Gold prices sparkled this week, surging close to 1,000 dollars per ounce for the first time in about a year as investors sought a safe haven from turmoil on world stock markets, analysts said. The price of crude oil zigzagged as traders tracked the worsening outlook for the global economy amid plunging equities.
PRECIOUS METALS: The price of gold soared as high as 999.1 dollars per ounce, which was last seen on March 18, 2008, dragging other precious metals higher. "Investors have evidently been purging any potential risk in their portfolio and turning to the perceived safe haven of gold which touched the underside of 1,000 dollars," said BetOnMarkets analyst Dave Evans.
Gold is now trading close to the record high of 1,032.70 dollars which was struck on March 17 last year. By Friday on the London Bullion Market on Friday, gold jumped to 989 dollars an ounce at the late fixing from 933.50 dollars a week earlier. Silver rallied to 14.28 dollars an ounce from 13.37 dollars. On the London Platinum and Palladium Market, platinum gained to 1,086 dollars an ounce at the late fixing on Friday from 1,055 dollars a week earlier. Palladium gained to 216 dollars an ounce from 213 dollars.
OIL: Crude oil prices sank in London as many traders took their cue from weak stock markets and the world-wide economic slowdown that has slashed energy demand, analysts said. "Fears over a deteriorating global economic outlook sent equity markets tumbling... as investors shed riskier positions, with oil prices tracking them lower amid weakening demand concerns," said Sucden analyst Nimit Khamar.
Global equities dived Friday as investors ran for cover amid deep concern over the troubled financial sector and a spreading world-wide downturn, dealers said. Wall Street stocks fell sharply, one day after falling to six-year lows on gloomy economic data which underlined the depth of a US slowdown. Oil prices had rebounded sharply Thursday after the US Energy Information Administration (IEA) posted a surprise fall in US crude reserves that raised the prospect of renewed demand in the world's biggest energy consumer.
New York crude rallied almost five dollars and Brent oil jumped more than two dollars after the IEA said US crude stocks fell 200,000 barrels in the week to February 13, after several weeks of big increases. However, a greater-than-expected rise in petrol stockpiles indicated that energy demand was still low, according to traders. And fresh data underscored the deepening recession in the United States, as it emerged that continuing claims for US unemployment benefits rose by 170,000 to 4.987 million for the week ending February 7.
Oil prices have slumped from record highs above 147 dollars a barrel reached last July, as the market has been hit by weaker energy demand because of the global economic downturn. Last week, the Opec oil producers cartel trimmed its forecasts for global oil demand, forecasting that it would shrink by 0.67 percent in 2009 because of "economic depression" in industrialised countries.
By Friday on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in March rose to 37.80 dollars a barrel from 35.98 dollars a week earlier. On London's InterContinental Exchange (ICE), Brent North Sea crude for April sank to 40.48 dollars a barrel, from 45.58 dollars a barrel.
BASE METALS: Base metals prices tumbled across the board as traders worried about the global downturn cutting demand. By Friday, copper for delivery in three months dropped to 3,171 dollars a tonne on the London Metal Exchange from 3,449 dollars the previous week.
-- Three-month aluminium dipped to 1,301 dollars a tonne from 1,378 dollars.
-- Three-month lead fell to 1,028 dollars a tonne from 1,159 dollars.
-- Three-month tin decreased to 10,501 dollars a tonne from 10,900 dollars.
-- Three-month zinc slipped to 1,088 dollars a tonne from 1,163 dollars.
-- Three-month nickel plunged to 9,721 dollars a tonne from 10,452 dollars.
COCOA: Cocoa prices continued to retreat after striking a 24-year high of 2,045 pounds a tonne in London last month on supply concerns. By Friday on Liffe, London's futures exchange, the price of cocoa for delivery in May dropped to 1,803 pounds a tonne from 1,899 pounds a week earlier. On the New York Board of Trade (NYBOT), the March cocoa contract sagged to 2,450 dollars a tonne from 2,663 dollars.
COFFEE: Coffee prices continued their downwards trend. By Friday on Liffe, Robusta for delivery in May slid to 1,560 dollars a tonne from 1,601 dollars a week earlier. On the NYBOT, Arabica for May declined to 111.05 US cents a pound from 114.50 US cents.
GRAINS AND SOYA: Maize and soya prices also beat a retreat. By Friday on the Chicago Board of Trade, maize for delivery in May fell to 3.58 dollars a bushel from 3.73 dollars the previous week. May-dated soyabean meal - used in animal feed - slid to 8.68 dollars from 9.57 dollars. Wheat for March dropped to 5.26 dollars a bushel from 5.48 dollars.
SUGAR: Sugar prices held steady and analysts forecast a stable demand outlook. "The demand for sugar should remain relatively stable also in the economic crisis," said Dresdner Kleinwort analyst Eugen Weinberg. "This is largely owing to the growing world population but also rising living standards in developing countries.
"In the industrial countries, though, where sugar consumption has barely risen in past years, sugar consumption should be curbed somewhat by the economic crisis." By Friday on Liffe, the price of a tonne of white sugar for delivery in May climbed to 392.50 pounds from 391 pounds a week earlier. On NYBOT, the price of unrefined sugar for May eased to 13.10 US cents per pound from 13.22 cents.
RUBBER: The price of rubber fell on weak demand. However, dealers however expect the price to edge higher in the week ahead with some demand coming from China. On Friday, the Malaysian Rubber Board's benchmark SMR20 fell to 135.10 US cents per kilogram, compared with 138.35 cents a last week.
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