Gold rose the most in 10 weeks as energy costs surged to a record and the dollar weakened, boosting the appeal of the precious metal as a hedge against inflation. Silver also gained.
Crude-oil futures reached $US127.82 a barrel, the highest ever, and the dollar fell for the first time in four sessions against the euro. Gold is still down 13% from a record $US1033.90 an ounce on March 17, when oil and the euro set previous highs.
Historically there is a positive correlation relationship of 0.90 for gold and crude oil, but this relationship is out of whack, and due to adjust. Despite gold has been rising sharply for the past 2 days, there is a lot of catching up to do.
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Gold rose the most in 10 weeks as energy costs surged to a record and the dollar weakened, boosting the appeal of the precious metal as a hedge against inflation. Silver also gained.
Crude-oil futures reached $US127.82 a barrel, the highest ever, and the dollar fell for the first time in four sessions against the euro. Gold is still down 13% from a record $US1033.90 an ounce on March 17, when oil and the euro set previous highs.
Historically there is a positive correlation relationship of 0.90 for gold and crude oil, but this relationship is out of whack, and due to adjust. Despite gold has been rising sharply for the past 2 days, there is a lot of catching up to do.
Brendan,
Thanks for the insight.
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