Speculators are wondering over the volatility of oil and gold market as its graph soaring to a pinnacle level that nobody ever seen before. Of course there must be some driving factors behind this surge. What is really driving oil, food and Gold Prices higher -- commodity demand or money supply...?

"You can't go to bed these days without waking up to higher prices for everything" says Dan Denning for The Daily Reckoning in Melbourne, Australia...

Crude futures in New York hit $130 overnight, and now everyone is wondering what's next -- $150...$200...?

Kevin Kerr back in the States says that the combination of peak North American driving season (the Memorial Day holiday this weekend) and a touch of financial speculation will pressure prices higher. If so there must be an ease in the situation and should get relief after it. But there is no such signs have seen.

Is it the time to play a blame game? Uncertainty already was there since the US dollar's devaluation to a paper value. Then what are driving factors? Is it demand? Is it speculation? Is it OPEC punishing George Bush for the war in Iraq? The oil cartel thinks there's plenty of oil. It's the declining US Dollar that's to blame for record high Dollar-oil prices, asks Denning.

OPEC says that for every one percent decline in the Dollar on the currency markets, oil rises by $4 per barrel.

The solution to high oil prices, then, is not increased supply or reduced demand, but a stronger dollar. Or so OPEC says � and there is certainly some truth to it. But a truly "strong Dollar" policy is not likely from the US Fed or Treasury any time soon.

And meanwhile, as a tangible good whose supply cannot be increased by a central banker, the oil price (a little like the Gold Price) tells you there's too much paper money chasing too little stuff.

It is seen that US dollar's failure to put pressure on oil prices despite its recent ballyhooed rally. It is still facing same threat of that it had been undergone before. Dollar is falling again against Euro, the Yen, and the Pound.

The Dollar is giving back some of its gains. It's now falling again vs. the Euro, the Yen, and the Pound (the four other ugly contestants in this Global Currency Beauty Pageant...where the winner is the least ugly), said Denning

The story of the gold is not different. Denning said that the gold appears to have completed its consolidation after the first charge to $1,000 per ounce. After regrouping, shaking out the weak hands, and giving the dollar its due, Gold is on the march again.

"What the speculators may not know is that they have the fundamentals on their side and not just the technicals. That's always a good thing in a trade, when you have more than one thing going your way", he said.

In gold's case, dollar selling is driven by strong technicals. The dollar is "retracing" its recent rally. Beyond the charts are the facts about the global currency market. The Fed and Bank of England do not look like raising interest rates this year. Australia might and the European Central Bank might.