Oil Price Rise Could Support Gold

A rise in oil prices could turn out to be supportive for gold if inflation fears take centre-stage, says IG Markets analyst Stan Shamu. Nymex front-month April crude hit a nine-month high of $106.48/bbl Tuesday with risks skewed to the upside, Dow Jones technical analysis shows. "Should the oil price continue to rise, it could be more supportive of gold," Shamu says. Some investors use gold as a hedge against inflation as a store of value. However, in the near-term he says a small bit of profit-taking is weighing on prices, but it is not sizeable to warrant a substantial pullback. "I wouldn't be surprised if in the near-term, gold continues to trade in a range," he says; he adds, gold needs to break above $1,763/oz to move up further. Spot gold is at $1,755.85/oz, down $4.45 from its previous close.