Price of gold and oil slump to lowest levels in years as greenback rises and US pumps out shale oil

Photo: Gold price drops to four-year low but jewellery still
 in demand (Yuriko Nakao : Reuters)

The spot price of gold has slumped to its lowest level in four years.

It dropped almost US$5 overnight to settle at US$1,167 US an ounce, a level last reached in 2010.

The weakness is attributed in part to the strong US dollar which hit a four-year high yesterday.

The weaker Australian dollar is giving the precious metal some support locally, but investors have heavily sold down gold company shares.

At today's exchange rate of 86.86 US cents, the Australian gold price is $1,342 an ounce.

Gold analyst with Kitco.com, Jim Wykoff, says it's possible the price will drop even further.

"The door is open to a significant 'leg down' in the price, and a move to the US$1,000 level can't be ruled out."

Although the appetite for bullion and coins is subdued, an increase in consumer spending in America is expected to drive greater gold jewellery purchases.

Some commentators are also pointing to the American mid-term elections, saying traditional gold buyers are waiting on the sidelines to see the outcome.

High greenback and high volumes drive down oil price also

The oil price has continued to drop and has reached the lowest level in two years, after the surprise move by Saudi Arabia to reduce the price for the crude it sells to the USA.

At the same time, Saudi Arabia increased the price of oil for some Asian markets.

Saudi Arabia is the world's largest oil exporting nation and many expected it would cut back production to deal with the global glut in supply.

West Texas intermediate crude oil fell 2.2 per cent to US$78.80 a barrel, its lowest level since June 2012.

Brent crude oil fell to US$84.80, a drop of 25 per cent from US$115 in June.

Source:- http://www.abc.net.au/news/2014-11-04/gold-and-oil-prices-drop-against-strong-us-dollar/5865282