Monday, 12 Oct 2009

Oil and Gold Soars as the Dollar Weakens

The Dollar continued to drop against the Euro today, and the EUR/USD pair reached the 1.4812 level. As a result of the Dollar's continuing bearish trend, crude oil has reached $73.80 a barrel, and gold rose to $1058.40 an ounce, threatening to reach a new all time record high.

The Dollar slid today as positive forecasts were published for several economic indicators from the U.S, including the Federal Budget Balance and the Long-Term Purchases reports. This seems to have raised risk appetite, which turned investors to go against the Dollar. Due to the fact that both crude oil and gold are valued in Dollars, the depreciation of the American currency led to a rising trend of the two commodities. It currently seems that as long as the Dollar continues to weaken against the Euro, oil and metal commodities are likely to extend their bullish trends.

Looking ahead to tomorrow, the main publication which is likely to impact the market is the German ZEW Economic Sentiment. This is a survey that attempts to predict the next six months economic outlook for Germany. If the end result will reach expectations for a 58.6 figure, it is likely to support the Euro.