Saturday, September 15, 2012

Gold, oil end higher on Fed QE3, amid unrest in Middle East and North Africa

Pdf 2:35 pm by Carrie White

Gold futures ended higher Friday, as the yellow metal continued to benefit a day after chief Ben Bernanke unleashed a program to buy US$40 bln of assets per month until the U.S. economy shows clear signs of recovery.

The central bank extended the ultra low federal funds rate through at least mid-2015 and said it will keep "Operation Twist" in place. This policy consists of swapping short-dated securities for longer-term securities, as well as reinvesting the proceeds of maturing securities, so the central bank will be adding $85 billion of long-term securities each month through the end of the year.?

Global equities rallied on the back of the news.?

Gold for December delivery rose 60 cents to settle at $1,772.70 an ounce on the Comex division of the New York Mercantile Exchange, its highest in nearly seven months.?Gold closed up 1.9% for the week.?

The news of the bond-buying program provided a boost for gold, which benefits from fears of currency debasement and is seen as a safe haven.?

Oil futures on Friday also rose to $100 a barrel for the first time since May and closed the session not far below this level.?

Crude for October delivery ended up by 69 cents to $99 a barrel, as unrest in the Middle East and North Africa also sparked worry about supplies, with demonstrations this week in Libya, Egypt and Yemen taking place against a video considered an insult to Islam.

Crude had a weekly gain of 2.7%.

Source: http://www.proactiveinvestors.com/companies/news/34756/gold-oil-end-higher-on-fed-qe3-amid-unrest-in-middle-east-and-north-africa-34756.html

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