Commodity Blog

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Will Oil & Metals Climb? Stabilization of Oil; Cap on Gold Sales

August 7, 2009 at 20:35 by Vladimir Vyun

Commodities from oil to copper tend to gain because of the world economy recovery. Commodities jumped 15 percent this year as countries worldwide spur their economies and companies cut investment in mines and oil rigs. The world economy will grow 2.5 percent in 2010 according to the International Monetary Fund. Crude oil increased 60 percent this year to $71.23 per barrel on the New York Mercantile Exchange. The London Metal Exchange index of six metals jumped 67 percent to 2,880.

Crude oil stabilized as U.S. job losses slowed and the unemployment rate dropped. U.S. stockpiles decreased last week as demand rose. The jobless rate dropped to 9.4 percent from 9.5 percent. September delivery for crude oil gained $0.09 to $72.03 per barrel by 11:33 on NYMEX.

The European Central Bank and 18 other banks agreed to a five-year cap on gold sales in attempt to prevent gold dumping. European central banks agreed to sell no more than a combined 400 metric tons of the metal a year through September 2014. As the International Monetary Fund didn’t sign this agreement and have plans to sell 403 tons from its reserves there is possibility that Chinese, Russians or another central bank would buy the 403 tons of IMF gold in one go. Delivery for gold in London dropped 0.8 percent to $955.92 per ounce as of 15:14 local time today.

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