Gold Futures Bounce Back with Rebounding Crude Oil
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Photo Credit: covilha
Gold has shown signs of recovery this week as it trades higher following a rebound in crude oil and a decline in the US currency versus the euro. Gold is once again in demand as hedge against inflation. Meanwhile Silver surged to just over 2 percent.
Oil has just recently reached 1.3 percent as the euro recovers from a three-day low. This week, gold plunged 3.7 percent, counting from the middle of March, this is gold’s hardest fall, after the US dollar’s huge losses versus major currencies, and oil fell from a record. Gold’s highest attained level was in March at $1,033.90 per ounce.
Regarding delivery intended for August, gold futures surged $9.80, or 1.1 percent, to $891.50 per ounce. In May, gold increased 3.1 percent. This year, it has reached 6.4 percent.
“Any sell-off in the energies and rally in the dollar have been leaning hard on the metals. The sell-off was overdone. The ratio between gold and crude is out of whack. If there is a sell-off across the board in commodities, the metals will be down the least. Gold and silver will hold because they haven’t rallied as much,” said Eagle Futures Inc. trader Nick Ruggiero, in New York.
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