The precious metal has been having a good year so far and it should now look to challenge the $960 level mark. Gold is in high demand as investors seek a
safe haven to offset rising inflation amid surging oil prices.

It is only fair to say that commodities prices are soaring on strong demand from emerging economic powers such as China and India. Most likely the key reason behind oil incline comes amid supply worries following comments from members of OPEC that it is unlikely to change its output.

The price of oil reached a record high of $101.32 a barrel yesterday caused by fears of supply disruptions. This surge in oil prices supported and gave the metal the help it needs to reach a record high of 953.70 an ounce.

Currently, commodities are outperforming other assets and equities as investors are suffering on concern over the state of the US economy. It is clear that oil prices dropped slightly today to record a low of $97.16 a barrel as the EIA report showed a stronger than expected inventories indicating sufficient supply. Similar to oil, gold prices slightly declined today to fetch a low of $940.65 an ounce as traders cashed in some profits yet it is expected to rally again.

Still the greenback is the biggest loser as it continues to drop against majors which of course favors to gold prices. Investors worry that a potential recession in the US could spread into broader market and suppress global growth which leads us to robust gains in the bullion market especially when it is highly expected that the Feds will cut in rates lowering the value of the dollar.