COMMODITIES:OIL JUMPED more than 2 per cent yesterday, touching a near seven-month high as improving global factory activity bolstered expectations of an economic recovery.
Data showed US manufacturing shrank at a slower-than-expected rate in May, while industrial activity expanded in China. Surveys in Europe showed the manufacturing recession was easing.
US crude traded up $1.56 to $67.87 by 4pm (GMT), having earlier climbed as high as $68.29. London Brent crude gained $1.75 to $67.27 a barrel.
Gold slipped in Europe yesterday, erasing earlier gains, as the dollar pared losses against the euro and rose versus the yen in the wake of US economic data.
Prices earlier reached their highest since late February on the back of dollar weakness and amid fears government measures to boost liquidity in the financial markets will fuel inflation.
Spot gold was bid at $976.40 an ounce against $978.20 late on Friday, off a high of $988.50. US gold futures for June delivery on the Comex division of the New York Mercantile Exchange eased $2.10 to $976.70 an ounce.
Afshin Nabavi, head of precious metals at MKS Finance, said gold had re-established its link with the dollar. “(We) should see a small correction on the downside before testing $1,005 which is February’s previous high,” he said.
“Commodities generally are upbeat at the moment,” said Simon Weeks, director of precious metals at the Bank of Nova Scotia. “People are definitely buying hard assets as opposed to hard currencies.” Gold is an attractive investment for both bulls and bears on the economic outlook, he said.
“If things are getting better. . . it will go along as part of the commodities sector, (but) there is enough concern out there that some safe haven buying is also coming back in,” he said.
Data released Friday showed a hefty rise in speculative net long positions on New York’s Comex futures exchange. However, this may leave gold vulnerable to a correction as such positions are easily liquidated, analysts said.
Silver tracked gold up to a near 10-month high of $15.94 an ounce. Later the metal was bid at $15.68 against $15.74. Platinum was bid at $1,213.50 an ounce against $1,187, and palladium at $238 an ounce against $234.
“Platinum prices were buoyed by US dollar weakness,” HSBC said in a note. – (Reuters)
