Profiting From Dips In Gold And Oil

The price of gold reached record highs last December, with prices at $1,217 per ounce. But 2010 hasn't been good to the glittering metal as prices have been holding in the range of $1,050 to $1,140. Oil prices, which started to rise throughout 2009, have also come to a halt, holding in the low to mid $70s.
The reason: a temporary increase in the value of the U.S. dollar. As the dollar increases, gold and oil prices typically decrease and vice versa. “Temporary” is the key word here regarding the rising value of the U.S. dollar.



Recently, concerns about euro zone debt, especially Greek debt, have caused investors and speculators to sell the euro and buy the dollar. The financial media has been reporting that Greece will probably receive a bailout from other European Union members. Once the terms are clear, the dollar will probably fall again and gold should recover.
Other global factors that have caused the dollar to rise temporarily include better than expected GDP numbers, investor expectations that the U.S. Federal Reserve will raise interest rates sooner than previously expected and Chinese efforts to curb growth and head off potential bubbles and inflation.
All that aside, the dollar is bound to fall again for several reasons. Among them:
--Huge U.S. budget deficits over the next 10 years.