Gold hits record $1,000 as oil surges to $111 - Emirates24|7

Gold hits record $1,000 as oil surges to $111

(REUTERS)   

 
  

Gold climbed above the $1,000 (Dh3,670) an ounce level on Thursday, crude oil shot past $110 (Dh403.70) a barrel and cocoa futures soared to 28-year highs COC/N] as the plummeting dollar fed a bull market in raw materials.

 

Earlier in London, tin set historic peaks at $20,050 (Dh73,583.50) a tonne as commodity bulls cheered on both sides of the Atlantic.

 

The Reuters-Jefferies CRB Index, which tracks prices for 19 commodity futures, reached its first record high in a week.

 

Analysts cited the weak dollar, which sank to 12-year lows against the yen and trolled a new bottom against the euro as traders bet on another cut in US interest rates. The Federal Reserve's $200 billion (Dh734 billion) infusion into distressed credit markets this week failed to lift the greenback for long.

 

Gold has gained almost 20 per cent this year due to the battered dollar.

 

"Tell me what the dollar is going to do and I'll tell you what gold will do," said Victor Flores, mining analyst at HSBC in New York.

 

"To the extent that the dollar continues to weaken, we would expect to see the gold price do well," Flores said.

 

The active gold contract for April delivery on the COMEX division of the New York Mercantile Exchange settled up $13.30 (Dh48.81), or 1.4 per cent, at $993.80 (Dh3,647.25) an ounce after reaching an unprecedented $1,001.50 (Dh3,675.50).

 

Spot gold was quoted at $994.30/995.10 (Dh3,649.08/ Dh365,202) in Thursday's late New York trading, up from Wednesday's $981.90/982.70 (Dh3,603.57/ Dh3,606.51).

 

Investors – as well as speculators – piled into gold as the dollar's weakness took oil beyond Wednesday's $110 record, traders said.

 

"I can't predict the end of it, but we're not finished here, it's going to drive gold to $1,100 (Dh4,037) in my view," said Bill O'Neill, a managing partner at LOGIC Advisors.

 

Commodities also got a boost from money coming in from underperforming stocks and bonds, analysts said.

 

"The environment of other asset classes has made commodities very attractive," said Michael Lewis, global head of commodities at Deutsche Bank.

 

"They look very much like a safe-haven, because if you look at other asset classes there is a lot of risk associated with equities, carry trades and so on."

 

US crude settled up 41 cents at $110.33 (Dh404.91) a barrel, after striking the new high of $111 (Dh407.37) earlier. London Brent crude rose $1.27 (Dh4.66) to $107.54 (Dh394.67) a barrel.

 

"The relation between the weak dollar and strong crude continues to dictate price direction at the moment, and people are not trading on economic fears," said Jim Ritterbusch, president of Ritterbusch & Associates. (Reuters)

 
 
 
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