Gold prices rocketed to a record high beyond US$1,070 per ounce this week, while oil bounced to a one-year peak, as the US currency crumbled in value against the European single currency.
“So far, dollar weakness has helped lift a number of different assets: crude oil, precious metals, copper and equities,” GFT Global Markets analyst David Morrison said.
“But at some stage a rising oil price conflicts with rising equities,” he warned,” he said. “If oil does rally on strongly from here then it will constitute a serious headwind to economic recovery, and this will impact on corporate profitability; especially at a time when companies have great difficulty in passing on their costs to consumers.”
PRECIOUS METALS: The price of gold hit a record US$1,070.80 per ounce on Wednesday, as the precious metal was boosted by the weak dollar, before pulling lower on profit-taking. In recent days and weeks, gold has enjoyed a record-breaking run as the tumbling dollar has stimulated demand.
In the wake of gold’s stellar run, sister metal silver hit a 14-month peak of US$18.08 an ounce. Palladium reached the highest points since August last year, while platinum scaled a level last seen in September last year.
By late Friday on the London Bullion Market, gold eased to US$1,047.50 an ounce from US$1,051.50 a week earlier.
Silver slipped to US$17.31 an ounce from US$17.63.
On the London Platinum and Palladium Market, platinum climbed to US$1,346 an ounce at the late fixing on Friday from US$1,337.
OIL: The price of oil struck a one year-high above US$78 thanks to the weak US dollar and signs of a pick-up in energy demand, traders said.
New York’s main contract, light sweet crude for November delivery, hit US$78.17 a barrel on Friday — the highest level since Oct. 14 last year.
A US government report published on Thursday showed gasoline stocks fell by 5.2 million barrels in the country last week. Analysts polled by Dow Jones Newswires had expected a rise of 700,000 barrels.
By Friday on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in November surged to US$77.32 from US$71.89 a week earlier.
On London’s InterContinental Exchange (ICE), Brent North Sea crude for December delivery jumped to US$75.93 a barrel compared with US$70.14 for the expired November contract a week earlier.
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