Gold and oil rise on weaker dollar

The crude oil prices rose on Thursday, contributing to a weaker dollar after the International Energy Agency reiterated that global demand is growing faster than OPEC+ can increase production, and demand will outpace supply until at least the end of 2021.

An anticipated global energy shortfall could force oil demand to surge by half a million barrels per day and could do more harm than good. This could stoke inflation and delay the recovery of the worldwide economy from the COVID-19 pandemic.

WTI is reacting positively to the IEA report, climbing to highs close to 80.87 dollars per barrel.

The US Treasury bond yields started to decline after the US Bureau of Labor Statistics data revealed that the Core Consumer Price Index (CPI) remained unchanged at 4% yearly in September. The 10-year T-bond yield fell nearly 3%, which led to a drop in demand for the greenback, which sank to 10-day lows.

As Brexit news and BOE rate hike bets spur demand for the GBPUSD, the currency trades above 1.3710.

In the BoE's policy minutes last month, officials were split over whether certain pre-conditions for a rate hike had been met. However, investors expect interest rates to rise from their current 0.1% before the end of the year.

With natural gas prices soaring and supply-chain bottlenecks abound, the BoE expects inflation to exceed 4% by year's end and remain around it in the first half of 2022, encouraging market bets that it will hike rates soon.

In intraday trading, gold reversed a dip to the 1786 region by making a hammer candlestick and moved into positive territory. After surging into near one-month highs, bulls are now looking to extend the momentum above the psychological level of 1800.

Events of today

US employment data and producer price index (PPI) data for September are due later in the day to appear on the US economic docket. These data are unlikely to spark any significant reactions from the US.