Crude Oil Price: Oil and gold rise on Monday on the back of a weak dollar

The failure of the G20 meeting to reach any agreement over the trade imbalances and in turn the exchange rates has helped the USD to stay weak on Monday but as we mentioned in our yesterday’s post we believed the USD is already very weak and we do not expect to see it going down by a lot to give any surprises. The USD/EUR exchange rate on Monday was above $1.40/Euro for most part of the day. Right now at 0215 GMT, it is trading at $1.3959/Euro.

Crude oil for December delivery closed at $82.52/barrel, which was 83 cents above its Friday’s closing price. The weak USD has been the main reason for this increase in the oil prices. Meanwhile, the strike in France over pension reform continued on Monday which disrupted the oil supply and had also helped oil prices to stay bullish. At 0144 GMT, crude oil for December delivery was trading at $82.43/ barrel.

The major driver for the price of gold in the recent past has been the USD, which has a negative correlation with the price of gold. Since we saw a weak USD on Monday, we can safely predict that the gold prices must have gone up and this is exactly what happened. Gold for December delivery was up by 1% or $13.80 to settle at $1,338.90 per troy ounce. At 0148 GMT, it was trading at $1,343.40 per troy ounce.