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Gold hits another record as oil inches up
Spot gold raced higher to a record high of $966.70 an ounce on Thursday, as a fall in the dollar against the euro and strong oil prices boosted investor buying, traders said.
- Reuters
- Published: 00:30 February 29, 2008
- Traders at the New York Mercantile Exchange. A weak dollar and tight supplies are likely to keep crude prices high.
- Image Credit: AP
London: Spot gold raced higher to a record high of $966.70 an ounce on Thursday, as a fall in the dollar against the euro and strong oil prices boosted investor buying, traders said.
Gold was last quoted at $966.00/$966.90 an ounce at 1606 GMT, against $957.50/$958.30 in New York late on Wednesday.
Meanwhile, oil rose towards $102 a barrel, trading within sight of its record high, after a supply cut in Nigeria, Africa's top exporter.
Investors have pumped cash into commodities in recent weeks, betting on signs the US Federal Reserve will keep cutting rates to prop up the economy.
"The energy complex is a dollar/inflation story as investors have moved into commodities as a hedge against inflation," said Nauman Barakat, senior vice president at Macquarie Futures USA.
Pressure
"The ever-weakening dollar, upward inflationary pressures and geopolitical tensions are having a greater impact on the market than the fundamentals."
US crude rose $1.96 to $101.60 a barrel by 1602 GMT, having hit a record $102.08 on Wednesday. London Brent crude gained $1.78 to $100.05.
Also boosting prices, output at Nigeria's Brass River crude stream was cut by 20,000 barrels per day this week due to sabotage on a pipeline, Italian oil firm Agip said. The leak was fixed on Wednesday and output restored.
Expectations that the Organisation of Petroleum Exporting Countries (Opec) will not raise output at its meeting on March 5 also supported oil, as did winter fuel demand in the US and Europe.
The group will most likely keep its oil output steady at next week's meeting, the head of Libya's Opec delegation, Shokri Ganem, said yesterday.
Outlook
Analysts who use past price movements to predict future direction said a move a few dollars higher for US crude, also known as WTI, could lead to further gains.
"With the dollar in free-fall, we would be concerned that if WTI rallies above $102-$103 it would trigger a further surge towards $110-$115," Barclays Capital technical analysts said in a report.
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