Gold futures make big gains

While financial markets have in general been volatile, gold investment has been anything but – the precious metal continued at a high price level this week, with futures leading the way.

Gold for December delivery rose $6.70 to hit $742.20 per ounce on the New York Mercantile Exchange today (September 27th), with those looking to buy gold at the deferred December date showing bullish reaction to market indicators.

Crude oil prices are key among these in leading the way for gold, with a one per cent hike in oil value today allowing gold to follow suit while other sectors are hit by the prospect of rising fuel prices.

Another crucial factor in determining the gold price is the strength of the dollar with the American currency plummeting to new lows against the Euro and dropping 0.4 per cent on the dollar index that tracks its progress against a host of other currencies.

Analysts at Action Economics told MarketWatch: "Gold is trading higher on the back of robust oil prices and a renewed rise in the euro against the dollar, which both increase the appeal of the precious metal as a hedge against inflation."

Some concerns remain, however, about the possibility of a US slowdown diminishing oil demand, with subsequent effects on the gold price, but for now the US economy looks to be fighting back, with gold investors showing bullishness in any case.