Every week we bring you the biggest business stories from around the world. This week: Oil is down, gold is up, the US markets rally, the EU and UK have a showdown, and food prices remain on the rise.
Friday’s EU summit was pushed late by David Cameron as EU leaders remained resistant to his demands. Beginning last Thursday the summit is seen as a crucial moment for the EU’s 28 member states. Issues include financial governance and welfare as well as Britain’s future role in the organisation. Late Friday night Cameron walked away with a deal which he declared would give the UK ‘special status’ in the EU. Cameron had promised a referendum on EU membership in Britain and hopes the latest deal will convince the electorate to remain in the EU.
Oil prices slipped down below $30 a barrel on Friday, dragging the TSX and CAD down with it. Retail sales also fell 2.2%, far lower than the 0.9% drop that was predicted. Despite the poor economic performance, inflation in Canada rose to 2% in January – the highest rate in over a year. The jump was fueled by rising gas prices and the rising cost of food.
US Stocks Rally
US stocks meanwhile are up this week. The Dow and S&P 500 both logged their best weeks since November and the Nasdaq closed at its highest since July. European markets ended the week with the strongest weekly gains in over a year, despite some concern about David Cameron’s EU showdown talks.
Beef and produce prices have both been high lately. High demand has kept beef prices high while the struggling loonie has increased the cost of importing produce. Tomatoes are up over 11%, apples over 16%, lettuce over 17.9% and cauliflower prices up over $8 a head. Prices for beef could start to drop however as demand begins to decrease due to the high prices
Gold Prices Soaring
Stock market volatility over the past few months has encouraged investors to turn to gold, driving up the price. Following a multi-year slide, bullion is back up over $1200 as investors look for a safe alternative to the stock market. Just last December the price of gold was hovering around $1000 an ounce. Volatile markets and lower central bank interest rates (which means that keeping money in a savings account will produce little to no return) are driving up the price of gold. Some experts believe that gold could go as high as $1800 or $2000. Gold prices are even higher when you consider them against a low Canadian dollar.
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