OIL SHUTDOWN LOOMS IN NORWAY; FED OFFICIALS SHARE OUTLOOK ON QE3
The Gold price took a small jump Monday once investors began to take advantage of the yellow metal’s price dip, but it remained steady in the afternoon. The Gold price spiked due to rising crude oil prices and a weaker American dollar. Daniel Smith, an analyst with Standard Chartered, said, “The main thing that says to me is when inflation is poor, it encourages China to cut rates and stimulate the economy, and I see that as good news for risk appetite. Gold carries the idea that it’s a safe haven. But in reality, when everything else moves up, when liquidity improves, it tends to lift everything at the same time.”
Crude oil prices were on the rise with news that Norway’s oil companies are preparing to lock out striking workers over various labor disputes. This would shut down all of Norway’s oil and gas production over a period of days. Norway supplies a reported 11 percent of Europe’s oil and 25 percent of its natural gas. This not only will affect Europe but could increase energy prices globally. The strike is unlikely to last for very long, as Europe’s fiscally stressed nations would likely bring extreme pressure on Norway to prevent higher energy prices.
Federal Reserve policymakers laid the foundation Monday for what may be the next round of quantitative easing. Top officials seem to share the same outlook on how further easing is needed to boost the American economy. San Francisco Fed President John Williams said, “My baseline forecast is basically at that point where we are really not making progress over the next year, year and a half on our goals,” he said. “In that kind of condition, I would say that additional stimulus is needed.” He said that would best be done by purchasing housing backed securities.
At 5:05 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,588.90, Up $8.50.
- Silver, $27.38, Up $0.39.
- Platinum, $1,445.10, Down $4.40.
- Palladium, $583.60, Up $2.30.
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