Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures rose on Monday after the crude-oil contract neared $120 a barrel, raising the metal's appeal as a hedge against inflation. Gold for June delivery gained $6.80, or 0.8%, to $896.50 an ounce on the New York Mercantile Exchange. Crude futures rose overnight to a new record high of $119.93 a barrel in electronic trading.

"Metals could not help but notice the explosive move in crude," said Edward Meir, an analyst at MF Global, in a research note. "We expect commodities in general to remain firm at least through to midweek, as the strong energy complex sets the tone, while the weakness in the dollar should also help." The dollar rose slightly on Monday, limiting gold's gains, as traders weighed the odds of the Federal Reserve further reducing benchmark U.S. interest rates. Dollar-denominated commodity prices tend to rise when the currency loses ground. The dollar index, which tracks the value of the greenback against a basket of other currencies, rose slightly to 72.68. See full story.