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08.09.2021 01:30 PM
Oil and gold declined due to the US dollar's strengthening, while aluminum rises

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Crude oil prices fell simultaneously with a sell-off in commodities caused by the growth of the US dollar. The reason was also the uncertainty of demand, both after the weak employment report in the United States and after the decision of Saudi Arabia to reduce prices in Asia. Oil prices showed some recovery after good data on Chinese imports and exports, but this increase did not last long until the dollar began to rise.

But while there is a certain deficit in the oil market, WTI oil may have a limited decline, even if the US dollar rally gains momentum. WTI oil has serious support before the level of $ 65.

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Gold prices fell as Treasury yields rose on expectations that a delayed recovery would allow the Fed to withstand higher inflation in the near future. Wall Street is more concerned about inflation than ever. And with the Fed likely to tighten in December, gold's outlook may turn out to be a short-term negative.

As soon as the market can survive these next few months of price pressure, the reality of global disinflation is likely to suddenly put an end to the growth of Treasury bond yields, which will provoke a resumption of gold purchases for many investors.

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In turn, Aluminum has sharply increased as the coup in Guinea threatened the supply prospects in this market. The deficit continues to grow, so the metal may update the record value of the decade. The West African country of Guinea controls the main supplies of bauxite and iron ore. Geopolitical risks remain elevated, and this may not slow down the growth of prices for the affected commodities even with a sharp rise in the US dollar.

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Irina Yanina,
Analytical expert of InstaForex
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