U.S. Dollar Down as Stocks, Oil and Gold Head Higher
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It’s been a bit more exciting today than many thought as far as the financial markets are concerned. Gold, oil and stocks are all moving higher, while the U.S. dollar weakens. It looks like it’s going to be an interesting week after all.
Gold breaks through $1,000 an ounce
Gold breached the $1,000 an ounce level today, hitting that high for the second time this year. It really isn’t much of a surprise that gold is so high. Earlier this year, when gold hit $1,000 an ounce, it was due to economic worries and a rush for a safe haven investment. Now gold is rising as a hedge against inflation as the economy begins to recover. Oh. And gold is getting help from the fact that the U.N. criticized the influence of the dollar as the global reserve currency.
Oil prices head higher
Oil prices moved higher, thanks to a sinking dollar. Because oil is traded in dollars, its prices often move inversely to the greenback’s performance on the currency market. Also helping oil a bit is the expectation that the worst of the recession is probably over.
Stocks likely to end higher today
The U.S. stock market is likely to end higher today. As the close approaches, the Dow is more than 50 points higher. Help from oil company stocks benefiting from higher oil prices is a factor. Additionally, there is hope in the form of Kraft’s determination to make things work with Cadbury. There is a great deal of speculation that this could kickstart global mergers and acquisitions.
Will the U.S. dollar weaken further?
All of the above factors contribute to a weak U.S. dollar. And that could be bad news in the long term. BloggingStocks offers this on why we should be watching the U.S. dollar:
We must keep an eye on the U.S. dollar. If it keeps dropping, it might create a psychological trigger signaling that U.S. debt is too high or that inflation is on the way. Either one of these scenarios is harmful to long-term growth.
It will, indeed, be an interesting few days. And it could, quite possibly, be a wild ride.
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