Weaker dollar sends oil, gold prices higher

The price of crude oil was higher Tuesday on a weak dollar, which declined on reports that some oil producing countries are looking to remove the dollar as the currency used in oil trades, as well as on gains in equities markets.

November contracts for West Texas Intermediate crude added 47 cents to $70.88 per barrel on the New York Mercantile Exchange while Brent crude was up 52 cents to $68.58 per barrel on the ICE Futures Europe exchange in London.

Nymex November gasoline and November heating oil each added 2 cents on the session, to $1.77 per gallon and $1.81 per gallon respectively, while November natural gas dropped 11 cents to $4.88 per million British thermal units.

Gold prices were much higher Tuesday, climbing to record highs after the US dollar weakened on reports in the UK newspaper The Independent that Gulf Arab states, along with other oil producers including Russia, China, Japan and France have held secret talks aimed at displacing the greenback as the currency in which oil is traded.

The dollar fell and gold climbed even after the reports were denied by those named as parties to the alleged discussions.

Rumors that led to the weakening of the dollar sent gold prices to record highs on the session.

December contracts went as high as $1,045 per troy ounce in New York before easing slightly to a gain of $21.90 on the session to $1,039.70 per troy ounce.

Other precious metals followed gold higher, with December silver up 76 cents to $17.30 and January platinum added $23.50 to $1,325.30 per troy ounce while, in mid-morning trade, December palladium was up $3.15 to $306.45 per troy ounce.

Among base metals, December copper added 6 cents to $2.78 per pound in New York on data released Monday which showed that the US services sector expanded in September for the first time in a year, raising hopes that demand will rebound.

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