

Precious metals attempted to follow the rally, but failed. One of the reasons for this were positive macroeconomic reports from the United States. All the data, including housing, manufacturing and consumer confidence indicators were good, supporting the case for stimulus reduction by the Federal Reserve in September. This does not bode well for commodities, including gold and silver. December futures for gold slipped $2.9 (0.2 percent) to $1,417.3 per troy ounce on COMEX today. Silver subtracted $0.1 (0.4 percent) to $24.6 per ounce.

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