Gold Hits Fresh Peak Around $820 As Oil Prices Surge

Source:

"With the two external drivers of gold a weak dollar and strong oil together conspiring to lift the metal higher, we are now in range of a move to the all-time nominal high," said UBS analyst Robin Bhar.

Gold hit its highest price since January 1980, following record high oil prices which stoked inflation jitters.

The precious metal rose to as high as 819.93 usd per ounce, its highest price since the 1980 peak of 850 usd, just as London's Brent oil hit a record high of 92.36 usd per barrel.

"As the consensus predicts another draw of (US) inventories, rebounding crude oil prices might push gold to a fresh 27-year high," said Dresdner Kleinwort analyst Peter Fertig.

A weekly US report due out tomorrow is expected to show crude oil supplies in the world's top consumer dropped for another week, and analysts are expecting the oil price to hit the 100-usd milestone.

Gold moves in line with oil prices as investors hedge against energy-led inflation, and in the opposite direction to the dollar which is seen as an alternative asset...

"With the two external drivers of gold a weak dollar and strong oil together conspiring to lift the metal higher, we are now in range of a move to the all-time nominal high," said UBS analyst Robin Bhar. But, he warned, "Assuming that 850 usd trades, a scramble for upside could see gold push higher still. But one thing is sure, once the dust settles, gold will likely correct sharply lower."

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe