Gold Tracks Crude Higher

Updated from 12:17 p.m. EST

Gold futures forged ahead Friday in concert with a more robust oil price.

Contracts for February delivery of bullion closed up $8.30 at $636.40 an ounce on the Comex division of the Nymex.

The exchange-traded funds that hold bars of gold, streetTracks Gold Shares (GLD Quote) and iShares Comex Gold Trust (IAU Quote), were following the futures prices in recent activity, both up 1.3%.

"Gold is basically tracking the price oil," says Bernard Hunter, director of precious metals at ScotiaMocatta in Toronto.

Crude oil for spot delivery was recently selling for $51.91 a barrel, up $1.43. Energy prices are seen as a key catalyst of inflation and many investors choose to purchase gold as a hedge against rising prices.

Hunter says that the other key factor for gold is the strength of the dollar, which tends to move inversely in value with bullion. In recent activity, the dollar was slightly stronger. One dollar would buy 121.26 yen, up from 121.21 yen late Thursday. One euro would purchase $1.2965 virtually unchanged.

If new data from Economic Cycle Research Institute is anything to go by, the advance for the greenback may continue. The Manhattan-based organization says its Weekly Leading Index grew 4.4% last week, up from a revised 4.1% for the prior period.

That marked the 13th consecutive uptick in the indicator.

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