Precious Metal

As the dollar falls, gold prices go up...

After falling yesterday, the shiny metal rose today as the effect of a falling dollar offset the effect of the drop in energy and food prices. Actually, the drop of the green currency boosted right away the appeal of the gold in the market being a hedge against inflation. So far, the metal recorded a high of $929.95 an ounce and evidently gold prices will remain on increasing as long as there are worries surrounding the U.S economy, and therefore their currency. Yet so far the trend of the metal is still sideways.

Crude prices rose, recording up to now a high of $142.44 a barrel, as Mexico, one of the biggest oil suppliers for the United States, had its production decline due to a strong hurricane that appeared in the Atlantic Ocean this year limiting and affecting the supply of oil. While that on another side, the G8 leaders warned of the threats of inclining prices and preferred to increase the amount of oil produced in an attempt to help ease prices.

Now, the green currency fell since the two largest mortgage lending companies were to collect capital which may harm the earnings of current shareholders and therefore the stock market as a whole. This of course spread out fears in the U.S market and consequently had the U.S dollar collapse in front of majors. To this point, investors rather choose the commodities sides as returns are higher and better.