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Spot gold falls to six-month low of $1,562.90 an ounce

Gold
Spot gold took its fifth consecutive daily tumble Wednesday to $1,562.90 an ounce, plunking itself at its lowest price in six months.

The last time the precious metal was flirting with $1,550 was when it hit $1,562.30 on July 12. It then went on to reach a high of $1,888.70 on Aug. 22, as fearful investors fled from aftershocks of the U.S. debt downgrade.

The spike sparked speculation that the safe-haven commodity could breach the near-mythical $2,000-an-ounce threshold.

Those fantasies are now kaput, according to analysts — at least for the foreseeable future. The triple threat of a strong dollar, austerity programs in Europe and an overload of bullish investors has resulted in a “disconcertingly bearish concoction,” according to commodities analyst Dennis Gartman.

“Anybody who is long is under duress, anybody who is short is in control,” Gartman said of the gold situation. “There is something very serious going on.”

Throw into the mix the light volumes that are common during year-end trading and “it’s hard to tell what’s really going on this week,” said Matt Zeman, a metals trader with Kingsview Financial.
“It gets really goofy,” he said. “But the chart for gold doesn’t look healthy.”

Investors also tested gold’s $1,550 floor last week before the price briefly rebounded. But Zeman said the continuing downward pressure could eventually spark a sell-off of the metal.

“We may see it break wide open,” he said. “The best place to be in the gold market right now is on the sidelines.”

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— Tiffany Hsu

Photo: AP Photo / Sotheby's

Food prices will continue to rise in 2012, says USDA

Apples
Get ready for more high food prices going into 2012 –- the USDA is projecting that next year will bring an overall spike of 2.5% to 3.5%.

That’s less than the 3.25% to 3.75% boost that the Department of Agriculture is projecting for 2011. High commodity and energy prices along with soaring demand for food pushed up the value of items including ice cream, lettuce and bread.

Grocery store shoppers this year watched prices rise as much as 4.75% while diners in restaurants saw menu prices go up as much as 2.5%, with a surge near the end of the year.

As of last month, beef prices were up 9.8% compared with the same month last year. Pork prices were up 6.9% and poultry was 3% higher. With fewer fertile hens around, egg prices were 10.2% higher; dairy was up 8.7%.

The Japanese tsunami and earthquake in the spring pushed seafood prices up 5.9%. Fruits and vegetables also saw a bump, with apple prices up 9.6% year over year and potatoes up 12%.

Whole food prices could reach their strongest annual gains in more than three decades, National Restaurant Assn. economist Bruce Grindy wrote earlier this year. What comes next will depend on weather conditions, fuel prices and the value of the dollar, the USDA said.

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'Twelve Days of Christmas' list priciest ever at $101,119.84

Price of Thanksgiving dinner up 13%, biggest jump in two decades

-- Tiffany Hsu

Photo: Apples cost 9.6% more in November than they did a year ago. Credit: Jim Witmer / AP Photo / Dayton Daily News

'Twelve Days of Christmas' list priciest ever at $101,119.84

Ladies dnacing

Getting through “The Twelve Days of Christmas” with partridges and pear trees in tow will cost $101,119.84 this year –- the most expensive total ever.

True loves will have to dig deeper into their wallets to get into the holiday spirit, according to the annual “True Cost of Christmas” index from PNC Wealth Management.

Compiled based on prices of the 364 items listed in the classic carol -- with prices sourced from jewelry stores, dance companies, pet retailers and organizations such as the National Aviary in Pittsburgh -– the index is up 4.4%.

PHOTOS: Adding up the 12 days of Christmas

Birds were a pricey proposition. The cost of seven swans-a-swimming soared $700, or 12.5%, to $6,300 in the largest dollar increase out of the song’s collection of gifts.

A partridge is now 14.2% more expensive at $15. The two turtle doves cost $125 –- a 25% increase due to the rising cost of feed and availability that also hiked prices for heritage turkeys over Thanksgiving.

But the cost of French hens stayed steady, as did minimum wage for maids-a-milking, ladies dancing and lords-a-leaping. Entertainment fees for pipers piping and drummers drumming were up modestly.

