For Teachers: Lessons on Oil and Gold

The Week in Review is provided by The Stock Market Game, which is a curriculum-based teaching tool that allows students to invest a hypothetical $100,000 online stock portfolio to learn about long-term saving and investing.

The Stock Market Game Week in Review: March 10-14

The mortgage crisis and credit woes continued to be highlighted in the headlines last week and Wall Street responded to the Labor Department's unchanged Consumer Price Index (CPI) released Thursday, Mar. 13. The CPI, a key inflation reading, showed prices maintained the levels from the previous month. Economists had expected a 0.2% rise in this measure after the rise in February left overall prices 4% above where they were 12 months earlier and down from the 4.3% rise in January. Cheaper energy helped keep overall consumer prices in check, the Labor Department said. This report boosts the chance for a big interest rate cut at the Fed's meeting this week, as the increase is still a bit above the perceived comfort zone of central bankers .

We received positive feedback from many teachers for focusing the previous Week in Review on the energy sector, which is performing well in these trying times. So now we're highlighting two selected commodities that are also holding up.

Oil

Last week, crude oil hit an all-time high of $111 per barrel before settling at a record close of $110.33, up 41 cents from the previous session. Analysts blame oil's ascent on the weak dollar, which dropped to yet another low against the euro. The price of a gallon of gas is also following crude's recent surge and could rise as high at $3.75 a gallon this spring, analysts predict.

Your students may want to examine refining companies such as Valero (VLO), Sunoco (SUN), or Frontier (FTO), which all specialize in turning crude oil into gas. ExxonMobil (XOM), Chevron (CVX), and ConocoPhillips (COP), also have refining operations.

Gold

Gold has also performed well over the past year and hit a new milestone last week, rising to $1,000 an ounce. This is great news for investors, but consumers are not likely to find a bargain as they shop for jewelry. The weak dollar and record-high crude prices are thought to be the cause of the increased price of gold.

Anglo American (AAUK) may be interesting for your students to research. The company is based in the United Kingdom and is one of the largest mining companies in the world. In addition to gold, it is also involved in mining platinum, coal, and copper, and owns a large portion of the world's largest diamond producer, De Beers. Two additional gold companies that have had great performance over the past year include Kinross Gold (KGC) with a 99% return and Yamana Gold (AUY), with a 35% return.

Recession

With the constant discussing of a possible recession , you may want to have your students take a look at "Recessionland," our new issue of StockTalk which follows up on the interest rate cuts presented in the most recent issue of In the News. This issue provides readers with an understanding of "recession" and its impact on the economy. It is presented as a conversation between a boy and his computer Avatar. To access this and other issues of the newsletters, please go to the Stock Market Game Web site's Teacher Support Center and click the "Publications" link in the "In the Classroom" section. From there, select "Show all publications listed by name," and click "Next".

To learn more about The Stock Market Game, go to www.stockmarketgame.org.

>To order reprints of this article, click here: Reprints