Gold, oil prices rise on dollar weakness
Just as major currencies are making gains against the sour dollar this week commodities like gold and oil are moving higher as well. The current Gold price has a (September 30) spot rate at $1,312 in early New York NYMEX trade and benchmark crude oil scheduled for November delivery is priced at $78.71.
The dollar has picked up the pace of its weakness in the last week thanks to the Federal Reserve’s announcement last Tuesday that it planned to buy up US Treasuries as a way to infuse cash into the market. This news coincided with the maintenance of a low to no interest rate policy, keep the buck under wraps.
Gold has maintained the $1,300 level after breaking through that mark for the first time ever early on Tuesday. The close Tuesday was at $1,309, followed by a Wednesday close at $1,309.90.
Gold remains a sound investment and top analysts are encourage speculators to continue to look at gold in the near to medium term as the US recovery remains slow in its start and the dollar weakness looks to go on for some time.
Oil prices are moving toward the upper end of the $70-80 price range that has remained constant for some time. Wednesday’s government report on crude inventories showed a decline, but supply levels are high relative to five year averages.
Benchmark crude closed Wednesday at $77.86 on the New York Mercantile Exchange, a gain of $1.20 from Tuesday’s settle price.
According to the report from the Energy Information Administration, crude inventory levels fell by around 500,000 barrels, to a total of 357.9 million barrels. This is 5.7 per cent higher than inventory levels reported at the same time one year ago.
The dollar’s weakness remains the story as the euro is near $1.37, the pound is above $1.58 and one dollar currently nets just 83.22 yen, which is just above recently reached 15 year lows for the dollar-yen.
About Pete Southern
Pete Southern is an active trader, chartist and writer for market blogs. He is currently technical analysis contributor and admin at this here blog.
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