The five gold rings were actually cheaper this year, as high prices for the metal drove down retail demand 0.8%.

The report, released on Cyber Monday, noted that buying all the items online would run a dedicated gift-giver $39,860 this year -– a 16.1% increase from last year due to high shipping costs.

Consumers have faced rising prices across the board this year. Shoppers are spending more on favorites such as peanut butter. Restaurant chains such as Panera Bread and McDonald’s have repriced some menu items. The cost of Thanksgiving dinner was 13% more expensive in 2011 than it was the year before.

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-- Tiffany Hsu

Photo: Ladies dancing. "Swan Lake" is performed at the National Theater of Cuba. Credit: Damon Winter / Los Angeles Times

Dow falls to five-week low as global gloom deepens

Trader1121
Investors signaled a lack of faith in markets nearly across the board on Monday as stocks and commodities fell on unrelenting fears about the global economy and financial system.

The Dow Jones industrial average closed with a loss of 248.85 points, or 2.1%, at 11,547.31, nearly a five-week low. The Dow now is back in the red year to date, off 0.3%.

The tone was set at the outset after it appeared that the congressional “super committee” on deficit reduction would fail to reach an agreement by Congress’ Wednesday deadline.

Given Europe’s financial crisis, the super committee’s stalemate was viewed as another sign of governments’ inability or unwillingness to deal with their spiraling debt loads.

“There is just no good news,” said Dave Rovelli, head of equity trading at brokerage Canaccord Adams in New York.

He said some of the selling in stocks stemmed from fear that the U.S. could soon face another downgrade of its bond rating. Shares worldwide plunged in early August after Standard & Poor’s cut the U.S. rating to AA+ from AAA.

Stocks fell sharply in Europe overnight as Spanish government bond yields jumped to new euro-era highs. Voters' decision to throw out the Socialist government failed to make investors feel more confident about holding Spanish debt. The 10-year Spanish bond yield rose to 6.55% from 6.38% on Friday.

Spain's stock market lost 3.5% and French stocks slid 3.4%. The Italian market dropped 4.7% to a seven-week low.

Investors also were unnerved by the German Bundesbank’s new forecast of a sharp slowdown in the German economy in 2012.

Prices of most commodities fell on economic jitters, and as some investors and traders sold what they could to raise cash. Near-term oil futures in New York fell for a third straight day, down 75 cents to $96.92 a barrel. Gold futures slid $46.40 to $1,678.30 an ounce, a four-week low.

Unlike the stock market, oil and gold still are up for the year.

The day’s only real winner: Treasury securities, as some investors stashed cash in something they still believe will repay them in full, despite the lack of a deal to pare the deficit. Treasury bond yields were lower across the board.

“Clients are telling us that preservation of capital is their primary concern,” said Bruce Bittles, chief investment strategist at brokerage Robert W. Baird & Co.

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Photo: On the New York Stock Exchange floor on Monday. Credit: Spencer Platt / Getty Images

Stocks, gold hit by broad sell-off on global jitters

Gold-blog

Raise cash, head for the sidelines.

That was the guiding sentiment in stock and commodity markets Thursday, as some investors and traders sold what they could and looked for a hiding place amid fresh doubts about the global economy.

Commodities took the heaviest hit: Gold futures dived $54.00, or 3%, to $1,719.80 an ounce in New York, the biggest one-day drop since Sept. 23.

The ThomsonReuters/Jefferies CRB index of 19 commodities slumped 2.5%, the biggest decline since Sept. 30. Corn, wheat, oil, cotton and copper all were sharply lower.

“There is liquidation across the board,” said Frank Cholly Sr., a senior commodities broker at RJO Futures in Chicago.

On Wall Street, stocks ended broadly lower for a second day. The Dow Jones industrial average, which tumbled 190 points on Wednesday, fell 134.86 points, or 1.1%, to 11,770. That cut the index's year-to-date gain to 1.7%.

