Gold is stuck in a channel between $1,575 and $1,600, with consolidation remaining the name of the game. Bulls were encouraged somewhat yesterday by talk from the presidents of the San Francisco, Chicago and Boston Federal Reserve banks, all of whom underscored their support for dovish Fed policies. The dollar came under selling pressure following this news, while precious metals recorded modest gains. Interestingly, Jesse’s Café notes that the St Louis Fed has started tracking London gold prices as part of its Federal Reserve Economic Data (FRED) series. So officialdom is not quite as uninterested in the yellow metal as they would have you believe.
These comments from Fed officials partially offset bearish news from elsewhere in the world. Spanish interest rates once again spiked higher, while falling Japanese machine tool orders and pessimistic growth forecasts for Vietnam and Hong Kong also added to the sense of pessimism about Asia. Chinese inflation fell 0.6% May to June, the biggest drop in two years, though this will allow the People’s Bank more wiggle room in terms of stimulus efforts.
Back in America meanwhile, the Fed’s efforts to boost inflation are receiving support from a non-conventional source: in the form of the vicious drought that has recently gripped the lower sections of the Midwestern corn belt. WSJ reports that corn prices are just cents away from the nominal record of $7.9975 a bushel reached in June 2011, when prices were high owing to worries about floods. Soybeans hit a record high of $16.65 a bushel yesterday. Keep on eye on food prices over the coming months.
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Soft Commodities Higher On Midwest Harvest Fears
Published 07/10/2012, 08:25 AM
Updated 05/14/2017, 06:45 AM
Soft Commodities Higher On Midwest Harvest Fears
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