Commodities Soar as Poor US Payrolls Spur Stimulus Bets
Commodities jumped today as poor US nonfarm payrolls spurred talks that the Federal Reserve will decide to initiate a third round of quantitative easing during its policy meeting next week. Payrolls showed growth of 96,000 jobs in August, less that the predicted 123,000. The unemployment rate managed to fall by 0.2 percentage point to 8.1 percent, but that did not prevent investors from betting on stimulus from the Fed.
Many analysts think that it is not likely that the US central bank will ease its policy so soon. Yet the Fed was continuously suggesting that high unemployment is the major concern and the poor employment growth figure increase chances that stimulating measures of some sort will be taken soon. QE would weaken the dollar and boost prices for raw materials, therefore the bad data affected commodities positively, not negatively.
Gold jumped from $1,690.13 to $1,737.38 per ounce, the highest close since February 29, as of 17:36 GMT on COMEX today, while silver surged from $31.98 to $33.59, the highest settlement since March 13. Copper advanced from $3.5195 to $3.6443 per pound, the highest spot price since May 11. Crude oil advanced from $94.86 to $96.18 per barrel on NYMEX today.
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