High Oil Price and Low Dollar Push Gold Up

Source:

Non-commercial investors in U.S. gold futures turned bullish last week, hiking their long positions by around 20 percent in the week to May 20, data from the U.S. Commodity Futures Trading Commission showed on Friday.

Gold opened higher on Tuesday as further supply disruptions in Nigeria, the world's eighth-largest oil producer, and a weaker dollar, made the precious metal increasingly attractive. Spot gold stood at $927.00/927.90 an ounce by 0329 GMT, having earlier risen above $930, and up from $925.20/926.60 in New York late last week.

Both Britain and the United States were closed for public holidays on Monday.

A rise in oil prices above $133 on production problems in the North Sea over the weekend and in Nigeria on Monday when rebels blew up a pipeline, drove gold higher on Tuesday.

"I am tracking oil prices for direction. And the dollar is still weakening," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong."If gold holds above $910, it could go up to $950. If it falls below $910, it could go back to the $800s," he added.

Oil bellwether NYMEX crude oil was up 97 cents at $133.16 by 0333 GMT, having climbed earlier as high as $133.46 after rebels from Nigeria's southern Niger Delta blew up a Royal Dutch Shell oil pipeline on Monday, forcing the firm to cut production.

Spot gold rose as high as $935.30 last Thursday, its highest level in a month, on the day that oil prices rose above $135.00.

Non-commercial investors in U.S. gold futures turned bullish last week, hiking their long positions by around 20 percent in the week to May 20, data from the U.S. Commodity Futures Trading Commission showed on Friday.

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