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Gold & Crude Tumble as Dollar Rallies

May 10, 2013 at 23:40 by Vladimir Vyun

Commodities tumbled today as the US dollar rallied. The greenback rallied to the highest level in five weeks and the Dollar Index advanced above 83 for the first time in more than two weeks. The Standard & Poor’s GSCI Index of raw materials lost 1.6 percent today. Gold and crude oil were among losers.

It was not the first time when the US currency hurt commodities. Raw materials are usually inversely correlated with the dollar. The strength of the greenback should not be a surprise. Central banks across the world are trying to push their currencies down and are implementing quantitative easing, but the US Federal Reserve has not much room for additional easing with its already extremely accommodative monetary policy. In fact, there are speculations that signs of improving economy will spur the central bank to reduce its stimulus.

June futures for gold dropped as much as $32 (2.18 percent) to close at $1,436.60 per troy ounce on COMEX today. Contract for Brent crude oil declined $0.56 (0.54 percent) to $103.91 per barrel on ICE. WTI crude slipped $0.35 to settle at $96.04 per barrel on NYMEX.

If you have any questions and comments on the commodities today, use the form below to reply.

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