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Weak Dollar Means High Prices for Crude Oil, Gold at $1,500

April 19, 2011 at 20:14 by Vladimir Vyun

Gold rose above $1500 and crude oil climbed today on forecast that the dollar will weaken. The US currency declined on speculation that the Federal Reserve will lag begin the European Central Bank in raising interest rates. The greenback also fell after Standard & Poor’s changed the US debt rating outlook from stable to negative yesterday.

Investors move to hard assets as appeal of the currency declines, increasing demand for gold and other precious metals. Weaker dollar also means higher prices for oil. Analysts predict that the report of the Energy Department tomorrow will show that the US inventories of crude increased for the seventh week.

June futures for gold delivery jumped $2.20 (0.1 percent) to $1,495.10 as of 13:38 on COMEX, following the previous advance by 0.5 percent to the record of $1,500.50 per ounce. May contract for crude oil delivery, which expired at the close of floor trading, rose $1.03 to $108.15 per barrel on NYMEX. The more actively traded June contract gained $0.59 (0.6 percent) to $108.28.

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