Oil prices and base metals headed slightly lower in what has turned out to be a volatile trading session yesterday. Commodities jumped Wednesday after the Fed cut the key rate to 1.0%. However the gains have been short lived as more evidence points to one of the deepest worldwide recessions in recent memory. Most economists give a formal definition of a recession when two quarters of GDP growth are negative and the first part of this equation rang true on Wednesday when it was announced that the GDP for the third quarter contracted by 0.3%. However, some have dismissed economists citing that the U.S. has been in a recession since the beginning of 2008 or even earlier.

Gold is trading around $735/oz., under some pressure from a recovery in the dollar in the last few days. AngloGold Ashanti, the world’s third-largest gold producer, is reviewing at least $200 million of investments and may sell assets as funding becomes more costly. “We’re tightening our belts,” said Mark Cutifani, AngloGold’s chief executive. Base metals gave back some of this week’s remarkable rebound, which has been driven largely by short covering.

In today’s currencies market, both the Euro and Sterling were losing to the dollar, shedding 1.6% and 2.2% respectively to $1.2707 and $1.608.

This entry was posted on Monday, November 3rd, 2008 at 11:04 am and is filed under Energy, Metals. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.