Gold Defies Oil Spike as US Reserve Hits Record Low

The price of gold rose to $4,078 on Thursday morning, up about $10 from the previous day. This is unusual because oil prices have spiked 7.9% this year five times before, and each time, gold fell.

This time was different due to three changes: the rate-hike signal was already priced in, Brent crude did not push sharply higher, and the US Strategic Petroleum Reserve has reached a 43-year low of 307.7 million barrels.

The oil reserve's depletion means it can no longer cushion Iran-driven energy cost shocks from being passed on to consumers as inflation. This increases the case for holding physical gold outside of traditional monetary systems.