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Precious Metals Tumble on Fed, Copper & WTI Oil Follow

December 19, 2013 at 0:12 by Vladimir Vyun

Precious metals took a hard hit today after the Federal Reserve reduced the size of its monthly asset purchases from $85 billion per month to $75 billion. Traders were speculating for a long time whether the Fed would taper its stimulus program this year. There were strong arguments against such course of action, but US policy makers decided that it was prudent to reduce stimulus. Outgoing Chairman Ben Bernanke mentioned reasons to believe that inflation may accelerate next year, but it was not enough to help gold and silver. February futures for delivery of gold sank $18.3 (1.48 percent) to $1,216.7 per troy ounce as of 23:53 GMT on COMEX today. Contract for delivery of silver in March lost as much as $0.37 (1.86 percent) to $19.69 per ounce.

West Texas Intermediate grade of crude oil and copper followed precious metals in decline, but losses were nowhere as big as those demonstrated by gold and silver. Moreover, Brent grade of crude managed to surge after the policy announcement. Analysts believe that this happened because traders interpreted stimulus tapering as a sign of confidence in economic growth. And growth means higher demand for fuel and industrial metals. March contract for copper was down $0.0035 (0.11 percent) to $3.3180 per pound today. January futures for WTI crude oil fell $0.3 (0.31 percent) to $97.5 per barrel on NYMEX. February Brent crude climbed $1.19 (1.10 percent) to $109.53 per barrel on ICE.

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