Gold futures rise as oil surges to new record
NEW YORK (May 16) Gold futures surged early Friday, as crude oil's rally to a fresh record high above $127 a barrel boosted the precious metal's appeal as an inflation hedge.
Gold for June delivery rose $14.60 to stand at $894.60 an ounce on the New York Mercantile Exchange.
"The dollar is flat, but oil is again higher and this is contributing to gold's rally this morning," said Mark O'Byrne, director at Gold & Silver Investments Ltd., in a research note.
In energy trading, crude-oil futures rallied to a fresh record high of $127.43 a barrel, as bullish momentum returned to the market and traders rushed to buy energy futures. See Futures Movers.
On Thursday, the benchmark gold contract had surged $13.50 to close at $880 an ounce.
"Near-term downside risk remains in the market as reports from several trading desks indicate that retail investor demand is still weak and large specs are seen selling into strength," said Jon Nadler, senior analyst at Kitco Bullion Dealers, in a note to clients.
Still, it's been "a commendable turn in gold over the past two days," Nadler wrote.
Jon Nadler, senior analyst with Kitco Bullion Dealers, says we're looking at a period of relatively calm gold trading and says there is a risk of gold descending to $730. (May 14)On the currency markets, the dollar pared some of its losses after better-than-expected U.S. housing data for April. See Economic Report.
The dollar index, which tracks the performance of the greenback against other major currencies, fell 0.05% to 73.31. See Currencies.
The metals complex traded higher across the board.
July silver futures rose 26 cents at $16.95 an ounce, July platinum futures moved up $71 at $2,157.90 an ounce, June palladium rose $5.65 at $446.25 an ounce and July copper futures rallied 9 cents at $3.83 a pound
