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Oil Retreats, Gold Trades Higher on Uncertainty About Europe

October 17, 2011 at 17:20 by Vladimir Vyun

Last week the optimism about the plans to deal with the European debt crisis supported commodities. This week the positive sentiment waned, driving most commodities, including oil, down, at the same time helping gold.

The optimism was caused by the meeting of Group of Twenty, where the politicians discussed the problems of Europe, and the pledge of the German and French leaders to devise a plan for dragging the European Union out of the debt crisis. Yet today Steffen Seibert, spokesman of German Chancellor Angela Merkel, said no plan is able to quickly resolve the dangerous situation in Europe. The resulting panic hit the commodity market. Gold recently showed the tendency to perform more like an industrial metal, not like a safe asset, but today the yellow metal was able to trade higher than last week’s close.

Crude oil dropped from $112.46 to $110.66 per barrel today as of 17:13 GMT on ICE after rising to the daily maximum of $112.46 per barrel. Gold traded at about $1,682.00 on COMEX after it closed at $1,674.50 last week. The metal reached the three-week high of $1,690.70 in the previous week.

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

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