The precious metal moves in line with oil prices as investors hedge against inflation and in the opposite direction to the greenback as it is seen as an alternative asset.
From a short term perspective gold is neutrally positioned in the middle of its recent range, said John Reade, analyst at UBS 'The metal is searching for fresh direction with crude and EUR/USD off their recent highs, but still present talk of inflation and risk aversion rising again supporting the metal. We hold our forecasts of $900/oz in one month and $850/oz in three months.'
