The dollar, oil and gold: what moves CL and GC futures
How the U.S. dollar affects commodities, what drives crude oil and gold, their contract and tick values, and why index traders often lose money in them.
Crude oil and gold are two of the most traded futures after the stock indexes, and many prop traders try them sooner or later. They move for different reasons than ES and NQ, and both are tied to the U.S. dollar. Here's what drives each one, and why they can catch index traders off guard.
The U.S. dollar
Oil, gold and most commodities are priced in dollars around the world. The Dollar Index (DXY) tracks the dollar against a basket of major currencies like the euro, yen and pound. As a rough rule:
- A stronger dollar makes dollar-priced commodities more expensive for buyers using other currencies, which tends to weigh on oil and gold.
- A weaker dollar tends to support them.
- The dollar itself moves on interest rates: higher U.S. rates attract money into dollars. So Fed news moves the dollar, and the dollar moves commodities.
Crude oil (CL)
| Full contract | Micro | |
|---|---|---|
| Symbol | CL (1,000 barrels) | MCL (100 barrels) |
| Value of a $1 move | $1,000 | $100 |
| Value of one tick ($0.01) | $10 | $1 |
What moves oil:
- Supply: decisions by OPEC+ (the big oil-producing countries) to pump more or less, and disruptions like conflicts in oil regions.
- Demand: how strong the world economy is. A slowdown means less oil burned.
- The weekly inventory report: the U.S. Energy Information Administration publishes how much crude is in storage, usually on Wednesday at 10:30 a.m. New York time. It's a scheduled spike every week.
Gold (GC)
| Full contract | Micro | |
|---|---|---|
| Symbol | GC (100 troy ounces) | MGC (10 troy ounces) |
| Value of a $1 move | $100 | $10 |
| Value of one tick ($0.10) | $10 | $1 |
Gold pays no interest, so it competes with bonds. It tends to do well when real interest rates fall (rates minus inflation) and when fear rises, because investors see it as a safe place to park money. It often moves sharply on CPI, jobs and Fed days, at the same moment as index futures.
Why index traders get hurt in oil and gold
Many traders who are profitable in ES or NQ lose money in CL or GC. The markets have different rhythms, different news and different tick values, and a stop that's normal in NQ points can be very different in dollars on CL. The report card's Focus grade exists for exactly this: it shows whether the extra market is helping or quietly costing you. See How to find your biggest money leak.
What it means for a day trader
- If you trade CL, mark Wednesday 10:30 a.m. ET in your Morning prep plan every week.
- Size each market on its own. Work out your contracts from the stop distance and that market's tick value. Use the position size calculator.
- Add a second market only when your first one is consistently green, and track them separately.
Next in this series
Next: earnings season and the indexes. Previous: bonds and yields.
This article is for education only and isn't financial advice. Contract specifications and report times can change; check the exchange and the official calendar. Trading futures involves substantial risk of loss.