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Oil, gold futures fall, dollar rises as hopes for March rate cut fade

Both oil (BZ=F, CL=F) and gold (GC=F) prices fell early Monday as the dollar index (DX=F, DX-Y.NYB) rose on expectations the Federal Reserve will not cut rates in March. Yahoo Finance's Ines Ferré breaks down the latest action in the commodity markets.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Stephanie Mikulich

Video transcript

SEANA SMITH: Let's take a look at oil and gold, both on the move this morning. Lots of speculation about what exactly delayed rate cut is going to mean for these commodity trades. Ines Ferre, standing by at the big board-- the closer look at some of the downward pressure that we've seen on prices this morning. Ines.

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INES FERRE: Yeah, Seana. And we are seeing downward pressure on WTI and Brent Crude futures. I do want to point out the US dollar index, this is at a three-month high. So this is also causing pressure on commodities, which are invoiced in US dollars. So let's take a look at the board, where we're seeing WTI down about 8/10 of a percent. We're also watching Brent Crude, that is down about 6/10 of a percent.

I'm going to pull up a six-day chart here, so you can see the decline that we also saw on Friday, as well. You do have those comments over the weekend from Jerome Powell, basically, saying that a rate cut in March is unlikely. So that is putting a pressure on commodities because if you cut rates, then economic activity goes up. And so, therefore, you would see demand for oil going up. So that's why we're seeing some of the pressure here with crude oil.

You also do have the US that is pushing for a truce in Gaza. I also want to note that one analyst is saying that we haven't really seen much of a supply disruption despite what has been going on in the Middle East because US producers have been outputting a record amount of oil in the market. So we are seeing all of-- any tensions from the Middle East, what we have seen in the Red Sea, all of that is, basically, priced into oil right now.

And then just following up with gold futures, we are seeing gold that is up about $2,033 per ounce. Analysts are expecting this to maintain above the $2,000 level. But, again, the US dollar index going up also putting pressure on gold, as well. Guys.