Gold rises after unexpected US CPI drop

At the closing bell on Wednesday, the Dow Jones Industrial Average stood at 16,736.76, up 136.91 points (0.82 per cent). France’s CAC 40 rose 1.2 percent to 4,622.72 and Germany’s DAX climbed 0.8 percent to 10,272.18.


Progressive activists opposed to a Federal Reserve interest rate hike overwhelmed the Fed’s public comment system on Monday in a last-minute effort to sway the central bank before it announces its decision on Thursday.

The reason why Yellen will probably take the plunge this time is simple: having threatened to raise rates for more than a year after ending quantitative easing, the Fed’s credibility will be at stake if she again waffles. Oil prices jumped about 3 percent after an unexpected drawdown in US stockpiles.

The share of people in the labor force, known as the participation rate, has risen about 2 percent among blacks, while it is up about 1 percent for Hispanics. After all, the precise conditions the Fed is looking for may never come, and in the meantime, the global debt burden will likely only grow.

But volume was thin, as most long-term investors remained on the sidelines ahead of Thursday’s US Federal Reserve policy meeting, which may end months of speculation on when the Fed will raise interest rates for the first time in almost a decade.

Inflation has been held down by two key issues: the strong US dollar and the precipitous drop in energy prices over the previous year.

The anxiety gripping investors stems in part from concern that once the Fed starts raising its key rate, other rates – for mortgages, vehicle loans, business borrowing – will eventually rise.

“What it means for the economy, it really is not that significant”, said Dean Croushore, chairman of the economics department at the University of Richmond in Virginia and a former Fed economist.

Prices paid by American households declined in August as cheaper gasoline helped keep increases below the objective of Fed policymakers, a government report showed Wednesday.

U.S.-listed shares of Anheuser-Busch InBev were up 7.5 percent at $116.04 after the world’s biggest beer maker approached rival SABMiller about a takeover.

With two days to go, all we can do is wait as the tension builds and stocks remain range bound. Earlier, the price touched $1,123.70, the highest since September 9.

S&P said it was lowering the rating to A-plus from AA-minus because weak economic growth makes it less likely that the government can quickly improve the nation’s fiscal health.

JAPAN DOWNGRADE: Standard & Poor’s lowered Japan’s sovereign credit rating and said it doesn’t expect Prime Minister Shinzo Abe’s economic revival strategy to reverse deteriorating government finances within the next three years.


The S&P 500 gained 1.28 percent to 1,978.09 and the Nasdaq Composite Cadded 1.14 percent to 4,860.52. USA crude CLc1 settled up $2.56, or 5.74 percent, at $47.51 per barrel.

Stocks climb as investors count down to Fed rate decision