Why is gold linked with oil

Question

How come the price of spot gold is linked so closely with the price of oil? (i.e if the price of oil falls, the price of gold will also more than likely fall).

Answer 1

in my own perspective, oil and gold are two of world's essential commodity

Answer 2

It's not. It moves accordingly to the rise of inflation, the strength of the economy, the dollar. It's a fear indicator.  

Answer 3

It isn't.

Except they are both denominated in US$

Answer 4

Gold is not link to price of oil per say.

Generally Gold is used to hedge against inflation.

Since the current environment the stock market is correction mode, the housing market is burst and financial is a mess so the place people put their money is in commodity market aginst weakening dollar.

So once the dollar strengthen and ease the inflation pressure, the price of commodity will fall.

Hope it helps.

Cheers

Answer 5

Commodities tend to trade in sympathy with each other - oil, grain, gold, natural gas, copper, steel...

When one goes down - particulary as the "lead dog" oil has been - investors tend to sell others in anticipation of a drop in price.

They all tend to be inverse to the strength of the dollar, simply because they are commodities.