VOA常速英语:Gold, Oil Prices Up as Investors Seek Safe Haven

NEW YORK— The up-and-down prices of oil and gold mirror the unsettled world situation, and both reflect the economic squeeze most nations currently face.

Analysts are talking about the oil crash being over, with prices stabilizing in the mid-$30-a-barrel range — from a recent low of $26 — despite record supply levels. That's a 30 percent increase in the past two weeks.

The jump in the price per barrel has given rise to predictions that oil has bottomed out. Meanwhile, 413 oil rigs have been shut down in the United States because of an oil glut — with thousands of jobs lost.

"The supply and demand picture for oil is such that there's such a big glut over supply on a daily basis from the production side that, even if the demand side picks up marginally, we're still not going to eat up that for quite some time,” said commodities trader Eric Zuccarelli.

And gold, according to Zuccarelli, has inched up because of interest rates in the United States and around the world.

Interest rates and gold have an inverse relationship. Generally, rising interest rates are bad for gold prices, while decreasing rates are good. In a zero-to-negative interest rate environment, gold prices usually benefit. The Japanese and European Central banks currently have negative interest rates.

"We did see a very sharp move over a two-and-one-half-year period down to about 10.50 [$1,050 per ounce of gold] on the gold,” Zuccarelli said, “at which point the [Federal Reserve] finally began to raise interest rates for the first time since the world economy crashed. … As a consequence, the gold found some footing and reversed its downside and has rallied up to 12.50 [$1,250 per ounce of gold]."

As primarily a metals trader, Zuccarelli said commodities are in a waiting game.

"A lot of the industrial metals are stuck in much of the same world as oil, waiting for a true demand picture to come and sop up some of that excess supply,” he said. “So, whether it's copper — which I trade on a daily basis — which has put in pretty much of a bottom under $2, or some of the industrial metals — whether it's zinc, lead, tin, nickel, steel — most of the industrial complex is starting to find support, but not necessarily ready for the rallies that we've seen in the past."

There are still questions about how far the price of gold will move, but in recent weeks it has been a good investment. However, like oil, the length of gold's rally is hard to predict.