FX.co ★ Crude oil and gold review

Crude oil
Crude oil futures dropped by 5% on Thursday on jitters over the weekly US unemployment claims and debts fears in the Eurozone. Investors closed their risky assets positions in favor of the dollar, which is seen as the asylum currency now. At the session end Light crude oil quotations in March contracts dropped by $3.84, or 5%, down, at $73.14/barrel, which bacame the lowest level since Jan. 29 and the most significant one-session’s fall since July, 29.
The catalyst for the initial downturn of the oil prices was an unexpected jump of dole claims in the US, filed by the unemployed workers last week. As the US Department of Labor saying, the number of the jobless claims increased on the week ended Jan. 30 by 8000 to 480 000. On Thursday oil futures lost all their upper positions made at the beginning of the week, when investors bought them encouraged by the strong economic indicators, such as production activity growth in the US, Europe and China. Any rise in production activity often suggests the industrial production growth and, in sequence, the energy demand is seen higher. Nevertheless, as to the last report, oil consumption in the US did not grow up. Furthermore, the US Energy Department told the oil demand was even 2% lower over the last four weeks, than in the same period of last year, where the recession only began affecting the US economy.

Gold
Gold futures edged on Thursday to the lowest level for 3 months, as investors were leaving their risky assets on fears about the Euro-zone debts and weekly unemployment report in the US which appeared to be worse than it was predicted.
The April gold contracts were down by $49, or 4.4%, to $1,063/ounce. The February gold futures, which were traded less actively, also lost $49 and settled at $1,062.40/ounce after having hit the intraday low rate of $1,060.30/ounce during the floor trade. The trade participants sold the Euro, Gold, commodities and equities on the increased concerns over Greece, Portugal and Spain to face a tight situation with their budgets now being the out of control, that will, surely, affect the feeble recovery of the EU-zone.
Being in worry on concerns of deficits in the Euro-zone budgets investors switched into the cash. As a result, the dollar took the advantages to be the safe-haven currency against the Gold, which is traditionally seen as a safety asset too, but last months it is considered to be a risky one. The stronger dollar often negatively affects the US dollar-denominated metals like gold by making their price more expensive in other currencies.
Weekly data of the jobless claims in the US also were disappointed, as the number of the claims increased bothering the market the day before the release of the key non-farm payroll employments report announced by the the US Department of Labor.

Best regards,

analyst V.Donin