LONDON, March 15: Gold prices topped $1,000 for the first time and oil futures rocketed to a record high $111 this week as the dollar plunged to all-time lows against the euro.
Investors dived into commodities as they sought a haven amid fears of a US recession and global economic slowdown. Investment in gold and oil is also seen as a hedge against future rises in inflation.
Since the commodities are priced in dollars, a tumbling greenback makes gold and oil cheaper for buyers using stronger currencies, encouraging demand.
The euro struck a record-high $1.5688 Friday after US investment giant Bear Stearns announced it was being baled out because of liquidity problems and following weak US consumer confidence data, traders said.
OIL: Oil prices enjoyed another record-breaking run this week as traders sought refuge from turbulent stock markets and the dollar’s downwards plunge.
New York’s light sweet crude jumped to a record high 111 dollars per barrel on Thursday. London’s Brent oil hit an historic $108.02 Friday.
The dollar story, inflation concerns and fears of slower growth in the US are still dominating news headlines, said Sucden analyst Andrey Kryuchenkov.
Oil has rocketed 90 per cent over the past year as the market is driven by tight supplies, geopolitical concerns in key producer nations and strong demand from China and India.
Prices have gained about nine per cent in value since the start of 2008, accelerating after the Opec crude exporters’ cartel held output at current levels last week.
The Organisation of Petroleum Exporting Countries also on Friday left unchanged its estimate for growth in world oil demand this year.
Opec said while high prices and mild winter weather would brake demand in major industrialised countries, the market for crude would be strong elsewhere.
World oil demand in 2008 is forecast to grow by 1.2 million barrels per day to average 86.97 million bpd, unchanged from our previous estimate, the organisation said in its March monthly report.
By Friday, New York’s main oil futures contract, light sweet crude for delivery in April, was at $109.30 up from $105.42 a week earlier.
Brent North Sea crude for April jumped to $106.59 from $105.42.
GOLD: Gold prices soared to a record high $1,007.40 per ounce on Friday as the dollar slumped to record lows versus the euro.
The gold-favourable environment continues to evolve positively for the metal, with expectations of further Fed rate cuts and inflationary concerns boosting safe haven buying, said analysts at Barclays Capital.
Gold has risen by about 17 per cent so far this year, underscored also by supply problems in South Africa, the world’s largest producer.
Gold has been on an upward trend since the start of January when the yellow metal jumped above $850 per ounce, smashing a 28-year-old record.
Global demand for gold is also surging owing to increased jewellery purchases in China and India
On the London Bullion Market, gold stood at $1,003.50 per ounce at Friday’s late fixing, up from $972.50 a week earlier.
Silver jumped to $21.07 per ounce from $20.22.
PLATINUM: Platinum prices rose but failed to forge new heights a week after striking an historic peak of 2,301.50 dollars per ounce.
“The platinum market is projected to record a hefty deficit this year, further depleting the low level of above-ground inventories and thus exposing prices to further upside potential,” said analysts at Barclays Capital.On the London Platinum and Palladium Market, platinum climbed to $2,107 per ounce at the late fixing Friday from $2,082 a week earlier.
Palladium gained to $512 per ounce from $506.
BASE METALS: Tin reached a fresh historic high of $20,700 per ton on supply disruptions and strong demand as the dollar weakened.
New record highs on oil also gave the complex some strength, said BNP Paribas analyst David Thurtell.
Mine costs will be pushed higher as the cost of running heavy equipment surges, he added.
By Friday, copper for delivery in three months eased to $8,490 per ton on the London Metal Exchange from $8,495 a week earlier.
Three-month aluminium fell to $3,156 per ton from $3,198.
Three-month nickel dropped to $32,850 per ton from $33,175.
Three-month lead rose to 3,101 per ton from $3,090.
Three-month zinc slid to $2,608 per ton from $2,630.
Three-month tin jumped to $20,700 per ton from $19,299.
GRAINS AND SOYA: Wheat prices reached a record closing high of $12.82 per bushel Wednesday in Chicago on tight supplies and strong demand.
By Friday on the Chicago Board of Trade, wheat for May delivery had risen to $11.73 per bushel from $11.05 the previous week.
May-dated soyabean meal -- used in animal feed -- fell to $13.55 from $14.08.
The price of maize for May delivery gained to 5.55 per bushel from $5.47 a week earlier.
On LIFFE, London’s futures exchange, the price per ton of wheat for November delivery rose to 160.50 pounds from 158.75 pounds a week earlier.
COCOA: Cocoa prices hit the highest point for 28 years in London at 1,525 pounds per ton.
A strike over pay by dock workers at ports in the Ivory Coast continued, bringing to a standstill export shipments from the world’s biggest cocoa producer, said analysts at Barclays Capital.
COFFEE: Coffee prices advanced in London and New York.
By Friday on LIFFE, Robusta for May delivery had risen to $2,673 per ton from $2,507 a week earlier.
On the NYBOT, Arabica for May delivery rose to 151.45 US cents per pound from 149.90 cents.
SUGAR: Sugar prices gained.
The rally looks to have been sparked by further weakness in the dollar,noted analysts at Czarnikow.
By Friday on LIFFE, the price per ton of white sugar for May delivery advanced to 355 pounds from 349 pounds a week earlier.
On NYBOT, the price of unrefined sugar for May delivery spiked to 13.34 US cents per pound from 13.25 cents.
RUBBER: Malaysian rubber prices rose on strong demand and tight supplies due to heavy rains.
The supplies are tight and I don’t see that changing for the moment, said a dealer.
On Friday, the Malaysian Rubber Board’s benchmark SMR20 gained to 268.45 US cents per kilo from 267.40 a week earlier.—AFP
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