Gold bags more records, oil higher on Libya

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Gold surpassed $1,900 an ounce for the first time this week as investors continued to snap up the safe-haven investment on growth concerns, while oil gained thanks to an unclear outlook for Libyan crude output.

After strong gains for commodities at the start of the week, profit-taking set in ahead of a keenly-awaited speech on the economy by US Federal Reserve chairman Ben Bernanke.

But prices headed higher once more as the central bank chief offered up no new economic stimulus measures for the struggling US economy, reigniting investor concerns about the recovery.

Instead, Bernanke said he expected US growth in the second half of the year to improve after a first half in which expansion was nearly stagnant.

His optimistic outlook however came as official data showed the US economy grew less than initially thought in the second quarter, with expansion of 1.0 percent from the first three months of the year.

The Commerce Department had initially estimate growth of 1.3 percent between April and June.

PRECIOUS METALS: Gold rocketed to $1,913.50 an ounce on Tuesday before sliding $200 over the following days. Investors banked profits ahead of Bernanke's speech and also as exchanges increased their fees on gold transactions, analysts said.

Barclays Capital forecast that gold prices, which have surged in recent months on economic uncertainty, would average $1,875 in the fourth quarter, and $2,000 an ounce in 2012.

"As long as global investor interest remains robust, prices are set to venture further to new highs," Barclays Capital analyst Suki Cooper told AFP.

Platinum meanwhile hit a three-year high of $1,916.75 an ounce before traders booked profits.

By late Friday on the London Bullion Market, gold fell to $1,788 an ounce from $1,848 the previous week.

Silver dropped to $41.06 an ounce from $41.98.

On the London Platinum and Palladium Market, platinum slipped to $1,812 an ounce from $1,855.

Palladium dipped to $747 an ounce from $750.

OIL: Crude prices rose over the week as investors tracked the endgame in oil-rich Libya and looked for clues regarding the outlook for the US economy.

Libyan oil output could take between six months and two years to return to normal, analysts said, as rebel forces looked set to bring Moamer Kadhafi's 42-year rule to an end.

Libya, a key African oil exporter, produced about 1.6 million barrels a day before the rebellion broke out in mid-February, but this has long since slowed to a trickle.

Oil traders were also bracing for the impact of Hurricane Irene on refineries along the east coast of the United States.

"The US east coast is home to about 3.0-5.0 percent of the country's total refinery capacity and is the delivery hub for US-traded gasoline futures, so the hurricane should underpin crude prices in the near term," said Nick Trevethan, a senior commodities strategist with ANZ Research.

By late Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in October rose to $111.10 a barrel from $108.51 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for October stood at $85.48 a barrel compared with $83.04 for the September contract a week earlier.

BASE METALS: Base or industrial metals mostly rebounded.

"Metal prices proved very robust in a volatile market climate and made gains across the board," said Commerzbank analysts in a note to clients.

"Copper was trading at a three-week high above the $9,000 a tonne mark. The price should remain well supported in the coming months, and not just because of production problems in Chile, the world's largest copper producer with 34 percent of the global market.

"Another strike is possible soon at the Grasberg mine in Indonesia, for example, which is the world's second largest copper mine," they added.

By late Friday on the London Metal Exchange (LME), copper for delivery in three months jumped to $9,006 a tonne from $8,837 the previous week.

Three-month aluminium climbed to $2,369 a tonne from $2,358.

Three-month lead gained to $2,428 a tonne from $2,310.25.

Three-month tin increased to $23,700 a tonne from $23,000.

Three-month zinc advanced to $2,227 a tonne from $2,190.75.

Three-month nickel fell to $21,230 a tonne from $21,339.

COCOA: Futures gained with Ivory Coast's harvest being impacted by unfavourable weather conditions.

"Cocoa prices have been on a rally for days," said Commerzbank analyst Carsten Fritsch.

"In October, the new main harvest begins in Ivory Coast, the largest cocoa grower. Sun and sufficient humidity would be the ideal weather, but it has been too cold and too dry for some weeks.

"The outlook for the next season is less favourable now and this is giving upward impetus to prices," he added.

By Friday on LIFFE, London's futures exchange, cocoa for delivery in December advanced to £1,930 a tonne from £1,892 the previous week.

In New York on the NYBOT-ICE, cocoa for December increased to $3,058 a tonne from $2,998.

SUGAR: Prices hit the highest levels for six months in New York at 31.85 US cents a pound.

"Prices and sentiment are likely to remain choppy, swinging between the implications of a weak Brazilian crop on the one hand and robust supply growth across other key producers on the other," said Barclays Capital analyst Sudakshina Unnikrishnan.

By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in October advanced to 29.70 US cents a pound from 28.91 cents the previous week.

On LIFFE, the price of a tonne of white sugar for October fell to £737 from £764 the previous week.

COFFEE: Coffee futures climbed as Colombia downgraded its harvest estimate.

"It is already known that the current Brazilian harvest will be lower due to the low-yield year in the 2-year cycle," said analyst Fritsch.

"Now, the Columbian Coffee Federation has revised its crop estimate for Colombia downwards from 9.5 million to only 9 million bags against the backdrop of too much rain.

"This means an inventory build of the low global stocks of Arabica coffee can virtually be ruled out," he added.

By Friday on NYBOT-ICE, Arabica for delivery in December grew to 279 US cents a pound from 267 US cents the previous week.

On LIFFE, Robusta for November increased to $2,395 a tonne after $2,321 a tonne.

GRAINS AND SOYA: Prices advanced on tight US supplies.

By Friday on the Chicago Board of Trade, maize for delivery in December jumped to $7.55 a bushel from $7.25 a week earlier.

Wheat for December grew to $7.92 from $7.61.

November-dated soyabean meal -- used in animal feed -- advanced to $14.06 a bushel from $13.68.

RUBBER: Rubber prices slid for a third week running amid low trading volumes.

The Malaysian Rubber Board's benchmark SMR20 fell 454.85 US cents a kilo from 458.60 US cents the previous week.

© 2011 AFP

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