Oil And Gold Analysis: Crude Oil Futures Shoot Up, Gold Posting Gains
ICM Brokers | Aug 28, 2013 05:32AM ET
Crude oil futures shot up on Tuesday after tensions between the U.S. and Syria moved apparently closer to a possible military strike in response to the embattled Mideast nation's alleged use of chemical weapons. U.S. Defense Secretary Chuck Hagel said earlier the military is ready to take action against Syria if called upon by the White House. The U.S. insists the Syrian military has used chemical weapons during its internal conflict as have the U.K. and others, a charge Damascus has denied. On Monday, U.S. Secretary of State John Kerry said the world would hold Syria accountable for using chemical weapons. Russia, meanwhile, has said the U.S. was jumping to conclusions over Syria. Iran has warned a U.S. attack on its ally Syria would embroil the oil-rich region in conflict. Stimulus programs tend to weaken the greenback to spur recovery, which makes oil an attractive buy on dollar-denominated exchanges.
GOLD
Gold prices posted strong gains on Tuesday after the dollar dropped amid expectations that the U.S. may unleash military strikes against Syria in response to reports that Damascus has used chemical weapons amid its internal conflict. Gold and the dollar tend to trade inversely from one another. Concerns that the U.S. may launch limited missile strikes against Syria for its alleged use of chemical weapons in its internal conflict steered investors away from the dollar on Tuesday. U.S. Defense Secretary Chuck Hagel said earlier the military is ready to take action against Syria if called upon by the White House. On Monday, U.S. Secretary of State John Kerry said the world would hold Syria accountable for using chemical weapons. Russia and China, meanwhile, have warned against strikes against Syria, while Iran has said a U.S. attack would embroil the region in conflict. Uncertainty over U.S. military measures sent investors favoring the yen over the dollar, which sent gold prices gaining.
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