Gold futures probing $800 level Gold futures traded close to the psychologically important $800-an-ounce level on Monday, gaining just days before a U.S. interest-rate decision as traders stepped forward to buy the popular inflation hedge. With the dollar at a new record low against the euro and a 33-year swoon against the Canadian dollar, gold futures rose as high as $798.30 an ounce, a new 27-year high. Gold has climbed sharply from the $650-an-ounce level back in mid-August. "This positive trend is primarily due to the persisting weakness of the U.S. dollar," said Eugen Weinberg, an analyst at Commerzbank. Expectations are growing that the Federal Reserve will cut interest rates by at least a quarter of a percentage point on Wednesday, which has been weighing on the greenback of late.
At the current rate of increase gold will be at $950 by year-end While my own opinion - and that of a number of others - is that the movement of the gold price is primarily inversely related to the strength of the US dollar, commodity aspects also come into play on the margins. In other words, should jewellery demand in particular dry up, the gold price will suffer, but should jewellery demand remain strong, or increase, the additional marginal impact will help push the bullion price up sharply in times where other sources of supply may actually be on the wane, or at best pretty well static.And the latter is what appears to be happening at the moment. Worries that higher prices might dampen jewellery demand in India, where sales at this time of year tend to be particularly strong due to the Diwali festival and the traditional wedding season, are not yet apparent with price currently having little impact on sales.
US Dollar’s Days Numbered as Gold Price, Oil Show Continued Strength The Money Migration is turning into a Money Stampede. How can you avoid getting trampled? There is one simple way to explain the movement in global currency and commodity markets. A number of smart investors (including Jim Rogers, Marc Faber and others) hit on it a few years ago. What was it? That the US dollar was a dangerously flawed currency, the unbacked liability of a vastly over-extended government, and that the days of doing the world’s business in America’s currency were numbered. The trouble in a world of managed exchanged rates—a "dirty float" not a "free float"—is that all currency values are relative. The US dollar is weak against everything. The Aussie dollar is strong against most other currencies.
Fed likely to cut rates despite stellar growth In a delicious bit of timing, the Federal Reserve is poised to cut its overnight lending rate on Wednesday, just hours after the government is expected to report a second straight quarter of robust economic growth. Rate cuts and strong growth don't typically go together, but that just shows how odd the economic situation is. And it shows that the Fed is reacting more to what might happen than to what has already happened. The Federal Open Market Committee meeting and the first estimate for third-quarter growth aren't even the main events on the economic calendar for the week. That honor would go to the October payroll report, which will be released on Friday.
Oil Rises to Record Above $93 a Barrel Oil prices hit a new trading high above $93 a barrel Monday before falling back, propelled by news that Mexico's state oil company was suspending about a fifth of its oil production due to a storm. The news that Petroleos Mexicanos, or Pemex, was to stop as much as 600,000 barrels of daily crude production came amid political tensions in the Mideast, a weak U.S. dollar and a tight supply outlook that had already pushed crude oil to record prices. The Pemex shut-in "is the one that has pushed prices above $93," said Victor Shum, a Singapore-based energy analyst with Purvin & Gertz. "This is on top of what has already been simmering." In addition, Vienna's PVM Oil Associates noted that "more bad weather could hit the region in the form of Tropical Storm Noel."
Which is worse: foreclosure or bankruptcy? Based on our mail, the financial squeeze that’s left millions of Americans falling behind on their mortgage payments doesn’t seem to be letting up. For some, that presents a stark choice: is it better to lose your house to foreclosure or file for bankruptcy protection? What is better on your credit report - foreclosure or bankruptcy? Neither option is going to be easy. Generally, a foreclosure will remain on your credit report for 7 years, while a bankruptcy remains for 10 years. But that doesn’t mean foreclosure is necessarily the better option, according to Ray Hooper, Education and Housing Director for the Consumer Credit Counseling Service of Greater Dallas, a non-profit agency that tries to help people facing foreclosure keep their homes.
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