Oil prices are off this week, while gold prices continue to move higher after a near term drop to $1,314.90 on January 28th.

The Wednesday (February 9) morning price for oil futures is $87.23 per barrel on the New York NYMEX. This is up by $.29 over Tuesday’s settle price, but the current price represents nearly a $5 drop from last week’s highs near $92.

Oil prices had been steadily rising thanks to an improving economy and a weak dollar. However, reports inventory reports late last week showed higher than expected levels of crude supplies, leading to Tuesday’s 8-day low rate on oil futures.

Concerns about supply levels were partly quashed by the American Petroleum Institute late Tuesday when it announced that inventory levels fell by 558,000 barrels to 346 million barrels last week. That report has contributed to Wednesday morning’s gains.

However, another report due later Wednesday from the US Energy Department is expected to counter the API report and show an increase in inventory levels of two million barrels, according to Bloomberg.

Meanwhile, gold prices continue to move steadily higher after a near $100 drop in less than a month. One ounce of gold currently sells for $1,363.80 on the New York NYMEX. This is down $.40 from Tuesday’s close, but still about $12 higher than Monday’s close at $1,352.10.

Gold prices peaked at $1,421.60 on December 31st before dropping over $100 in four weeks. A steady rise since January 28th has retraced about 40 percent of the losses on that month-long decline.

The question that remains at this point is whether gold prices have rebounded and are going to continue the long-running upward trend. Or, if the all from $1,421.60 signaled a longer-term reversal and the current retracement is a correction to a negative direction for gold prices.

The dollar remains relatively weak against most major currencies as earnings reports have been mixed and it appears the Fed is still nowhere near a rate increase. Equity investors seem persuaded that the economy is improving as the Dow Jones Industrial Average now sits at 12,233 in mid-morning trade.