Wednesday, November 30, 2016

Gold set for worst month in three years; First oil output cut since 2008; Big Mac creator dies

1 Gold set for worst month in three years (Cecilia Jamasmie in mining.com) Gold prices are on track to make of November the metal’s worst month in over three years as strong US economic data boosted the dollar, rising expectations of an interest-rate increase by the Federal Reserve next month.

Gold for February delivery, the most active contract, was recently down 1.48% at $1,173.20 an ounce on the Comex division of the New York Exchange. Sharp gains in the crude oil market after the OPEC agreed to cut production by about 1.2 million barrels per day, or about 4.5% of current output, did little to help the gold bulls.

A Federal Reserve interest-rate increase next month is now as definite as death and taxes, according to the latest poll of investors. They see the likelihood of a rates hike as 94% certain, according to Fed fund futures tracked by CME. Higher interest rates are typically negative for gold and other precious metals as they don’t pay interest.

Gold has shed nearly 8% this month, the deepest monthly drop since June 2013, hurt by a rally in the US dollar on surging Treasury yields as investors believed President-elect Donald Trump's policies would invoke faster inflation.


2 First oil output cut since 2008 (Larry Elliott in The Guardian) The price of oil has surged by 8% after the 14-nation cartel Opec agreed to its first cut in production in eight years. Confounding critics who said the club of oil-producing nations was too riven with political infighting to agree a deal, Opec announced it was trimming output by 1.2m barrels per day (bpd) from 1 January.

The deal is contingent on securing the agreement of non-Opec producers to lower production by 600,000m barrels per day. But the Qatari oil minister, Mohammed bin Saleh al-Sada, said he was confident that the key non-Opec player – Russia – would sign up to a 300,000 bpd cut.

Russia’s oil minister, Alexander Novak, welcomed the Opec move but said his country would only be able to cut production gradually due to “technical issues”. A meeting with non-Opec countries in Moscow on 9 December has been pencilled in.

Brent crude was trading at just over $50 a barrel following the completion of the Opec meeting in Vienna – an increase of almost $4 on the day. Saudi Arabia will bear the brunt of Opec’s production curbs, having agreed to a reduction in output of just under 500,000 bpd. Iraq has agree to a 210,000 bpd cut, followed by the United Arab Emirates (-139,000), Kuwait (-131,000) and Venezuela (-95,000).

Smaller countries are also reducing output, but Iran – which has only recently returned to the global oil market after the lifting of international sanctions – has been allowed to continue raising output. Indonesia has suspended its membership because, as a net importer of oil, it wanted the price of crude to stay as low as possible and declined to cut output.


3 Big Mac creator dies (San Francisco Chronicle) Michael James "Jim" Delligatti, the McDonald's franchisee who created the Big Mac nearly 50 years ago and saw it become perhaps the best-known fast-food sandwich in the world, died Monday at home in Pittsburgh. Delligatti, who according to his son ate at least one 540-calorie Big Mac a week for decades, was 98.

Delligatti's franchise was based in Uniontown, not far from Pittsburgh, when he invented the chain's signature burger in 1967 after deciding customers wanted a bigger sandwich. Demand exploded as Delligatti's sandwich spread to the rest of his 47 stores in Pennsylvania and was added to the chain's national menu in 1968.

"He was often asked why he named it the Big Mac, and he said because Big Mc sounded too funny," his son Michael Delligatti said.

However, McDonald's in 1985 honored Esther Glickstein Rose with coming up for a name for the burger and presented her with a plaque etched with a likeness of the best-selling sandwich and french fries between the Golden Arches. She was a 21-year-old secretary for the company's advertising department in 1967 when, the story goes, a harried executive dashing to a board meeting asked her for a name nomination.

Jim Delligatti's family disputes that Rose came up with the idea. The company didn't immediately clear up the dispute. Delligatti told The Associated Press in 2006 that McDonald's resisted the idea at first because its simple lineup of hamburgers, cheeseburgers, fries and shakes was selling well.

McDonald's has sold billions of Big Macs since then, in more than 100 countries. When the burger turned 40, McDonald's estimated it was selling 550 million Big Macs a year, or roughly 17 every second. Delligatti received no payment or royalties for coming up with the burger, the company said.

Ann Dugan, a former assistant dean of the University of Pittsburgh's Katz School of Business and an expert on business franchises, said Jim Delligatti's genius was simple: He listened to customers who wanted a bigger burger.

"In franchising, there's always this set playbook and you have to follow it. Jim saw an opportunity to go outside the playbook because he knew the customer," Dugan said. "He persevered and (McDonald's) listened, and the rest is history."


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