Gold Rises on Oil Price Increase and Inflation Concerns

Gold went as high as $936.50 an ounce today before settling at $926.60/928.40 on the last quote in New York. That's a slight increase over Monday's close of $935.30/926.10.

Record-breaking oil prices continue to hold the gold market up, even as other economic data put downward pressure on the metal. Oil closed at $113.79 a barrel, up by $2.03.

Even so, there was some sell-off as prices for U.S. producers was better than expected. That makes it more possible the Fed won't cut interest rates at their next meeting.

"Oil is clearly a factor. Technically also, gold looks better because it broke through a weak trend line resistance," said Michael Jansen, analyst at J.P. Morgan Securities.

"But I think we will continue to consolidate. The recovery from under $900 is not hugely convincing and there are still concerns that the physical market is very subdued. Overall, we will tend to trade in the $900-$950 range for a bit longer."

With the India wedding season in full swing, physical demand for gold remains fairly strong, although high prices have kept other parts of Asia from buying.

Gold futures in the U.S. ended at $932 an ounce for June delivery, up by $3.30.