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Weak Dollar & Middle East Tensions Benefit Commodity Market

March 26, 2015 at 12:24 by Vladimir Vyun

The dollar continues to underperform, helping commodities to keep rising. Both energy and metal markets demonstrated solid gains today. The string of lackluster macroeconomic reports from the United States led to speculations that the Federal Reserve will not be in hurry to start monetary tightening. This led to the weakness of the greenback, and raw materials often trade inversely to the US currency.

Crude oil and gold also rallied due to tensions in the Middle East that were escalating as Saudi Arabia performed an air strike in Yemen. Crude is often sensitive to events in the Mid East region that accounts for about 35 percent of world oil production. As for gold, the precious metal can benefit from geopolitical conflicts as a safe haven asset.

May futures for delivery WTI crude oil jumped 4.33 percent to $51.34 per barrel as of 12:12 GMT on NYMEX today. Contract for delivery of Brent crude leaped 4.37 percent to $58.95 per barrel on ICE. June contract for gold gained 0.91 percent to $1,207.90 per barrel on COMEX. May copper rallied 1.72 percent to $2.84 per pound.

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

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