Feds slash key rate to 2%

The biggest market-driver in the U.S. during the report period ended Nov. 6 was the Federal Reserve’s slashing of its overnight lending rate by 50 basis points to 2%, its lowest level in more than 40 years.

The move triggered a broad-based rally that helped push the Dow Jones Industrial Average to pre-September levels above 9,600 points.

Unfortunately, the senior gold producers failed to catch fire as the yellow metal traded tightly around the US$280-per-oz. mark: Newmont Mining rose US68 to US$23.70; AngloGold was up 44 to US$17.05; Gold Fields fell 19 to US$4.61; Homestake Mining eased off 8 to US$8.20; Ashanti Goldfields declined 15 to US$3.47; and Compania de Minas Buenaventura fell 39 to US$19.53.

On weak platinum and palladium prices, Stillwater Mining dropped another 34 to close at US$16. Feelings are growing that the recent surge in car sales in North America will likely depress next year’s sales, reducing a significant market for platinum group metals in catalytic converters.

The biggest news among the base metal majors was Alcoa and BHP Billiton‘s announcement that they are forming an equally owned company named Integris Metals to carry out metals distribution in North America. The venture combines the former’s Reynolds Aluminum Supply with the latter’s Vincent Metal Goods in the U.S. and Atlas Ideal Metals in Canada. The company, to be based in Minneapolis, is expected to have annual revenue of at least US$2 billion. Alcoa rose 84 to US$34.01, while BHP Billiton was up 7 to US$9.07.