The oil-production agreement announced Wednesday by OPEC members may end up helping gold, says HSBC.
Normally, oil and gold tend to move together, although the relationship has not been pronounced lately, the bank points out. The OPEC deal to cut output was the first since 2008. “If the agreement is as important as the financial media are reporting, then we believe gold may be impacted,” HSBC says.
“Further oil price rallies may feed more convincingly into the gold market, especially if other non-oil commodities also rally, and the broader commodity indices, such as the GSCI, rise. This could help stabilize gold prices, which have clearly been on the defensive recently.”