Traders retreated for safer havens on Tuesday, as they awaited signals from the Federal Reserve meeting that began at 8:15 a.m. The dollar climbed, pushing down the prices of a wide array of commodities.
Copper slipped 1.3 percent by 12:30 p.m. EST, down to $3.31 per pound. Gold, meanwhile, dropped $1.30 to trade at $1,201.30 per troy ounce, while silver managed to eke out a meager 0.2 percent gain to $18.285 per troy ounce.
Oil, another commodity which tends to inversely track the dollar, slipped as well. West Texas Intermediate light, sweet crude oil futures declined 1.3 percent to $80.42 per barrel.
Traders are basically waiting to see what kind of actions the Fed will take, and whether the central bank will engage in any form of quantitative easing. Comments about the health and direction of the economy are widely expected to be sober and essentially pessimistic, given the declining pace of job creation, growth and productivity.
Political gridlock in Washington is making it increasingly difficult for those politicians who favor further stimulus to get their proposals through, while significant austerity measures don’t appear to be on the table either.
That means external support for current market levels will have to come from the Fed – and no one is quite sure how strong their action will be.
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