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Better US Economy — More Demand for Oil, Less Need for Gold

April 2, 2011 at 3:16 by Vladimir Vyun

The signs of the economic recovery in the US boosted crude oil and weakened gold. The non-farm payrolls showed that the US employers added 216,000 in March. The unemployment rate unexpectedly fell to 8.8 percent. The Dow Jones Industrial Average rose 0.5 percent to 12,376.72, while the Standard & Poor’s 500 Index gained 0.5 percent to 1,332.41.

The improving economy promises more demand for fuel, which is good for crude, and at the same time decreases demand for safer assets, including gold. Oil is also helped by concerns about supply as the government forces in Libya threw back the rebels, signaling that the conflict won’t end soon.

May delivery for crude oil gained $1.22 to $107.94 per barrel on NYMEX, the highest price since September 25, 2008. Crude has risen 2.4 percent over the week and 27 percent from a year ago. May delivery for Gasoline advanced $0.0436 (1.4 percent) to $3.1513 per gallon, the highest level since July 21, 2008. June futures for gold delivery fell $11 (0.8 percent) to $1,428.90.

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