Gold Tracks Crude Higher

"It's bullish," says Anirvan Banerji, director of research at ECRI. "There's no question that there is no danger of a recession."

However, he warns that it doesn't necessarily mean the Federal Reserve will need to hike interest rates to contain any burgeoning inflation. He notes that forward-looking price level indicators have trended lower since October 2005.

Other things being equal, a high-growth, low-inflation economy would auger a strong dollar, and provide gold with a headwind.

Turning to the gold patch, BMO Capital Markets initiated coverage of Northern Orion Resources(NTO Quote) with a market perform rating.

The Philadelphia Gold and Silver Index was gaining 1.6% in recent activity, driven in part by gains from Freeport-McMoRan Copper & Gold(FCX Quote) and Goldcorp(GG Quote), up 3.5% and 2%, respectively.

In base metals, copper was also rallying slightly, closing up 3 cents at $2.52 a pound on the Comex.