Commodities mixed ahead of FOMC decision
Gold and oil are moving in different directions in the marketplace this afternoon (September 13th) ahead of the crucial Federal Open Market Committee (FOMC) announcement.
Rounding off two days of talks, chairman of the Federal Reserve (Fed) Ben Bernanke will state what - if any - action he and his colleagues are going to take with regards to stimulating the world's largest economy.
It is widely believed that either today, or in the near future, the central bank will embark upon a third round of quantitative easing (QE) or some other fresh monetary stimulus package.
QE historically has a negative impact on the dollar and therefore commodities that are considered dollar-denominated - such as gold and oil - thrive when a period of bond purchases is announced.
However, while oil is prospering today in the marketplace, gold investors appear to be less enthusiastic.
At 15:10 BST, Brent Crude Oil Futures were higher by 0.8 per cent to a value of $116.3 per barrel, while West Texas Intermediate Crude Oil Futures advanced 1.4 per cent to $98.20 per barrel.
Conversely, Forex Gold was 0.7 per cent lower to $1730.50 per ounce and Dubai Gold Futures were not budging from $1730.50 per ounce either.
The dollar is mixed across the board, holding firm versus the pound at $1 for every £0.620 and gaining marginally against the Chinese yuan renminbi to $1 buying 6.331 yuan.
Mr Bernanke is expected to speak at just after midday local time from Washington DC to explain what measures he and the rest of the FOMC have opted to implement in order to stimulate the US economy, but in recent weeks the chairman has reiterated his concerns for matters such as unemployment in the US and poor manufacturing figures.
In addition to the possibility of embarking on more quantitative easing, the FOMC is also expected to keep benchmark interest rates at near-zero levels until 2014 at the earliest.
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