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Gold Moves Higher on a Weaker Dollar

“Gold gained for a second day in New York before European Union leaders hold a summit this week amid speculation Spain will move toward seeking financial assistance.

Germany is open to Spain seeking a precautionary credit line from Europe’s rescue fund, two senior German coalition lawmakers said, prompting speculation that the Iberian nation may take the aid and help contain the euro-zone’s debt crisis. The euro rose to a one-month high against the dollar before trading up 0.5 percent. The U.S. Dollar Index, a gauge against six counterparts, fell for a second day, dropping 0.5 percent.

“Gold and the precious complex have been held afloat overnight and this morning by a stronger euro,” Edel Tully, an analyst at UBS AG in London, wrote today in a report. “Gold’s ability to stay buoyed today will be dependent on foreign exchange moves and risk appetite.””

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Brent Rises on Mid East Tensions, WTI Remains Unch

 

Brent crude traded at the highest premium in a year to futures in New York amid concern that supplies from the North Sea and the Middle East will be disrupted and speculation U.S. stockpiles are increasing.

Brent in London climbed to as high as $24.28 a barrel more than West Texas Intermediate as WTI remained little changed near a three-day low. The European Union tightened sanctions onIran’s energy exports, while Nexen Inc. (NXY) declined to give a specific date for resuming its Buzzard field in the North Sea after maintenance. Crude inventories in the U.S., the world’s biggest oil user, rose 1.5 million barrels last week, according to a Bloomberg News survey before a government report tomorrow.

“The Brent market has been inflated by declining North Sea production and hiccups in that production, like the recent problems with Buzzard,” said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London. “The price of WTI is also being distorted by the huge increase in U.S. domestic oil production.” ”

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Core PPI Spells Trouble for Gold and Silver

“This up-leg in gold and silver was first initiated by speculation about QE3, and then gathered steam after QE3 was announced. The announcement of the bond buying program from the European Central Bank (ECB) helped stoke the fires of the precious metal bulls.

Gold and silver investors should take notice of how the metals reacted to the announcement of Producer Price Index (PPI) data by the U.S. Bureau of Labor Statistics (BLS).

The BLS releases PPI separately for finished goods, intermediate goods and crude goods. For each processing stage, the BLS releases data for total PPI, foods PPI, energy PPI, and PPI except foods and energy.

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Black Gold Pares Losses to Trade Unch Ahead of U.S. Open

 

“Oil traded close to a four-day low in New York amid concern that the global economy is weakening, threatening to curb demand for fuels.

Futures slid as much as 1.1 percent. Bank of Israel Governor Stanley Fischer said the world is “awfully close” to a recession, adding to concern raised at annual meetings of the International Monetary Fund last week. Hedge funds and other speculators trimmed bets that oil will rise, data from regulators showed on Oct. 12. Iran reiterated an offer to suspend domestic production of medium-enriched uranium before European officials meet to discuss tighter sanctions on the Persian Gulf country.”

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Black Gold Jumps Again on Mid-East Tensions

“Oil advanced in New York amid concern that escalating tensions between Syria and Turkey may disrupt supplies from the Middle East. Brent’s premium to West Texas Intermediate crude widened to the most in almost a year.

Futures rose as much as 1.2 percent after Turkey seized cargo on a Syrian passenger plane and on unconfirmed reports of the discovery of weapons parts and military communications gear. The Middle East accounts for about 33 percent of world oil supplies, according to BP Plc. The American Petroleum Institute said yesterday that U.S. crude inventories rose 1.6 million barrels last week, and the Energy Department is forecast to report a 1.5 million barrel gain for the period today.

“The unrest between Syria and Turkey is a lit powder keg,” said Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark, who predicts Brent crude may advance to $120 a barrel this month. “The general supply-demand situation is balanced, walking a tightrope between weaker growth projections and the risk of supply disruptions.”

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Copper Consumption Estimated to Fall 8.5% in China, First Drop Since 2008

“Copper consumption in China will contract this year for the first time since 2008 as demand falters and inventories climb in the largest user, before rebounding in 2013, according to Simon Hunt Strategic Services.

Consumption will drop about 8.5 percent to 5.6 million metric tons in 2012, said Simon Hunt, chief executive officer of the Weybridge, Surrey-based consultancy, which compiles analysis for users and fabricators. Next year, usage may grow 5.6 percent to 5.9 million tons, Hunt said in an interview in Singapore after visiting China for two weeks last month.

Hunt’s assessment adds to signs that China’s slowdown is hurting demand for commodities. Copper, used in wires and cables, helps set the pace for other base metals and the drop in China’s consumption may hurt prices and cut profits at mining companies including Freeport-McMoRan Copper & Gold Inc. (FCX) Copper rose 6.8 percent last quarter as central banks in the U.S., China, Japan and Europe expanded stimulus to try to revive economic growth.”

