Commodities - February 23, 2005
February 23, 2005
Metals
London - Gold spiked to its highest in almost two months yesterday, above $430, with dealers looking for further gains as the dollar tumbled and made bullion more attractive to non-US investors.
HSBC metals analyst Alan Williamson said: "The euro is moving in the right direction so things are looking very positive - there's not much in the way of resistance before $440."
In London gold was fixed at $432.85 (R2 490) an ounce in the afternoon. Spot gold ended European trade at $433.80/434.50 an ounce. It had reached a high of $433.90 - a level last seen in early January. Gold closed at $427.00/427.70 in London on Monday.
Dealers said near-term dips in gold could not be ruled out, but the market seemed to be gathering momentum to test higher ground. Analysts have said that bullion, which had struggled to rally, should gain further this year as they expected the dollar to slide.
Silver also burst higher to hit a six-week peak of $7.54 an ounce, lifted by gold's advance and by price gains in the industrial metals market, where copper futures touched 16-year highs on the shifts in currency values. Silver stood at $7.55 in London late in the day, for a gain of 18c since Monday.
Spot platinum added $13 an ounce to $874 in New York, and palladium advanced $3 to $180.
Oil
London - Oil prices climbed above $50 a barrel to a 12-week high yesterday, bolstered by a late bout of cold winter weather in Europe and the US, and a sharp decline in the dollar versus other currencies.
Statements from Opec members Kuwait and Libya that there was no need for the cartel to cut output did little to curb the rally.
Brent crude in London gained $1.62 to $48.35 a barrel (R1.75 a litre). US crude oil jumped by $2.10 a barrel to $50.45, the highest level since November 30.
Nymex April futures, which will become the front month contract from today, jumped to $51 a barrel. Prices are up sharply from last year's average of $41.48 a barrel, but off the contract's peak of $55.67 in October.
Cold weather on both sides of the Atlantic has helped stoke late-winter demand for heating oil, giving a fresh boost to prices since US inventories of the fuel are still quite low.
Europe is much colder than normal this week, while the US northeast is just emerging from an unseasonably chilly weekend.
Support also came from a further sharp decline in the dollar, which fell to a five-week low against the euro and eased against the yen.
Opec is keeping a close watch on global stockpiles to ensure that an overly large build-up does not send prices spiralling lower when demand eases after the northern winter.
Kuwait's Sheikh Ahmad said he saw no signs of oil stockpiles rising above 52 days of forward demand cover, well below the 56 days that Opec producers have said was excessive.
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