SHANGHAI, Sept. 25 (SMM) – Risk aversion grew worldwide on German automobile sector woes and massive layoffs by US Caterpillar. European and US stock markets tumbled. Fed Chair Janet Yellen’s statement bolstered the US dollar. Gold prices soared 2%, the biggest one-day gains in eight months. Commodity prices rallied.
Janet Yellen reiterated the likelihood of a Fed interest increase later this year, boosting the US dollar to claw back intraday losses. The euro surged before falling back.
Gold prices surged to USD 1,154.66/oz due to a slower growth in the US dollar and falling stock markets. Poor durable goods orders in the US are also behind the surge in gold. US Commerce Department reports August durable goods orders fell 2.0% in the US, the biggest monthly drop since March. This enhanced risk aversion and in turn pushed up gold prices. Strong demand from India and China also drove up the metal.
Crude oil prices closed up 1% due to shrinking inventories. LME base metals prices rallied across the board.