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Another Reason to Consider a Silver Lining in Your Portfolio

I’ve been a gold bug since ’99 and recently over the past few years have turned my attention to silver. Here is an interesting outlook on the consumption of silver by industry that may boost pricing beyond the common mantra of protection from central bank debasement of currency.

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The Dollar Continues to Gain Strength Causing a Sell Off in Gold and Other Commodities

“Gold fell for a second day in New York as some investors sold the metal after its rally to the highest in almost 11 months and as a stronger dollar curbed demand for an alternative investment.

The dollar climbed versus the euro as European finance ministers meet in Luxembourg today, while German Chancellor Angela Merkel visits Greece tomorrow for the first time since the crisis erupted. Gold futures reached $1,798.10 an ounce on Oct. 5, the highest since Nov. 9, before a report showed the U.S. unemployment rate fell to the lowest since January 2009.

“We’re seeing a stronger dollar which is translating into weaker gold,” Bernard Sin, head of currency and metal trading at bullion refiner MKS Finance SA in Geneva, said today by phone. “We’ve had a very good run-up. We’re seeing a bit of profit-taking.”

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A Natty Gas Boom to Come

“Energy companies are racing to export natural gas from the U.S. as they search for more-profitable markets amid a continent-wide gas glut that has depressed prices to the lowest levels in a decade.

A consortium including Exxon Mobil Corp.,XOM +0.56% ConocoPhillips Co.COP +1.10% and BP BP.LN +0.27% PLC said late Wednesday it is moving forward with plans to export natural gas from Alaska’s North Slope in a project that could cost as much as $65 billion. The long-awaited effort is expected to have a significant impact not just on Alaska and its economy, but also on U.S. construction and manufacturing companies that would supply steel and other materials for an 800-mile pipeline and the plant that would convert the gas into liquid for export on tankers.”

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Gasoline Prices Expected to be Stubbornly High for the Foreseeable Future

 

“SAN FRANCISCO (AP) — The recent spike in gasoline pricesaround the nation is expected to wane slowly in coming weeks, butCalifornia may not be so lucky due to supply challenges fueled by refinery issues and pipeline outages, analysts said.

Throughout the state, the average price of a gallon of regular gasoline jumped 8 cents Thursday to $4.32 and was up 18 cents during the past week, according to AAA’s Daily Fuel Gauge.

Analysts said the average price of regular gas was poised to quickly soar past $4.37 a gallon — the high so far this year — after refinery outages and pipeline problems left California short on supplies.

The highest average price ever for regular gasoline in the state was $4.61 in 2008.

Among the recent disruptions, an Aug. 6 fire at a Chevron Corp. refinery in Richmond left one of the region’s largest refineries producing at a reduced capacity. A power failure in Southern California has affected an Exxon Mobil Corp. refinery, and a Chevron pipeline that moves crude to Northern California also was shut down.”

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Black Gold Bounces on Mid East Tensions and Hopes From the ECB Meeting

“Oil rebounded in New York after dropping the most in more than three months as tensions between Syria and Turkey fanned concern exports from the Middle East may be reduced.

Futures advanced as much as 0.8 percent as Turkey fired into Syrian territory for a second day and called for United Nations intervention. The euro gained against the dollar before a European Central Bank meeting, boosting the appeal of commodities. Oil plunged 4.1 percent yesterday after the Energy Department reported that U.S. crude production climbed to the highest level in more than 15 years while fuel usage decreased.

“Turkey-Syria jitters are adding to general concerns in the Middle East,” said Andrey Kryuchenkov, an analyst at VTB Capital in London, who correctly predicted crude would fail to advance last month. “There’s some buying on the lows after losses yesterday, and the greenback is also a touch lower.”

Crude for November delivery gained as much as 68 cents to $88.82 a barrel on the New York Mercantile Exchange and was at $88.78 at 11:43 a.m. London time. Futures dropped to $88.14 yesterday, the lowest settlement since Aug. 2. Prices are down 10 percent this year.

Brent oil for November settlement advanced $1.23 to $109.40 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $20.58 to WTI, up from $20.03 yesterday.”

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Black Gold Sees a Follow Through Rally Off Yesterday’s U.S. Manufacturing Data

“Oil traded near the highest close in a week after a measure of U.S. manufacturing beat economists’ forecasts and before a report forecast to show shrinking fuel supplies in the world’s biggest consumer of crude.

Futures were little changed in New York after advancing for a third day yesterday. The Institute for Supply Management’s U.S. factory index increased to 51.5 in September, exceeding the median forecast of 49.7 in a Bloomberg News survey. Crude supplies in the U.S. probably gained last week, while gasoline and diesel inventories shrank, according to a separate survey.

“We’ve seen a bounce off recent lows, and I think the primary motivator was the ISM figure,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “It points to the fact that we’re seeing what looks like an improvement in the rate of growth in the U.S. economy.”

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