Gold smashed records this week and silver hit 31-year highs as the safe-haven metals were boosted by a “perfect storm” of fears over Middle East unrest, Portugal’s debt and the Japan nuclear crisis.
The pair won further support as the US dollar fell against the euro following weak manufacturing data in the US before the currency firmed at the close on strong US growth figures.
“Safe haven buyers and a persistently weak US dollar continues to push precious metals to new highs,” Spread Co analyst Ian O’Sullivan said. “We are seeing almost a ‘perfect storm’ for metals prices as ongoing chaos in the Middle East, the earthquake-nuclear disaster in Japan and continuing worries over the European economy with Portugal and Ireland’s problems.”
PRECIOUS METALS: Gold hit a record US$1,447.82 an ounce on Thursday on the London -Bullion Market and silver jumped to US$38.16 an ounce — its highest level since February 1980.
“Gold and silver are justifying their reputation as safe havens, which is hardly surprising in the current climate,” Commerzbank analyst Carsten Fritsch said. “In addition to the war in Libya, the unrest in the Arab region and the disaster in Japan, the debt crisis in eurozone periphery countries has also returned with a vengeance to the center of market interest.”
A weaker greenback boosts US dollar-priced commodities because they become cheaper for buyers using rival currencies. That in turn stimulates demand and prices.
By late Friday on the London Bullion Market, gold rose to US$1,436 an ounce from US$1,420 a week earlier.
Silver increased to US$37.68 an ounce from US$35.15.
On the London Platinum and Palladium Market, platinum -advanced to US$1,752 an ounce from US$1,720.
Palladium climbed US$754 an ounce from US$727.
OIL: World oil prices rallied in a week dominated by unrest in Libya and the Middle East.
“The main focus [for traders] remains on the ongoing political unrest in Libya, Yemen and Syria,” said Myrto Sokou, an analyst at Sucden brokers. “It was certainly a very volatile and unpredictable week with fairly nervous trading conditions across the commodities and equity markets.”
Libya was producing 1.69 million barrels a day before the unrest but this has since ground to a halt.
By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in May climbed to US$115.10 a barrel from US$113.29 one week earlier.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for May increased to US$105.71 compared with US$100.22 for next month’s contract a week earlier.
BASE METALS: Industrial metals rose as traders went bargain hunting after recent losses that were sparked by demand fears in the wake of Japan’s earthquake and tsunami.
“With ... equities strong and the dollar generally weak, it may be that the dip following the earthquake has just been taken as another buying opportunity,” FastMarkets analyst William Adams said.
Japan is the world’s second-biggest consumer of nickel and third-largest of tin.
By late Friday on the London Metal Exchange, copper for delivery in three months rose to US$9,771 a tonne from US$9,550.50 a week earlier.
Three-month tin rose to US$31,800 a tonne from US$29,550.
Three-month nickel was higher at US$27,050 a tonne from US$26,750.
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