Overnight roundup courtesy of Spreadex – 16/09/13

The gaze of the financial world will be squarely upon the Federal Reserve come tomorrow when policymakers are due to discuss paring unprecedented bond purchases, known as quantitative easing. Significantly, Lawrence Summers has withdrawn from the race to be the next Federal Reserve chairman paving the way for Janet Yellen take up the reigns. Investors are of the belief that Yellen may not scale back QE as aggressively as her rival Summers would. 

The S&P 500 rose 2 percent last week to close within 1.3 percent of its record high, rallying 3.4 percent in September. The index rebounded from the worst monthly loss since May 2012, as reports showed China’s economy has strengthened and the U.S. looked less likely to attack Syria. Syria have credited Russia with brokering a deal that averted imminent U.S. military action and whilst Russia still opposes military intervention, they now backs possible U.N. sanctions for non-compliance. This comes after the Assad regime agreed to back a nine-month U.N. programme to destroy Assad’s chemical arsenal. 

Analysts at Goldman Sachs are of the belief that gold could tumble below the $1,000 mark for the first time since October 2009, with prices driven lower as the Federal Reserve withdraw stimulus and the economy continues to improve. After Lawrence Summers pulled out of the race to replace Ben Bernanke, the demand for gold as a hedge against inflation weakened. Gold, already shedding 21 percent of its value this year, is heading for the first annual loss in 13 years.