Oil prices have slumped over $3 per barrel – a 4% drop on the New York Mercantile Exchange – so far today on the back of worldwide growth fears and a stock market slump in the US which has spread to the UK and Asian markets.
Crude has dropped from $100 last month and near $115 in May.
The US dollar also continues to fall against a trade-weighted basket of other currencies, following a downgrade of the nation’s debt by rating agency Standard & Poor’s and renewed fears of disappointing growth declining into a double dip recession.
Meanwhile, gold – seen by investors as both a hedge against inflation and a store of value – has reached record highs, moving over $1,700 an ounce for the first time, as money moves out of more volatile commodities such as oil.
The precious metal has gained more than 19% this year, partly due to loosening monetary policies by the Federal Reserve in the US and Bank of England in the UK, and concerns about the underlying weakness of the Euro as debt fears spread beyond the peripheral countries of Ireland, Greece and Portugal to Italy and Spain.