Broader indexes were weaker. The Standard & Poor's 500 fell 1.7%; the Nasdaq composite lost 2%.

Some investors ran back to U.S. Treasury bonds, pushing the yield on the 10-year T-note down to 1.96% from 2.00% on Wednesday.

Many traders blamed continuing fears that Europe is headed for a major blow-up as its debt crisis worsens. Spain and France sold new bonds and were forced to pay yields far above the levels of a month ago.

General Motors Chief Executive Dan Akerson told the Detroit Economic Club that the European crisis is "much more serious" than the 2008 bursting of the credit bubble. GM shares fell 86 cents, or 3.8% to $21.79, a six-week low.

Still, Europe wasn’t a complete disaster Thursday: Italian bond yields pulled back from recent highs. And European stock markets were mostly down between 1% and 1.5%, relatively modest declines compared with the worst days of the last few months.

Meanwhile, markets seemingly ignored upbeat U.S. economic data, including a drop in new claims for jobless benefits to the lowest level since early April.

As they did in late September, some investors and traders may just be cashing out of whatever’s easiest to sell. That would include U.S. blue-chip stocks. The Dow is down 3.2% since Friday.

With so much uncertainty about Europe, and with the U.S. congressional deficit-cutting panel facing a Nov. 23 deadline to come up with a plan, some market players may just be calling it quits on 2011 early.

“I think it’s, ‘Just get out of things and wait til next year,’ ” said Frank Lesh, futures analyst at FuturePath Trading in Chicago.

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Photo: Gold jewelry, coins and bars are arranged for a photograph at a GoldMax store in Atlanta. Credit: Bloomberg News

Price of Thanksgiving dinner up 13%, biggest jump in two decades

The price of a classic holiday meal for 10 people will hit $49.20, jumping from $43.47 in 2010
Diners might not be in a thankful mood as they sit down in a few days to a Thanksgiving dinner that cost 13% more than it did last year.

The price of a classic holiday meal for 10 people will hit $49.20, jumping from $43.47 in 2010, the American Farm Bureau Federation said Thursday. That's the highest increase since 1990, as the cost of sweet potatoes, rolls, stuffing and even whipped cream spiked this year.

Bad weather, rising commodity prices and other factors have caused a run-up in food and beverage prices over the last few months.

On Nov. 24, a 30-ounce can of pumpkin pie mix will cost 16% more than it did last year, the farm group said. A pound of frozen green peas will be 17% more expensive, while a the cost of a gallon of whole milk will jump 13%.

But the biggest increase will be the turkey -– a 16-pound bird is expected to run about $21.57, or 22% more than in 2010. Economists with the farm group pegged the leap to strong demand in the U.S. and abroad.

"Retailers are being more aggressive about passing on higher costs for shipping, processing and storing food to consumers," John Anderson, a senior economist with the group, said in a statement.

The report, which the federation says is "an informal gauge of price trends around the nation," is the latest in a series that began in 1986. Back then, a Thanksgiving meal cost $28.74.

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-- Tiffany Hsu
Twitter.com/tiffhsulatimes

Photo credit Credit: Kirk McKoy / Los Angeles Times

Gold once again pushing $1,800 an ounce

GOLD
Eurozone instability has the price of gold back to flirting with $1,800 an ounce, with the spot price closing at $1,790.30 on Monday, up $35, to the highest level since Sept. 21.

After more than six weeks below $1,800, the metal’s sudden resurgence last week has analysts once again on the lookout for possible momentum toward $2,000 an ounce.

But $2,000 is “a big psychological number,” said James Steel, chief commodities analyst for HSBC. The closest gold’s gotten to breaking through is when it soared to $1,888.70 an ounce Aug. 22.

Since then, the metal’s price flattened as stocks plummeted. Gold hit $1,592.70 an ounce Sept. 26. Analysts suspected that investors were selling anything they could to raise cash.

October and the first week of November brought a steady stream of concerns over the debt crisis in Greece and Italy, causing gold to shift back to its classic role as a haven in times of turmoil.

