Gold, crude oil moving higher as US dollar softens
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Gold futures are edging closer to an all-time high, with prices surging above $2,050 – close to all-time highs above $2,100. Concurrently, crude oil has reached year-to-date highs, crossing the $80 mark for the first time since November 2023. These milestones underscore the commodities’ robust performance amidst fluctuating economic conditions and highlight their appeal as investment assets during times of currency devaluation.
USD’s influence on commodity prices
Amidst the rising prices of gold and crude oil, the Australian dollar (AUD/USD) has strengthened, trading back above the 0.6500 mark. This movement suggests a correlation between commodity prices and the relative weakening of the US dollar. Gold and US dollar are negatively correlated, with the current correlation between gold and AUD/USD around +0.45. Even with the recent surge in gold, the dollar remains historically strong – AUD/USD having reached as high as 0.9500 in the past decade.
Implications of crude oil’s resurgence
The resurgence in crude oil prices also points to potential pressures on the US dollar. Higher oil prices can contribute to the currency’s softer stance, as seen in past periods where rising crude prices coincided with lower dollar values. The relationship between crude oil and the dollar underscores the importance of monitoring commodity markets for traders and investors looking to navigate currency fluctuations effectively.
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This article was originally published by a www.ig.com . Read the Original article here. .