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The Overall Fundamentals

Gold and Silver

Gold futures on the COMEX Division of the New York Merc continued its rally Wednesday, as worries over worldwide inflation prompted players to buy more Gold to store their wealth. A weaker USD gave additional boost.

The most active Gold contract for June delivery rose 6.00, or 0.4%, to 1,458.5 oz.

Market analysts said that worries over inflation intensified after the US Federal Reserve Chairman Bernanke said that inflation must be watched "extremely closely."

The consecutive raises in the Crude Oil prices also helped fuel the Gold market. May Crude Oil futures added 49c Wednesday in New York, tapping 108.83 bbl the highest price in 2.5 yrs.

Players said that the weakening USD against Euro helped raise Dollar-priced Gold market. The USD declined as much as 0.9% against the Euro on speculation that the European Central Bank will raise its Key interest rate this week.

Silver for May delivery also increased 20.4c , or 0.52%, to 39.387 oz. and July Platinum added 1.0 or 0.06%, to finish at 1,797.8.

Crude Oil

US Crude Oil price rose Wednesday and hit a new high since September 2008 on the Middle East tension and a weaker USD, brushing aside increased US domestic Crude inventories reported last week.

In Libya, battles between Libyan leader Muammar Gaddafi's forces and the rebels continue, in Bahrain, firms have fired hundreds of mostly Shi'ite Muslim workers who went on strike to support pro-democracy protesters.
The European Central Bank is expected to raise interest rates by 0.25% Thursday for the 1st time since the financial crisis hit. The expectation pushed the euro to a 14 mo. high but pulled the Dollar Index lower. A weaker "Greenback" usually raises Crude Oil prices.

On the Supply Side: members of the Organization of the Petroleum Exporting Countries (OPEC) say they have no intention to raise output. OPEC said Wednesday at a conference in Paris they could do little to control prices driven by speculators betting on " worst case scenarios" and said the market has all the Crude Oil it needs.

Wednesday, the US Energy Information Administration reported that Crude Oil inventories increased 2M bbls in the week ended April 1. It was the 9th rise in the last 10 weeks, showing that the US Crude Oil supply was not affected by the MENA region unrest. This pressured the market in the earlier trading session.

Light, Sweet Crude for May delivery added 53c to settle at 108.47 bbl on the New York Merc. In London, Brent Light Crude for May delivery also rose and last traded above 122 bbl.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Commodities

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