Dollar And Oil Declines While Gold Looking For Direction

Dollar And Oil Declines While Gold Looking For Direction

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The dollar fell on Monday, but it has managed to keep most of its gains on Friday when strong employment data was published in the United States. This week, investors are awaiting inflation figures indicating a possible reversal of green money, which has shown some weakness since the beginning of the year. The dollar index, which measures the value of green money against six major currencies, recorded a decline of 0.12% to 93.43 points.

Katie Lynn, director of BK Asset Management, commented that the dollar is largely based on Friday’s profits, but the only thing that prevents the US currency from appreciating is treasury bills. US treasury bills remained relatively unchanged, sloping down on Monday. The dollar as a whole does not respond much to Monday’s comments by St. Louis Fed Chief James Bullard and Fed President of Minneapolis Neal Kashkari.

This is partly surprising given that Bullard has said the likelihood that the central bank will leave the interest rate unchanged because inflation is unlikely to rise so much, even if the labor market continues to improve.

Oil fell yesterday after the market expressed concern over the higher production of OPEC and the US. Light crude oil futures ended the trading session with 19 cents losses at $49.39 a barrel after a bottom of $48.54 a barrel. Brent oil futures last traded at about $52.17 a barrel, dropping 25 cents, the price dropping to $51.37 a barrel earlier.

The reason oil prices dropped by almost 2% during the day was a massive sale due to the recovery of production in the largest oil field in Libya. We recall that the extraction of oil from the Sharara oil field in Libya was violated by armed Protestants in the coastal city of Zawia. This once again sparked doubts about the effectiveness of the OPEC reduction agreement with other major producers, including Russia. Talks are taking place in Abu Dhabi on ways to boost the already-reached 1.8 million barrels per day bargaining deal.

Gold prices were unstable on Monday, moving up and down after failing to get support from the weaker dollar. Spot Gold last traded at about $1 258.21 per troy ounce at a growth of 0.03%.

US futures for December ended the trading session at $1,264.70 an ounce. In the coming weeks, gold may rise if politicians in the US vote for a “clean” raise in the debt ceiling, which means raising debt without spending money, commented analyst Tom Kendall of ICBC Standard Bank. He added that this would have an impact on the US deficit and will therefore have a positive impact on gold, but it is likely that more will be needed for gold to break the level of $1,300 an ounce.

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