New highs for basically everything against new lows for the dollar! Commodity prices are defying gravity as they continue soar in the air with nothing to stop them. The dollar is really weak and as long as the Feds don't find a bottom to the cancerous cell in the heart of the U.S. economy then the sky is the limit! The precious metal's appeal as the hedge against inflation became more tempting now that the Fed's hinted for a further rate cut. The bullion recorded an all time high of $964.99 yesterday as investments poured in the commodities market. It seems that the four-digit mark is not far away if the pace the yellow metal is at continues. But still no one knows how investors might react now that the metal is pretty much vulnerable to profit taking. Majors have reached overbought areas and equity markets' volatility has dropped which might apply pressure on gold. The strength of commodity prices, inflation concerns, weak dollar and a potential rate cut are benefiting the metal like no other. Silver also seized the opportunity as well to hit a 27 year high at $19.48 per ounce.

After a seventh consecutive gain in crude inventories reported by the EIA yesterday, crude dipped just below the $100 per barrel level to trade around $99.43 per barrel level. Yesterday marked a new day in the history of oil as it surged to record another all time high at $102.08 per barrel. Demand is weakening in the U.S. as the risks remain to the upside. Increasing oil prices will eventually cause significant negative consequences on the already weak U.S. economy. Although demand and supply are in balance and it is expected that an incline in stockpiles will continue through the second quarter of the year, it was calculated that a $10 increase in the price of a barrel hits the U.S. GDP to an extent that it could decline by $6.9 - $13.8 billion in current dollars.

Another testimony by the Fed Chairman is awaited later today which will hopefully do anything else other than further weaken the dollar. After Mr. Bernanke's statements signaling that we will witness another rate cut soon, the dollar plunged to record an all time low against the Euro at $1.5144. As the Chairman promised to act in a timely manner and Vice President Mr. Donald Kohn said that growth is in danger, the poor data released from the U.S. economy just applied more burdens on the shoulders of the dollar.