Gold price extends record-breaking run, oil leaps higher
Gold rocketed to record peaks this week, boosted by the weak dollar, while crude oil raced higher as supportive economic data sparked hopes of improving worldwide energy demand.
Many dollar-priced raw materials won support from the struggling greenback, which makes them cheaper for buyers using stronger currencies and so tends to stimulate demand.
PRECIOUS METALS: Gold prices hit a fresh record above 1,320 dollars per ounce here on Friday, ending a record-breaking week as the dollar stumbled on a disappointing US manufacturing survey.
Gold surged to an all-time pinnacle at 1,320.70 dollars per ounce, dragging sister metal silver to 22.15 dollars, which was last seen in September 1980.
The euro leapt to 1.3778 dollars in Friday afternoon deals, touching the highest level since March, after data showed that US manufacturing activity grew more weakly than predicted in September.
Gold traded at historic heights this week as the dollar was also weighed down by expectations of more stimulus spending by the US Federal Reserve.
"It's the same old story for gold again," said dealer Rajesh Patel at trading firm Spread Co.
"New highs are being reached on a daily basis with hedge fund and momentum buying adding to the general fear the Fed will start to introduce some form of quantitative easing (QE) at its next meeting in November.
"This is continuing to pressure a very weak dollar, helping drive gold higher. We could easily see 1,500 dollars reached by Christmas at this rate."
The dollar has faced strong selling pressure ever since the Fed hinted last month at more stimulus spending if the tepid US economic recovery cools further.
Meanwhile this week, palladium rose as high as 582.25 dollars per ounce, nailing the best level since February 2008, and platinum rallied to 1,685 dollars, which was last seen in mid-May.
By late Friday on the London Bullion Market, gold rallied to 1,316 dollars an ounce from 1,297 dollars a week earlier.
Silver advanced to 21.95 dollars an ounce from 21.35 dollars.
On the London Platinum and Palladium Market, platinum jumped to 1,679 dollars an ounce from 1,645 dollars.
Palladium rose to 571 dollars an ounce from 562 dollars.
OIL: The global oil market rallied this week as mostly upbeat economic reports painted a picture of healthy future demand for energy.
On Friday, London Brent oil climbed to 83.64 dollars per barrel -- which was last seen on May 5. And New York crude rallied as high as 81.47 -- a level last witnessed on August 10.
"Upside momentum is gathering pace in the oil market, driven by a combination of improving macro sentiment and constructive oil data releases," said Barclays Capital analyst Costanza Jacazio.
"Unexpectedly robust economic data from the US, following two strong oil market reports on Wednesday, helped create the condition for the push higher."
Traders set aside weaker-than-expected US manufacturing data on Friday to focus on upbeat news from China.
"Crude is trading higher, supported by encouraging Asian economic releases," said SEB Commodities Research analyst Filip Petersson.
A new survey out of China showing manufacturing activity picked up in September. The purchasing managers index rose to 53.8 in September from 51.7 in August, the China Federation of Logistics and Purchasing (CFLP) announced.
The results come after an independent survey by HSBC showed manufacturing hit a five-month high last month. The HSBC China Manufacturing PMI rose to 52.9 in September, up from 51.9 in August, as production and new orders rose.
A reading above 50 means the sector is expanding, while below 50 indicates a decline.
This week, oil prices have also soared on the back of a sharp drop in US crude stockpiles, which signalled rising demand, and a modest upgrade to economic growth in the key energy-consuming nation.
The market leapt on Wednesday after the US government revealed that crude oil inventories tumbled 475,000 barrels in the week ending September 24, more than forecast by most analysts.
On Thursday, traders were encouraged by data showing a slowdown in US jobless claims and stronger-than-expected second quarter growth, helping bolster hopes for recovery in the world's biggest economy.
Oil was also boosted by riots rocking Ecuador, which is a member of the 12-nation Organization of Petroleum Exporting Countries. The OPEC cartel pumps about 40 percent of the world's oil.
By late Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in November gained to 82.92 dollars a barrel from 79.38 a week earlier.
On the New York Mercantile Exchange, Texas light sweet crude for November rallied to 80.67 dollars a barrel from 76.56 dollars.
BASE METALS: Base metals mainly soared higher, with star performer copper striking a two-year high at 8,178 dollars on the back of the positive Chinese manufacturing data.
"A much better purchasing managers' index in China has enabled metals to make a strong start to trading" on Friday, said Commerzbank analysts.
By late Friday on the London Metal Exchange, copper for delivery in three months jumped to 8,159 dollars a tonne from 7,966 dollars.
Three-month aluminium rose to 2,371 dollars a tonne from 2,331 dollars.
Three-month lead climbed to 2,308 dollars a tonne from 2,304 dollars.
Three-month tin surged to 25,000 dollars a tonne from 23,900 dollars from a week earlier.
Three-month zinc eased to 2,230 dollars a tonne from 2,278 dollars.
Three-month nickel rallied to 23,900 dollars a tonne from 23,000 dollars.
GRAINS AND SOYA: Maize struck a new two-year peak and soya forged a one-year high, as the pair won support from stretched supplies, before pulling lower on profit-taking.
Maize hit 5.2875 dollars a bushel on Monday, reaching a level last seen in September 2008. On the same day, soya jumped as high as 11.34 dollars, touching a level last seen in June 2009.
By Friday on the Chicago Board of Trade, maize for delivery in December stood at 4.83 dollars a bushel from 5.21 dollars the previous week.
November-dated soyabean meal -- used in animal feed -- fell to 10.94 dollars a bushel from 11.26 dollars a week earlier.
Wheat for December sank to 6.68 dollars a bushel from 7.20 dollars.
COFFEE: Coffee futures gained ground.
By Friday on the New York Board of Trade (NYBOT), Arabica for delivery in December rose to 182.95 cents a pound from 179.15 cents the previous week.
On LIFFE -- London's futures exchange -- Robusta for January rose to 1,751 dollars a tonne, compared with 1,702 dollars for the November contract last Friday.
COCOA: Cocoa prices pulled lower.
By Friday On NYBOT, cocoa for delivery in December dipped to 2,776 dollars a tonne from 2,812 dollars a week earlier.
On LIFFE, cocoa for December fell to 1,874 pounds a tonne from 1,882 pounds.
SUGAR: Sugar futures also ran out of steam.
By Friday on NYBOT, the price of unrefined sugar for delivery in March decreased to 23.57 US cents a pound, from 25.22 cents for the October contract a week earlier.
On LIFFE, the price of a tonne of white sugar for March slid to 603.50 pounds from 629.50 pounds.
RUBBER: Malaysian rubber prices rose on the back of tight supplies among major rubber producing countries.
The Malaysian Rubber Board's benchmark SMR20 contract increased to 350.70 US cents a kilo from 337.85 cents a week earlier.
© 2010 AFP