Does higher oil support strong precious metals markets?
''Rise in crude propels gold to record high
Simmering tensions in the Middle East kept oil prices elevated and gold at record levels, creating an extremely nervous and volatile backdrop for equities amid concerns about the potential for rampant energy costs to derail the global recovery.
Fighting between rebels and pro-Gaddafi forces in eastern Libya fuelled fears that the country could descend into a long civil war, heightening worries about prolonged supply disruptions. Nagging concerns that civil unrest could spread further across the region added to the upward pressure on crude prices.
'Persistent uncertainty in the Middle East-north Africa region continues to support fears of contagion, while lost output from countries like Libya and the increasing likelihood of a push back in foreign investment is set to support longer-term prices even further,' said Amrita Sen, analyst at Barclays Capital.
Gavan Nolan, credit analyst at Markit, said the market's main near-term concerns centred around Saudi Arabia and Iran, Opec's two biggest producers.
'The Opec plan is for Saudi to cover any supply shortfalls caused by the unrest in Libya, so the potential for turmoil there will obviously place upward pressure on the oil price,' Mr Nolan said. 'There are signs that the contagion is spreading to Iran amid reports that there has been a major crackdown on protests, though the government is denying that any protests have taken place at all.'
Brent crude settled up $0.93 a barrel at $116.35 -- within sight of last week's 29-month high near $120. West Texas Intermediate, the US oil benchmark, jumped $2.60 to $102.23.
The latest spike in oil prices drove gold to a record peak above $1,440.''