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(Kitco News) – The oil market has managed to push back above $100 an ounce, and according to some analysts, that will be good news for gold investors.

The oil market has recently seen significant volatility, with prices falling nearly 13% and briefly falling to a two-month low of around $95 a barrel this week. At the same time, the gold market saw solid selling pressure, with prices falling 4% in two days as prices fell to nearly a one-year low and tested long-term support at $1,730 an ounce.

Most analysts note that the gold market is mostly at the mercy of the U.S. dollar, which is in an extraordinary uptrend pushing to another 20-year high above 100 points; along with the strong U.S. dollar, weak oil prices aren’t helping gold attract new bullish momentum.

The drop in oil prices has helped to temporarily cool some fears that inflation pressures will continue to spiral out of control, which is a negative for the gold market.

Looking forward, analysts have no clear consensus on where oil prices will go. One factor that could determine the future for gold and oil is whether the U.S. and the global economy fall into a recession. A recession would weigh on oil prices and the entire commodity complex, which could weigh on gold.

Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said he is looking for lower oil prices throughout the year.

“WTI’s 1H price spike may be the last gasp of an enduring bear market. Crude on July 6 at about the same price as at the end of 2007 and below the consumer price index over the period paints the world’s most significant commodity as a clear dud. Facing demand destruction and supply elasticity amid plunging global GDP, consumer sentiment and central banks aggressively hiking interest rates, we see risks tilted toward more of the same for crude prices,” McGlone said in a research note Thursday.

Jim Wyckoff, senior technical analyst at Kitco.com, also expects to see lower oil prices in the near term, which could impact gold prices.

“With crude oil prices trending lower, on recession worries, gold will likely follow — until oil prices stabilize and the downtrend ends. Right now, the fears of recession and lower consumer and commercial demand for metals is trumping the historically bullish aspects of higher inflation being supportive for the metals,” he said. “Once oil prices stabilize, gold traders will focus on other fundamentals such as geopolitics, inflation and economic data, including central bank policies.”

Wyckoff added that he sees oil prices stabilizing at around $85 a barrel.

However, other analysts continue to see strong oil prices even as recession fears continue to grow. Ole Hansen, head of commodity strategy at Saxo Bank, said that while slower growth will lead to lower oil consumption, the market still faces a supply issue.

“The market is tight and that situation is unlikely to improve any time soon,” he said.

Hansen also doesn’t see a strong correlation between gold and oil. He added that he remains bullish on gold throughout the year as an essential safe-haven asset.

“Gold has been hurt by lower inflation expectations and the much stronger dollar. I still see it higher due to geopolitical and financial risks, but first, we need to see industrial metals (silver) stabilize before getting our recovery hopes too high,” he said.

Robert Minter, director of ETF Investment Strategy at abrdn, said he also sees fundamental reasons to be bullish on oil. He added that systemic supply issues and low inventories are impacting the oil market regardless of demand.

“From my perspective, this is a sentiment vs. fundamentals issue for the most part,” he said. “Investors are on the sidelines while they figure out if [central bank] hawkishness causes a deep recession or if there is a soft landing,” he said.

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