Gold prices hit record highs close to US$1,500 this week, while oil and base metals fell on expectations that rising global inflation risks will lead to higher interest rates and slower growth.
PRECIOUS METALS: Gold reached record highs at the start of the week and continued higher from there to finish with an all-time peak of US$1,486.07 an ounce.
Investors piled into the safe-haven precious metal amid spikes to global inflation and fresh eurozone debt worries.
“The ongoing simmering European sovereign debt concerns and inflationary price pressures coming from ... China and the US continue to drive investors to buy the precious metals as an inflation hedge,” said Ian O’Sullivan, analyst at Spread Co trading group.
Record-breaking gold will likely soar past US$1,600 for the first time later this year, driven by fears over high inflation, consultancy GFMS forecast on Wednesday.
By late Friday on the London Bullion Market, gold rose to US$1,476.75 an ounce from US$1,469.50 a week earlier.
Silver climbed to US$42.61 an ounce from US$40.22.
On the London Platinum and Palladium Market, platinum fell to US$1,787 an ounce from US$1,803.
Palladium dropped to US$772 an ounce from US$798.
OIL: Prices slipped of 30-month highs, weighed down by a sharp inflation rise in China and predictions of weaker demand.
Oil prices slumped on Tuesday after the International Energy Agency (IEA) warned that recent high prices had started to hurt global demand for energy.
The Paris-based IEA warned that “there are real risks that a sustained US$100-plus a barrel price environment will prove incompatible with the currently expected pace of economic recovery.”
The IMF meanwhile warned that high oil prices were a key risk to solid global economic recovery.
Crude futures enjoyed a brief mid-week rebound as data showed US stockpiles of motor fuel slumped 10 times more than expected.
The oil market was also looking ahead to weekend elections in Nigeria, a key exporter of crude but which is regularly hit by supply disruptions owing to unrest between rebels and the government.
“Any political unrest created from the polls in Nigeria could further increase the geopolitical risk and may retrace recent losses in the price of oil,” said Nick Campbell, an analyst at energy consultants Inenco.
By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in June stood at US$122.57 a barrel, compared with US$125.33 for the May contract one week earlier.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for May dropped to US$108.42 from US$111.58.
BASE METALS: Tin prices struck another record high at US$33,600 a tonne thanks to strong demand, but later retreated along with most other base metals on fears that rate tightening by China would cut demand for raw materials.
By late Friday on the London Metal Exchange, copper for delivery in three months dropped to US$9,390 a tonne from US$9,896 a week earlier.
Three-month tin slipped to US$32,950 a tonne from US$33,100.
Three-month aluminum fell to US$2,677 a tonne from US$2,712.
Three-month zinc gained to US$2,640 a tonne from US$2,526.
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