A thunderous month-long rally was ended this week as traders booked year-end profits and pondered a government proposal to curb speculation in the commodity markets. Uncertainty regarding US stimulus measures, increased global industrial demand for gold, and a military altercation between the Koreas sparked the yellow metal's most recent rally which culminated in an all-time record high of $1,432.50 a troy ounce set on December 7.
Gold futures fell $15 a troy ounce this week as some traders lightened up ahead of the New Year while still others began to mull over a proposal put forth by regulators that could potentially cap the amount of positions that any single entity can hold. February gold futures were trading at $1,371 on Friday afternoon.
China to Buy US Beef
A beef export agreement has been reached between the US and China. China has banned US beef since the mad cow disease episode in 2003. China will now allow beef cattle under 30 months old to be imported, though the details still need to be worked out.
China opening markets for US beef could prove to be a huge factor, just as China's buying of grains, metals, and petroleum has changed the economic outlook throughout the world. Their appetite for meat could have a magnifying impact on US grain demand, since each pound of beef production requires many pounds of corn. The US is the world's largest producer and exporter of corn.
The upward impact on beef prices is not expected to be seen short-term, but will be a possible long term factor -- good for ranchers, but not necessarily for grocery shoppers.