On Monday, the Federal Reserve Bank of San Francisco published a report, which indicated that central bank is growing closer to raise interest rates. As a result, the US Dollar Index, which tracks the performance of the greenback against a basket of six other major currencies, climbed to a 14-month high. Since then, ongoing expectations that U. S. interest rates will be rise sooner rather than later have been supportive for the U. S. dollar, making crude oil and gold more expensive for holders of other currencies.
Yesterday, the price of light crude bounced off an eight-month low and climbed to almost $94 per barrel, supported by expectations that the EIA weekly report will show another drop in crude oil supplies and inventories at a key storage hub of Cushing, Okla. would stay low for longer than previously expected. Meanwhile, today’s government data disappointed market participants and crude oil hit a fresh multi-month low. What’s next? Is it possible that the gold-to-oil ratio will give us some interesting clues? Let’s examine charts and find out (charts courtesy of
This post was published at Gold-Eagle on September 10, 2014.
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