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 stabilise prices took kept oil below $59 a barrel this week , after a 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 decision along with the Nigerian cut in output will still make oil volatile with the possibilty of a sharp rebound following the recent falls.
The Federal Reserve’s decision not to increase 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.
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