Oil and gold prices slid this week, in part due to worries that China could soon raise interest rates to tame its high inflation — fears that also weighed on copper after it struck a record high.
OIL: Crude oil prices sank this week after news of an unexpected rise in US crude reserves and on fears that China would take action to cool its robust economic growth, paring energy demand.
“The recent fundamentals, with large builds in oil inventories and ongoing concerns that China might raise interest rates, triggered long liquidation [selling],” Sucden Financial analyst Myrto Sokou said. “Investors might be cautious, as crude oil prices are likely to trade sideways, struggling for some clear direction in the short term.”
The oil market also fell after almost reaching US$100 a barrel last week, for the first time since October 2008, following news of a temporary shutdown of the Alaskan pipeline.
By Friday afternoon on London’s Intercontinental Exchange, Brent North Sea crude for delivery in March sank to US$96.86 a barrel compared with US$98.65 for the February contract a week earlier.
On the New York Mercantile Exchange, Texas light sweet crude for March delivery dropped to US$89.36 a barrel compared with US$91.23 for the February contract.
PRECIOUS METALS: Gold prices slipped, but palladium, which is used in the manufacture of catalytic converters, reached a decade-high at US$828 an ounce.
“China is again proving to be the driver of demand” for palladium, analysts at Commerzbank said.
Gold hit a record US$1,431.25 on Dec. 7, boosted by its safe--haven status as investors fretted over the eurozone debt crisis.
By late Friday on the London Bullion Market, gold fell to US$1,343.50 an ounce from US$1,367 a week earlier.
Silver dropped to US$27.14 an ounce from US$28.27.
On the London Platinum and Palladium Market, platinum edged up to US$1,817 an ounce from US$1,811.
Palladium jumped to US$814 an ounce from US$795.
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