The Buzz: Gold and oil down. But not out?
Oh sure, fans of the New Orleans Saints are partying today following their team’s first Super Bowl victory. But investors in commodities who’ve made big bets on black gold (oil) and real gold can’t be in as festive a mood.
The price of gold has dipped 4% so far this year and is down nearly 15% from its all-time high last December. Meanwhile, oil prices are down 10% in 2010.
Not surprisingly, the pullback in commodities is taking place as the dollar has strengthened against other currencies, particularly the euro. The weakness in the greenback last year helped fuel the runups in oil and gold.
Oil, which is priced in dollars, tends to move higher when the dollar is weak. And gold, thanks to being a tangible asset, often does well when people doubt the dollar. [Read the full article]