Softer US Support Higher Gold Prices While Crude Prices Edge Lower
ICM Brokers | Oct 21, 2014 03:29AM ET
Crude Oil
Crude prices edged lower in choppy trading on Monday due to ongoing concerns that the world is awash in crude at a time when demand remains soft. Crude slips on global supply concerns Crude slips amid ongoing concerns that globe remains awash in crude while demand softens Bottom fishing brought the commodity in and out of positive territory at times. Oil prices fell due to ongoing concerns that global supply far outstrips demand, with OPEC members Saudi Arabia, Kuwait and Iran recently hinting at the need to get used to current prices and leave output quotas on unchanged. The oil cartel will hold its next biannual meeting in Vienna on Nov. 27. Elsewhere, Germany’s Bundesbank reported that the country’s economy barely grew in the third quarter, as industrial output slowed and business sentiment deteriorated, which pressured prices lower on concerns a more sluggish European economy will consume less fuel and energy going forward.
GOLD
Gold moved higher on Monday after slumping European stocks sparked safe-haven demand for the precious metal. Gold gains on dipping global stock prices Slumping European stocks give gold prices a boost A softer dollar supported prices as well, as the two assets tend to trade inversely with one another. European stocks fell on Monday after German business software maker SAP cut its 2014 operating profit forecasts, which bolstered gold's appeal as a safe haven during times of market turmoil. Germany’s Bundesbank reported earlier the country’s economy barely grew in the third quarter, as industrial output slowed and business sentiment deteriorated. In its monthly report the German central bank said that while the euro zone’s largest economy was unlikely to enter a recession the economic outlook for the fourth quarter was cautious. A weaker dollar boosted gold futures as well. The dollar softened against many major currencies earlier on concerns that even though the Federal Reserve is seen closing its monthly bond-buying program next week, rate hikes may come later in 2015 than once anticipated to make sure cooling European and Asian economies won't dampen U.S. recovery.
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