With pressure on Italian Prime Minister Silvio Berlusconi to resign and Greek Prime Minister George Papandreou’s weekend ouster, some analysts believe gold will hold above $1,800 for months.

“It’s going to last for some time and be the driving force for the market for the rest of the year,” Steel said. “Gold’s gone back to behaving more normally.”

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-- Tiffany Hsu

Photo: Reuters / Mike Segar

U.S., California fuel prices may reach record highs in 2012

CA_grph
A combination of burgeoning global demand and rising U.S. exports will leave California and national gasoline and diesel prices at such a high level by the end of the year that they could rise to all-time record highs in 2012, analysts said Monday.

Americans are currently on pace to spend a record $489 billion on gasoline in 2011 because prices have remained at high levels all year. The only year that came close to the current situation was 2008, when U.S. motorists spent about $448 billion on gasoline. But even though oil and refined fuel prices climbed to record highs in 2008, they quickly fell afterward. That is not the case this year.

"We are at the highest fuel prices ever for this time of year, even though they have dropped a bit in recent weeks," said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey, who made the $489-billion projection. "I think we will see prices in 2012 that will break the records set in 2008."

In the summer of 2008, the national average for a gallon of regular gasoline reached $4.114, according to the U.S. Energy Department. In California, a gallon of regular gasoline reached $4.588.

The current national average is $3.407 for a gallon of regular, down from $3.443 last week, according to the AAA Fuel Gauge Report, which tracks closely with the Energy Department numbers. That shattered the old record for this week of the year: $3.013 a gallon, set in 2007.

In California, a gallon of regular gasoline is averaging $3.838, down slightly from $3.841 a week ago. Again, that is substantially higher than the old record for this week of the year of $3.231 a gallon set in 2007.

The primary reason for the stubbornly high prices is demand in Latin and South America, which is driving record U.S. exports of fuel to those parts of the world, particularly in the form of diesel. U.S. refiners are also making more diesel at the expense of gasoline production, Kloza said.

"Demand for gasoline is down in the U.S. by 4% compared to last year, but global demand has more than made up for that," Kloza said. "If you want to blame someone for the high prices, blame South America."

Another expert said that gasoline prices could be even worse than they are right now, given that world oil prices are again on the rise.

The European commodities trading benchmark, Brent North Sea crude, was up $2.14 during trading to $114.11 a barrel, its highest since Sept. 15. The U.S. benchmark, West Texas Intermediate crude, was up 77 cents to $95.03 a barrel on the New York Mercantile Exchange.

"The national average is just one penny away from being the lowest we've seen since the start of March, even as crude oil prices have risen," said Patrick DeHaan, senior petroleum analyst for GasBuddy.com. "So it does remain surprising that average prices have moved very little."

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Chart: The AAA's rolling 12-month average for regular gasoline prices in the U.S. and California is well above 2010 levels. Prices may hit new highs in 2012, experts say. Credit: AAA Fuel Gauge Report

Gold jumps as European Central Bank cuts interest rates

Gold coins
Gold broke out to a six-week high Thursday after the European Central Bank surprised markets by cutting interest rates.

For investors who believe that paper currencies are headed for further debasement by central banks, the move provided a good excuse to shovel money into precious metals as an alternative.

Near-term gold futures in New York rose $35.50, or 2.1%, to $1,764.20 an ounce, the highest closing price since Sept. 21.

Silver got a smaller lift, adding 56 cents to $34.49 an ounce. Silver had reached a five-week high of $35.29 last Friday.

The ECB, under new chief Mario Draghi, cut its benchmark short-term rate to 1.25% from 1.50%, in the first reduction since May 2009.

Draghi said the cut was justified because he believed the Eurozone economy was headed for a “mild recession.” Europe has been reeling from its debt crisis and from the austerity imposed by government spending cuts.

The euro currency initially slid after the surprise rate move, falling as low as $1.367 from $1.374 on Wednesday. But the euro rebounded after Greece’s prime minister reneged on his threat to hold a voter referendum on the terms of the country’s bailout by the rest of Europe. The euro was at $1.382 at about 1 p.m. PDT.

