...Which raises the question: If oil can only hold its own in the face of a falling buck what would it do if the dollar was rising?As it turned out, the dollar bounced the next day;
Ditto for gold....
The interesting thing on the charts is that WTI didn't test the $52.00-$52.50 area where price had turned back last October and in May:
Front futures $49.14 down 45 cents.
On to the headline story from Economic Calendar, Aug. 15:
A firmer dollar tone and expectations of firm global supplies have been instrumental in shaking out long speculative oil positions with prices declining to 3-week lows.Oil prices continued to push higher in early US trading on Monday with WTI peaking close to $49.20 p/b.There was, however, a swift reversal with a quick move back to below $49.0 p/b and selling pressure intensified. The stronger dollar during the session had a significant impact in undermining crude prices.There were also further doubts surrounding Chinese oil demand, although position liquidation looked to have a more substantial impact in undermining support.The latest US EIA report also indicated that US shale production was likely to increase in September for the 9th successive month to 6.15mn bpd which maintained expectations that there would be ample global supplies.The dollar maintained a firm tone into the US open, although trading ranges narrowed ahead of the US retail sales data....MORE
Finally, back to that August 1 post:
...As for gold we still think we'll see $875 before the decline is over but it's been boring, $1200 to $1300 for months now, so we haven't been posting. $1279.70, up $6.30.The September contract got to $1292.90 on this run before turning back:
$1276.70 down $13.70.