Gold hit a a record peak this week, as investors sought shelter from slumping equities amid rumors of a France credit rating downgrade and worries over Societe Generale’s Greek debt exposure.
However, the French government categorically denied that it might be the next major country to lose its “AAA” status and the ratings agencies said they did not plan to downgrade. Societe Generale also denied it was facing trouble over its exposure to Greece.
Many other commodities sank in value on the back of mounting concern that the eurozone debt crisis and weak US economy could help push the world back into recession.
PRECIOUS METALS: Gold surged overnight on Wednesday to a record US$1,814.95 per ounce, extending its recent record-breaking run as European debt woes flared up, one week after Washington’s historic credit rating downgrade by Standard and Poor’s.
“Panic among market players emerged again ... amid speculation about a downgrade of France’s credit rating and the nosedive on global financial markets continued,” Commerzbank analyst Michaela Kuhl said.
A technical sell-off began on Thursday, and volatility was dampened after smaller traders were crimped when the CME exchange hiked margins by 22 percent on contracts.
By late Friday on the London Bullion Market, gold jumped to US$1,736 an ounce from US$1,658 the previous week.
Silver eased to US$38.29 an ounce from US$39.24.
On the London Platinum and Palladium Market, platinum rose to US$1,800 an ounce from US$1,709.
Palladium rose to US$747 an ounce from US$742.
OIL: Crude oil prices finished the week on an upbeat note as traders eyed better-than-expected US retail sales data that suggested the economy might not be in such bad shape after all that send stock markets rising.
“Crude oil prices have rebounded on the back of a weaker US dollar and firmer equity markets,” Michael Hewson of CMC Markets said.
By late on Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery next month had risen to US$108.48 a barrel from US$106.93 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for next month climbed to US$86.63 a barrel from US$84.70 the previous week.
BASE METALS: Base or industrial metals were not spared from the market convulsions, with prices collapsing before rallying toward the end of the week.
Copper sank more than 7 percent on Monday and Tuesday to US$8,446 a tonne, its lowest level since Dec. 1, before climbing to between US$8,500 and US$9,000.
“A similar story has been seen across the metals,” William Adams of Fast Markets said. “Volatility is likely to remain high across the markets as there remains a massive amount of uncertainty.”
By late Friday on the London Metal Exchange, copper for delivery in three months sank to US$8,886 a tonne from US$9,189 the previous week.
Three-month aluminum fell to US$2,421 a tonne from US$2,460.
Three-month lead dipped to US$2,390 a tonne from US$2,422.
Three-month tin decreased to US$24,600 a tonne from US$24,650.
Three-month zinc slid to US$2,195 a tonne from US$2,274.
Three-month nickel slid to US$21,690 a tonne from US$23,085.