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Investors Seek Relief in Mendeleev Table
Gold and silver prices surged over 10 percent yesterday, hitting the abrupt-growth records of many years. The crude oil prices are rising again. The analysts attribute the boom on primary markets to panic-stricken investors that pull money out of financial market to invest in precious metal and commodities. The gold rally might end once the financial turmoil in the U.S. is over, the analysts warn.
Commodities markets boomed yesterday after the decline of the recent few months. The prices were going up for all raw, non-ferrous metals and for some food products. “The investors set to aggressive transfer of the capital to tangible assets to hedge against the financial risks. The yesterday’s boom on all commodities markets is quite explainable. Big hedge funds invest in the market, where they are accustomed to work, which they understand,” said Pavel Shelekhov from Kapital Investment Group.
The last straw was the declared bankruptcy of AIG. “When the FRS announced that it would sponsor AIG, taking money from the sale of government bonds, i.e. actually through minting money, the investors reasoned the dollar would depreciate and set to withdrawing capital from the dollar assets,” explained Andrei Krupnik from Renaissance Capital.
The Dollar Index (spot) that reflects fluctuations in the U.S. exchange rate to the basket of six leading currencies fell 1.2 percent yesterday. The dollar depreciated 1.6 percent to euro on the same day. The general nervousness on the market fueled demand for ultra-conservative assets – gold and silver prices soared more than 10 percent Thursday.
What’s more, the crude oil prices resumed their growth after the break of several months. The Brent futures rose $5.6 (+6.3 percent) to $94.84/bbl yesterday despite the $10 loss of two previous days. The reasons are the surge in speculative demand coupled with the reduction in U.S. stockpile of crude oil and petroleum and the apprehended potential decline in supplies of Nigerian oil. There, the militants exploded one of the key pipelines in the southern part of the country.
www.kommersant.com
All the Article in Russian as of Sep. 19, 2008
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