Long-term gold prices 'supported by oil'

Investors in gold should not be perturbed by the current consolidation, since prices are likely to rise in the long term.

This is according to analysts at Standard Bank - one of South Africa's largest financial service providers - who said that other commodities, as well as geo-political tensions, may serve to support gold prices.

"Oil prices at these levels should anchor precious metal investment demand as investors seek portfolio protection against rising global inflation expectations," said Standard Bank's Manqoba Madinane to Reuters.

Fluctuations in crude oil prices have been offset by disputes between Iran and the western world over nuclear weapons production.
Gold prices and oil prices traditionally move together in opposition to the price of the dollar, with bullion purchased as a hedge against inflation.

Earlier this month, analysts John Hill and Graham Wark of Citigroup said they believe gold will see a $1,000 an ounce average price during 2010.

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