The ‘logic’ regarding the oil price is that the big Middle Eastern players are diversifying their petro-dollars into EUR in particular. They had been buying CHF in massive quantities but I guess there’s a limit to how much of a relatively small currency one can buy. With the oil price increasing sharply, the amounts of EUR/USD to be bought increases accordingly.
There’s a bit of a ‘chicken-and-egg’ situation when it comes to the relationship between precious metals and the USD; is it the weakening USD which is driving demand in PMs or is it the other way around? Whatever, as long as the strong uptrend continues in Gold and Silver, the FX market will not be comfortable buying USD.
