Commodity prices slip on recovery doubts

By Hibah Yousuf, staff reporter

NEW YORK ( -- Commodity prices sank Thursday as the dollar continued to gain ground on concerns over the strength of global economic recovery.

What prices are doing: Crude oil for March delivery fell $3.84, or 5%, to settle at $73.14 a barrel Thursday. Oil fell 25 cents Wednesday to settle at $76.98 on a surprise build in crude supplies.

Click chart to view other commodity prices.
Click chart to view other commodity prices.

Gold for April delivery fell $43.70, almost 4%, to $1,068.30 an ounce.

What's moving the market: Commodity prices came under pressure by a stronger dollar, which rose against the euro and the pound.

The demand for the buck, which is perceived as a safe haven investment, has been rising as investors worry about the strength of the global economic recovery.

Debt concerns facing Greece, Portugal and Spain have resurfaced, pushing the dollar higher versus the euro.

Commodities, including oil and gold, are priced in dollars, and a firmer greenback weighs on prices.

What analysts are saying: "I think there is a lot of disappointment that the economy is not recovering as briskly as it has from prior recessions," said Tom Pawlicki, analyst at MF Global in Chicago. "U.S. growth has been steady, while European economies are weakening."

Unless the European Central Bank takes action to stabilize its markets, Pawlicki said the dollar will continue to strengthen, and drive oil and gold prices lower.

He said the trend could last at least a couple more weeks, sending oil prices toward $70 a barrel and gold prices between $1,020 and $1,046 an ounce.  To top of page

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