Draghi vowed the ECB would not accede to calls that it print massive amounts of new money to boost its purchases of sovereign bonds in Europe. But that didn't deter gold buyers.

Gold had rocketed in August, reaching a record closing high of $1,888.70 an ounce Aug. 22, as stock markets tumbled worldwide on fears that the Eurozone would implode.

But as stocks fell further in September, gold and silver too were slammed. Many analysts say the metals took a hit as some investors and traders sold whatever they could to raise cash amid continued market turmoil.

After bottoming at $1,595 on Sept. 26, gold has been fighting its way higher again. It’s now down 6.6% from its August peak but up 24% year to date -- on track for an 11th straight annual gain.

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Photo: Gold coins and bars. Credit: Mike Segar / Reuters

Amid price increases, snack giant Kraft profit up 22%

Peanutbutter
Packaged foods leader Kraft Foods Inc. pulled in $13.2 billion in revenue in the third quarter, an 11.5% increase from the same period last year.

The company, parent to brands such as Oreo, Maxwell House and Oscar Mayer, said its net income was $927 million, up 22%. Per-share earnings rose to 52 cents in the quarter that ended Sept. 30,  up from 43 cents a year earlier.

Revenue was up 4.4% to $6.1 billion in North America, even as the company hiked up some of its prices to adjust for rising commodity prices. 

Starting next week, the company will raise prices for its Planters peanut butter by 40%. Kraft only recently began bringing down the wholesale prices on its coffee after instituting a string of increases last year. 

In August, Kraft announced plans to split into two separate public companies, one focusing on the global snack business and the other managing North American grocery dealings. The process will take about a year, the Northfield, Ill.-based company said.

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Photo: Photo: Lawrence K. Ho / Los Angeles Times

Earnings report: Big 3rd-quarter profits for Occidental, Exxon-Mobil

Getprev
Occidental Petroleum saw its profit rise like an old-style gusher in the third quarter, up nearly 50% to $1.77 billion compared to a year earlier, the company said Thursday. It benefited, in part, from record domestic production that helped offset losses in the Middle East.

Occidental’s $2.17 per share compared with $1.19 billion, or $1.46 per share, a year earlier. Sales also jumped 26.1% to $6.01 billion.

“The third-quarter domestic production was 436,000 barrels per day  ... [the] highest in Occidental's history,” said President and Chief Executive Stephen I. Chazen. It was a showing that easily surpassed Wall Street expectations of $1.97 per share and profit on revenue of $5.46 billion, according to FactSet.

“We weren’t expecting any production growth for Occidental. It was very highly unlikely because of its exposure to Libya,” said Fadel Gheit, senior oil analyst for Oppenheimer & Co., referring to the North African nation where production had ceased during a hard-fought civil war. “Those barrels are gone,” Gheit added.

Argus Research analyst Phil Weiss said Occidental’s production in California has also been slowed by delays in getting permits. But Weiss said that the company did well because it has positioned itself to perform profitably in almost any political situation and earnings environment.

“Occidental remains one the industry’s best-managed firms,” Weiss said.

Occidental's daily oil and gas production volumes averaged 739,000 barrels a day, compared to 706,000 in the third quarter of 2010. Domestic crude production rose by 56,000 barrels a day from such places as South Texas, the North Dakota Williston Basin and California.

The world’s biggest integrated oil firm, Exxon Mobil Corp., reported a third-quarter profit of $10.33 billion, or $2.13 a share, compared to $7.35 billion, or $1.44, a year earlier.

The results were indicative, Gheit said, of an industry enjoying substantially higher world oil prices compared to the third quarter a year ago. But sequentially, the average profit margins trailed those recorded in the second quarter when oil prices hit their peak for this year.

For the major integrated oil companies, most of the profit came in the so-called upstream segment, which includes exploration and production. Downstream segments, which include the business of refining oil into fuels like gasoline and diesel, did not perform as well.

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Photo: Occidental headquarters in Westwood. The company's earnings were boosted by record domestic oil production in the third quarter. Credit: Kevork Djansezian / Associated Press

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