Gold Rebounds as Oil Prices Fall, Dollar Weakens

Gold prices rebounded to nearly $4,350 in early Asian trading on Friday, as weaker US Dollar and falling oil prices provided support. The precious metal had reached a six-week low earlier this week.

The recent Federal Reserve rate hike and projections of further increases have weighed on gold prices, but the current decline in energy costs is easing inflation concerns. Crude oil prices dropped to a one-week low on signs that supply disruptions in the Middle East could ease.

'We've been tied very closely to an inverse relationship with energy prices based on those inflationary pressures,' said David Meger, director of metals trading at High Ridge Futures. 'Energy prices are down fairly dramatically today. So it's these lower energy prices that are removing some of that pressure on the gold market.'

The US Federal Reserve raised interest rates by 25 basis points to a range of 3.75% and 4.00%, with Fed officials' projections pointing to at least one more increase this year. Traders now price in nearly a 53.1% chance of another US rate hike when the central bankers meet next in October.