Oil and Gold Daily Analysis: February 8, 2012

CL2H

Oil rose the most in three weeks as the dollar fell against the euro after Federal Reserve Chairman Ben S. Bernanke said the 8.3 percent rate of unemployment in January understates weakness in the U.S. labor market. Futures increased 1.5 percent as the currency dropped on Bernanke’s comments and signs that Greece is near a debt agreement. West Texas Intermediate crude advanced more than Brent in London, reducing the European benchmark’s premium over New York oil for the first time in nine days. Bernanke made some pretty bearish statements and the dollar tanked. Once the dollar dropped you saw WTI rebound. Oil for March delivery raised $1.50 to settle at $98.41 a barrel on the New York Mercantile Exchange, the biggest one-day gain since Jan. 17. Prices have fallen 42 cents this year.  Oil advanced after the settlement; reaching $98.77 a barrel after the American Petroleum Institute said U.S. oil inventories fell 4.53 million barrels last week. The dollar fell to the lowest level against the euro since Dec. 12 after Bernanke told the Senate Budget Committee that the U.S. has a long way to go before the jobs market operates normally. Commodities rose to a five-month high on his remarks.



GOLD

Gold futures jumped the most in a week as the dollar’s drop to the lowest in almost two months bolstered demand for the precious metal as an alternative investment. The greenback fell as much as 0.7 percent to the lowest since Dec. 9 against a basket of major currencies including the euro. Greek officials worked on a final document needed for a second aid package, signaling progress on Europe’s debt crisis.  The dollar’s decline is pushing gold higher. Gold futures for April delivery climbed 1.4 percent to close at $1,748.40 an ounce on the Comex in New York. After the settlement, the metal reached $1,752.60 in electronic trading. The most-active contract has climbed 12 percent in 2012.Earlier; the price dropped as much as 0.7 percent to   $1,712.60, the lowest since Jan. 26. Gold rallied after Federal Reserve Chairman Ben S. Bernanke repeated that the U.S. job market is still far from healthy, boosting demand for the metal as a haven. There is a long way to go before the labor market can be said to be operating normally, Bernanke said.  Even if we saw that firings stopped for the past few weeks and hiring picked up yet the job market is still pretty far from normal level and Bernanke admitted that they have lots of work to do in order to put it in normal situation.