Gold Spot Price AUD $6032.45

Silver Spot Price AUD $88.93

Platinum Spot Price AUD $2492.60

Western sharemarkets endured a horrible run this week as rising oil prices added another layer of pressure to an already nervous investment environment. Oil pushed back above US$100 a barrel as renewed supply concerns drove energy markets sharply higher, raising fresh fears that inflation could remain elevated for longer.

The VIX, often called Wall Street’s fear gauge, jumped around 8% during one session. While that does not guarantee further market losses, it shows traders are paying more for protection against volatility. With the United States, Europe and Australia all recording difficult trading sessions, confidence has clearly weakened heading into the weekend.

Expensive oil is particularly uncomfortable for markets because its effects spread throughout the economy. Higher fuel and transport costs can eventually reach groceries, manufacturing and household bills. This makes inflation harder to control and reduces the flexibility central banks have to lower interest rates when economic growth begins to struggle.

Gold and silver have been comparatively steady, although neither metal has delivered the decisive safe-haven rally some investors may have expected. Higher oil prices can support precious metals by increasing inflation concerns, but they can also lift bond yields and expectations for higher interest rates. That creates competing forces for gold.

Gold is now being squeezed by its rising 50-day moving average. If the price can hold above this closely watched level and markets remain unsettled, it may provide the foundation for another move higher. A fall beneath the moving average, however, would indicate weakening momentum and could invite a deeper pullback.

That makes next week particularly important. Global sharemarkets will be attempting to recover from a poor week, while gold must prove that it can withstand the pressure building beneath its current price. Either way, the tightening gap between gold and its 50-day moving average suggests that a more decisive move may not be far away.

This article is general market commentary only and should not be relied upon as personal financial advice. Consider the information carefully, conduct your own independent assessment and seek professional advice where appropriate before making any investment decision.

Enjoy today’s charts

Gold daily chart, with 50MDA