Gold News: Commodities Rally Ahead Of Fed Meeting
Gold News
Investors have been moving back into commodities over the past couple of weeks, especially crude oil. Signs that the global economy is healing and a pause in the US dollar’s rally has caused commodity prices to increase. The S&P GSCI Index, which tracks the prices of 24 commodities, has risen more than 11% over the past month, reaching close to its highest level since December.
This has occurred ahead of the Federal Reserve’s two-day meeting that begins on Tuesday. The Fed will discuss when to raise interest rates along with other things, and are expected to back off of attempting to raise rates by June. The dollar’s rally was halted after the last meeting, when it first appeared likely that it would push back an interest rate hike, possibly until September. This has allowed commodities like gold to rally, which has bounced back from a five-week low last week.
Oil prices have moved much higher over the last month, jumping 32% since March. A record drop in rigs drilling for crude reduced production as demand actually increased, leading to speculation that the commodity might have reached a bottom. The price has also been pushed higher by the Yemen conflict, where a Saudi-led coalition attacked a rebel militia group and troops in a southern port city of the country. Concern that the conflict could spill into Saudi Arabia, which would decrease supply, would send prices higher.
