(Kitco) – April 22, 2019 (Reuters)- Brent crude prices jump 3 percent to highest since Nov. 2018 – Gold inched up on Monday, moving away from a near 4-month trough touched in the previous session, drawing support from a drop in equities and a jump in crude oil prices. Spot gold was up 0.2 percent at $1,277.67 per ounce, by 1228 GMT, having touched $1,270.63 on Thursday – its lowest since Dec. 27. The market was closed on Friday.
Asian shares slipped, weighed down by underperforming Chinese stocks, while oil prices rallied on news the United States is likely to ask all importers of Iranian oil to end their purchases or face sanctions. Higher oil prices were influencing gold, said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers. “While the intensity of correlation between oil and gold has reduced, buying in one asset class is supporting the other,” Trivedi said.
Gold is closely correlated to oil as the metal is often seen as a hedge against oil-led inflation. However, a firmer dollar capped gold’s gains after data showed the United Sates’ economic growth may have picked up in the first quarter after a false start. U.S. retail sales increased by the most in 1-1/2 years in March, data showed on Thursday. “The disaster over the weekend in Sri Lanka is providing some safe-haven demand besides some interest in physical buying, which is also offering support to gold prices,” said Afshin Nabavi, senior vice president at MKS SA. Gold is considered a safe investment during political or economic uncertainties. Attacks on churches and luxury hotels in Sri Lanka on Sunday killed 290 people and wounded more than 500. Nabavi said strong resistance at $1,280 was capping gold’s move higher, along with a stronger dollar.
Following the Good Friday holiday, markets in Britain, Germany and France remain closed for Easter Monday.
Posted By :
Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com