Reuters, Feb. 25, 2008
LONDON – Gold prices rose today as the dollar fell against the euro and oil prices moved up to almost $100 a barrel, while platinum held firm. Spot gold was up at $947,70/$948,50 a troy ounce in early trade from $943,70/944,50 late in New York on Friday. It hit an all-time high of $953.60 on Thursday.
The dollar was hovering near a three-week low against the euro, having slipped on renewed worries about recession in the US and expectations of further interest rate cuts by the US Federal Reserve.
“We’re back to watching the dollar and oil,” a Europe-based trader said.
Traders said precious metals had also been boosted by news that SA’s Gold Fields had forecast gold production for the third quarter would fall between 20 and 25% compared with the December quarter.
Crude oil extended gains to above $99 a barrel, boosted by Iran’s warning that more UN sanctions would be “costly” to Western powers, and after Turkey’s incursion into northern Iraq.
“We believe that rising energy costs and subsequent inflation risk, and expected interest rate cuts from the Fed have been significant drivers of recent upward momentum in the gold price,” Standard Bank said in a note.
Spot platinum was at $2,151/2,158 an ounce from $2,148/2,153 on Friday.
The metal used to make autocatalysts and jewellery has come under upward pressures from power shortages in SA, which produces 80% of the world’s platinum. Last week it rose to an all-time peak of $2,192 an ounce.
“Given the scale of volatility in the market and the heavily overbought conditions, platinum remains extremely vulnerable to a sizeable correction,” TheBullionDesk.com said in a note.
“But with the metal set to move into a deeper supply deficit, further price gains seem inevitable.”
Silver was at $18,08/18,13 an ounce from $17,98/18,03 late on Friday. Earlier today it hit a 27-year high of $18,13 an ounce. Palladium was at $513/517 from $498/503.
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