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Wednesday, May 28, 2008

Oil is Relaxing & Gold might start rising

Oil spent another day retreating from its recent record price of $135 per barrel. Currently the WTI crude oil is trading at 130.20, and traders are expecting oil prices to fall further as demand is slowing down. Gold which has been trading in a tight range is going to be getting a lot of attention today, when US releases its GDP numbers. While most analysts are expecting inline numbers, there is a risk that a weaker then expected number will push gold higher as traders will be selling US equities and buying gold.

The FTSE is currently quoted up 20 points, and will probably stay that way mainly because there are no economic news out of the UK. This all will change when US releases its GDP numbers. There will be lots of volatility when those numbers are posted, mainly because most traders are split on where the number should be.