Gold in demand with rising oil

[vishaldon]

The story goes on, oil goes up and there you see gold going up because gold is used as a hedge against inflation when oil prices rise. There are some investors who buy gold when energy (oil) expenses climb. This was again seen yesterday that crude oil closed at $61.72 a barrel, rising as much as 32 cents in the New York Mercantile Exchange. And this rise in oil obviously sends a signal of inflation fears and so gold also rose by $2.50, ending at $592.05 an ounce in Singapore.

First of all OPEC's decision to cut oil supply to stabilize prices kept oil below $59 a barrel this week , after touching a peak of $78 in July, but yesterday attacks on three shell oil platforms in the Niger Delta in Nigeria forced production to be curtailed. But according to policymakers , OPEC's decision along with the Nigerian cut in output will still make oil volatile with the possibility of a sharp rebound following the recent falls.
The Federal Reserve’s decision not to increase interest rate at 5.25 % did not have any effect on the rising gold because it was not a surprise at all. And the only statement which the Federal Reserve gave was that the inflation risks still remain , indicating that if not now there may be a possible increase in interest rate later on.